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  • Jason Flurry, CFP

Are college prices negotiable?

How to get the best deals for college just by asking for them.


Next to purchasing your home, paying for college is often one of the largest financial transactions people make in their lifetimes. If you have a lot of children going to college, as I do, the total cost of sending all of them to college WILL BE the largest financial transaction I ever make! Yet, when you buy home, most people understand that the price quoted is the sellers “asking price,” not a firm final price. It’s this way with other large ticket items like cars, major appliances, and a variety of home services, like painting and repairs or replacing your roof.


Why is it then that people think you can’t negotiate the price of college? What places a university above all other businesses and financial transactions and makes negotiations off-limits with them? The answer is – nothing. Many college prices are negotiable just like anything else, but if you don’t know that, you’ll likely take whatever they offer and potentially leave a lot of money on the table because you didn’t know any better.


That’s why I’m sharing this information with you today. I only want you to pay your fair share of the college bill and nothing else. It’s been well-documented that money tends to gravitate toward those who are well-informed and away from those who are less informed, especially when it comes to complicated matters like planning for college and planning for retirement. You owe it to yourself to become an educated consumer and knowing what your true final price is at every college on your students list is a major step toward you truly being well-informed.


Who has the upper hand? When you’re student first started researching colleges, he or she used some sort of selection process to determine eight or 10 favorites. Some or maybe all of those colleges received applications expressing your student’s interest in being excepted at their school. That’s the first decision – for your student to ask, “Do you like me?” The next decision comes from the colleges themselves. As they respond to those applications, they make a decision back that says whether or not they’ll accept your student. That’s the second decision.

Now, let me ask you this. Who gets to make the final decision on where your student will go to college? You or the college?


You and your student do, right?


So, if you hold the power of making the final decision, to some degree that gives you the upper hand in the relationship with the colleges doesn’t it?


Yes…yes it does.


The admissions offices and financial aid offices at these universities don’t really highlight this fact because it serves their best interest to make you feel like you have to follow their system in order to be successful. Sure, their systems and timelines can be helpful, but at the end of the day, it’s up to the colleges to convince you that they’re the logical choice for your student once you’ve convinced them that your student can be a valuable member of their community.


Colleges need sales too When you really peel back the layers of how college works like a business, you find that the admission officers in the financial aid officers have a certain responsibility to make sales for the university. They do a good job of positioning the college to be attractive and highlight the many opportunities they offer and generous programs that help make them a good value financially. As they’re reviewing admission applications and financial applications, part of their job is to try to find matches in their prospect list they think will be good for their business and who will likely to move forward if they extend that student and their family and offer.


You probably never thought of college like this before, but go there with me for a minute.

If you work for the college and you’re trying to get the best possible students for that year’s class, you will make them a competitive offer that expresses your strong interest in them, right? The admission office has nothing to do with the financial aid office at most colleges, so whenever possible, the folks in the admission office are going to use anything they have to recruit someone who fits their ideal profile. If that person also has a financial need, financial aid can put some icing on the cake and bring the cost of college way down. That builds momentum for the admission office and highly increases the likelihood that they will close the sale with that family.


Naturally, colleges would like everyone to pay full price or out-of-state tuition versus the lower in-state rates, but they know that’s not really possible. Colleges are competitive though and priced in such a way that they can offer is much as half of their students huge discounts in any given year and still make ends meet. That means that if you’re in the half that doesn’t receiving you discounts, you’re likely paying for a couple of other students to attend that college in addition to your own. I’m sure that’s not a part of your college plan, so you need to find out up front how your student is going to profile with the admission office and do your homework to see if you can qualify for any need-based aid upfront or not.


Beating the college at its own game The key to getting a successful negotiation done with the college is on your list starts with the way you prepare in the beginning. If the college is a public university and they list specific, named scholarships or tiers of academic merit scholarships based on test scores and GPA's, the likelihood of getting them to offer you more through negotiating on merit alone may be slimmer than at other colleges. If you have a financial hardship or if something changes in your financial picture along the way though, the financial aid office can still override the information you’ve submitted to them and open doors to additional funding based on your current level of financial need.


Private universities tend to be far more flexible in the way they handle your final offer. They can do that in part because their top-line number starts so high. There’s a lot of wiggle room there when the price tag is $50,000, $60,000, $70,000, or even higher. But understand that just because a college has a high sticker price in a billion dollar plus endowment fund, it doesn’t mean that they’re going to be willing to do business with you through a negotiation. You have to do that homework up front and know what an average award is for a student who’s similar to yours. That way when you get an offer from the college, you have a reference point to see if that offer is attractive or if there’s potentially more money to be gained by asking for an increase.


The appeal of appealing Maybe you’ve noticed that when you’re doing a tour with a college it’s common to hear them saying at some point in one of their sessions that they don’t negotiate financial aid or work packages - but they do it all the time! They just don’t call it a negotiation. They have a different word for it. They call it an appeal. And that’s fine. I don’t mind appealing if they don’t my negotiating.


Depending on your situation and on the college, there are a couple of ways to appeal successfully. The most straightforward way is an appeal for more money in the financial aid award itself. To do this, you’ll need to have some explanations and documentation ready that demonstrate why paying for college at the current level they’ve assigned to you will be difficult for your family. You may have medical expenses, significant amounts of debt, or other financial obligations, like paying child support or paying back taxes to the IRS, that severely limit your ability to pay for college. Those items may not have been disclosed when you filed for financial aid originally, so the financial aid office needs to know about that. It won’t necessarily guarantee they will offer you more money, but at least you’re providing them an explanation and supporting evidence to show why your case is worthy of additional consideration.


Another financial event that’s common is a change of income, a change of employment, or loss of employment by one or both parents. In the financial aid system, you’re always using tax returns from two years prior and a lot can happen in two years, as you know. If you’re self-employed and your income has dropped significantly from the year you’re reporting on your tax return, you can share that information with the college’s financial aid office and ask for additional consideration that way. If you are laid off and currently don’t have a job, the financial aid office needs to know that the income they’re seeing on your tax return is no longer there. Even if you changed jobs and you’re making less now than you did two years ago, the financial aid office may be able to give you an adjustment to accommodate for that. In all of the situations, it’s definitely worth a try.


One other situation I see happen a lot during this two-year gap from the tax returns used in the financial aid system in the present is when parents divorce. If you were filing a “married joint” tax return two years ago and now you’ve divorced, you still have to use that old tax return in the financial aid system to get the ball rolling. Once that information has been submitted, you need to contact the financial aid office and let them know more about your current financial situation. There could be a significant difference in income and in your resources to pay for college compared to what things were like before. The colleges will request documentation, but it should be something that you already have.


Fortunately, the appeal process based on a change in your circumstances here will be much easier than dealing with the legal process you encountered while getting divorced, but sometimes the outcomes of an appeal like this can be just as unpredictable. If the college is unwilling to work with you initially, don’t give up. Keep going back to them and restating how difficult it is to pay for college on your own. You have nothing to lose by trying and any financial breaks you can get will certainly help you as you begin to rebuild your life again following your divorce.


Keeping your finances private when merit scholarships are involved Now let’s shift gears to something that’s much happier to talk about – merit scholarship appeals. If you have a strong student who’s been awarded merit money, there’s usually an open door to go back to the admission office and ask for more. Even if you haven’t filed any financial aid forms, you can still approach the admission office with an appeal. They may tell you that they can talk to you unless you do file financial aid, but in my experience, I found that not to be true.


The best answer to that objection is that by doing your research you found that you’re only going to qualify for loans to the financial aid system and “thanks to some attractive offers you have from other colleges on your list, you won’t need loans to make them affordable.” The problem is that particular school where you’re appealing is your number one choice, yet based on where things stand financially right now, it appears these other schools love you more than they do – and you have a gap you’re trying to fill.


Whenever possible I phrase an appeal like this in the voice of the student. Thanks to email you can write a heartfelt appeal using the student’s email address and show the college that your student is ambitious, conscientious, and motivated to find a solution that would allow them to attend their first choice college. They simply have a dilemma based on the other offers they’ve received and they’re trying to make a smart decision about their future both they and their parents (you) can feel good about.


If you’ve done a good job in positioning your student as a rock star with that particular college through the admission process and you can show them that with some additional consideration on their part you’re ready to move forward, I found that about 80% of the time you can get additional money simply by asking for it. Some increases are modest with the college only offering another $1000 - $2000. We’ve had other appeals granted using the same approach that have totaled as high as $15,000 – and the college has guaranteed the additional money for all four years making it a $60,000 win over and above the other awards they had already offered. All we simply had to do was ask for the increase and that’s what I’m hoping you’ll do, as well.


Paying only your fair share I wish I could say that every appeal attempt is successful, but unfortunately they aren’t. I always feel that the award letter that comes from the college is the beginning of the conversation though, not the end. You have nothing to lose by going back and asking for more money and with the strategies I’ve given you here, you’re likely to be more successful in your appeal then you would be otherwise.


Don’t be shy about asking for more money when it comes to finalizing your college financial awards. After all, who has deeper pockets, you are the colleges? Most financial aid or merit scholarship appeals that are granted are insignificant in dollar terms to the colleges, but they can be very meaningful to you as a parent trying to make college more affordable for your children. And remember, especially in those merit appeal situations, that admissions officer has selected your student as an attractive prospect for that college. They have a vested interest in seeing you close the deal with them, so make your best appeal to them and let them know that if they can come through for you, you’re ready to go.


Once you’ve exhausted all of your appeal efforts, you come to a very important place in your college planning journey. At this point you now have enough information to know what your final price is at each college where your students been accepted. In other words, that’s what that college feels is truly your fair share of the college bill.


Now you can make a more informed business decision on where the best value is compared to where the best opportunities are for your students. That’s how you know if you’re making the right decision, so use these tools and strategies when it comes your time to evaluate your student’s awards. You don’t have to be a College Planning Specialist like I am to get good results, but you do have to have the courage to try.


Give it your best shot and let me know how things turn out.

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