Tips For Working With Students Who Want To "Negotiate" Their Financial Aid

Can we negotiate that? What more can you do for me? Can we reach a better agreement here? I really want to attend your school, but I just don't have enough money, what can I do to get more financial aid?

Anyone who has worked in financial aid knows the buzzwords indicating that a student or parent recently read some news story about boosting a financial aid award package through shrewd negotiations. And sometimes that can be a big put-off.

Most families understand that financial aid administrators examine and tweak awarding procedures to try and reach an optimal level of equity. When it feels like students and parents are just trying to game the system - taking dollars away from truly needy students - it can be incredibly frustrating.

Still, there are good reasons students and parents look for increases in their award packages. Understanding why families try to negotiate higher or better financial aid packages and what we can do to help them get the most amount of aid possible is crucial and ultimately, part of our mission as financial aid administrators.

Be Empathetic

College is expensive! College costs continue to increase faster than the rate of inflation. Meanwhile federal and state financial aid has remained stagnant. Most families have under-saved for college, but know that a postsecondary degree is the gateway to a stable and rewarding career. Can you blame them for trying to get as much money as they can to help foot the bill?

News stories reinforce the idea that financial aid is negotiable. They often provide "tricks" and "tips" families should use to get you to increase their financial aid award packages.

"What should you do if you've been offered a financial aid package that simply isn't big enough?" asks a recent MSNBC article. "Negotiate. Colleges can sometimes be convinced to sweeten the deal."

No wonder so many families have the false notion that paying for college is like buying a used car. Having empathy for their situation and understanding why they're looking for these funds will allow you to emotionally detach from the situation and realistically assess whether circumstances exist that allow you to exercise professional judgment (PJ) or increase institutional aid.

Setup Clear Negotiating Rules

Having a clear and direct policy that families can use to appeal their financial aid awards is crucial to your sanity and the well-being of your students. Some aid offices may be wary of publicly sharing information on financial aid appeals with the idea that by advertising it, more students will ask for it. But this generation is more connected than any before.

Text messaging, Facebook, MySpace, Google searches, and all other forms of social networking disseminate information quickly. Once one student receives a PJ, it is likely that several more will come asking. A better solution is to clearly articulate in your financial aid materials or on your Web site the exact criteria used in appealing financial aid awards.

Consider including the following information:

Your financial aid packaging policies, including any use of equity and the limited availability of financial aid dollars
The circumstances under which your office would consider a non-PJ appeal, such as aid offers from another school or reasons for missing an application deadline
The definition of PJ and under what circumstances financial aid administrators may exercise it
Reasons or circumstances that generally do not qualify for PJ
Maximum award amounts for grant, campus-based, and federal loans so that students know whether they are already receiving maximum amounts that cannot be increased through PJ or other appeals
The exact method students and families should use to appeal their financial aid package, which should include a form and clear guidance on what supporting documentation would be required.

Be Proactive

If there are widespread issues that may allow multiple students to qualify for PJ, such as a natural disaster,, it may be a good idea to identify those students up front. It saves you time down the road and it helps get the most amount of financial aid to students who need it.

Federal regulations allow schools to establish procedures to proactively identify circumstances that can trigger a review by an aid administrator for PJ. But remember that those students' circumstances still need to be reviewed and documented on a case-by-case basis. Across the board changes to all or even a limited group of students is not permissible.

Natural disasters, local industry lay-offs, or other wide-spread occurrences that would allow you to exercise PJ could be used as flags for additional follow up. You could then provide those students with information on how to request a PJ or other institutional aid adjustments.

Be in Compliance The Higher Education Act (HEA) requires you to exercise PJ on a case-by-case basis and with adequate documentation when there are "special circumstances." The HEA grants financial aid administrators the ability to adjust a student's cost of attendance and data values used in calculating the expected family contribution or EFC. The HEA explicitly stipulates that special circumstances may include the following:

Tuition expenses at an elementary or secondary school, medical or dental expenses not covered by insurance
Unusually high child care costs
Recent unemployment of a family member or an independent student
A family member is a dislocated worker
A change in housing status that results in homelessness
The number of parents enrolled at least half-time in a degree, certificate, or other program leading to a recognized educational credential at an institution with a program participation agreement under section 487
Changes in a family's income, a family's assets, or a student's status
Adjustments excluding from family income any proceeds of a sale of a farm or business assets resulting from a foreclosure, forfeiture, or bankruptcy or an involuntary liquidation

As financial aid administrators we want to give needy students as much financial aid as possible. Empathy, clear negotiating rules, being proactive and in compliance may go a long way in helping accomplish that goal without the frustration that can result from financial aid "negotiations."

By Justin Draeger
NASFAA Assistant Director for Communications

Posted 04/22/08 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web Site questions or comments to Web@NASFAA.org.