College Decision Time Is Around The Corner - Are Your Clients Ready To Bite The Bullet? - Association of Certified College Funding Specialists

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College Decision Time Is Around The Corner - Are Your Clients Ready To Bite The Bullet?

prospects, clients, scholarships, appeal letters, tuition discounts,

College Decision Time Is Around The Corner - Are Your Clients Ready To Bite The Bullet?
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Thousands of students nationwide are in the process of making one of the biggest decisions of their life - which college to attend. This means your clients (parents) are down to the wire on making their final college decision - how much is their net cost.

The net cost of a degree is often a difficult number to determine, unless, of course, you wait until you receive the final tuition bill. Many families though are anxiously awaiting their soon-to-be-delivered financial award letters to determine their net cost.

Most colleges tell you to calculate your true net cost by subtracting out only grants and scholarships from the school’s total costs (including tuition, fees, room, board, books, travel, etc.). The problem is every college uses a different terminology on their award letters and it makes it difficult for families to compare awards apples to apples.

This, however, is where you, the advisor, can become invaluable. Your client may receive a specific grant (Pell) or a particular scholarship for achievement (merit), but if the student receives a tuition discount you may be able to help the student negotiate an even larger discount.

What is a Tuition Discount?

A tuition discount is anything offered by the college that reduces the amount a client is required to pay for tuition The money may actually show up on the award letter as a tuition discount, or an entrance award, or a specific college-based grant; but the effect is the same - the amount your client has to pay is less than the total cost on the award letter.

Where Does The College Get This Extra Money?

The college funds this amount through it’s own internal budgets, endowment funds, and income. Generally, a certain amount is set aside in the college admissions budget for these incentives. In many cases, these institutional funds can lower private college tuition costs in the same price range as public universities.

Why Colleges Offer Tuition Discounts & Incentives

Enrollment is key to a college’s survival. Many colleges select students for admission to their school only to have them enroll and attend another. Private colleges have a constant battle to fill seats every year. The second-tier private colleges are even more challenged because they must compete with the low cost of public universities and the popularity of the elite private (Ivy League) schools.

Here’s How It’s Done

When the college sets a sticker price for their tuition, higher income families naturally pay full tuition, while lower income families are subsidized with financial aid. This is how the system has worked for years and colleges use this method to attract a more socio-economic group of students. In reality, though not all higher income families pay full tuition and not all lower income families will be offered enough financial aid to get a deep discount on tuition.

Colleges actually put incoming freshmen into pools and set a range of tuition price based on those pools. In this example, each family is put into a pool based on the amount of income and assets they show on the FAFSA and/or PROFILE financial aid forms. Then the college uses a mathematical process called “financial aid leveraging” within each pool to attract and enroll the best students into their college while using the minimum amount of financial aid to do it.

In other words, they will take a $40,000 scholarship they normally give to a needy student in a lower tier pool and break it into four scholarships of $10,000 each for wealthier students in an upper tier pool. These wealthier students would probably go elsewhere without the $10,000 tuition discount.

“Financial aid leveraging”“ is a game colleges play and they play it very well. And if you know how to play the game, your client can avoid paying full price. Why should your clients pay a higher price to subsidize other students, right?

How You Can Get Your Clients Their Share Of Tuition Discounts

The student knows the college he or she would really like to attend. The Financial Aid Officer does not. What the FAO does know is that student applied to 6-8 schools because this information is on the FAFSA and Student Aid Report. So the FAO knows this will yield 6-8 different financial aid packages from the colleges that the student applied to.

Now the FAO must make a decision. He must bid for the student, or risk losing the student to a competing college. As a general rule of thumb, if the FAO can get the family to fork out 75% of the student's total cost, he will not recruit another candidate with a higher Expected Family Contribution. So if your client’s student does not receive at least 25% of his or her award letter in tuition discounts, there may be an opportunity to help the client negotiate the award.

The result: at least one of these private colleges should offer the student an excellent package. If not, your client can always fall back on a less expensive (public) school.

Appealing The Financial Aid Award

It is preferable for the family to contact the financial aid officer in person, if possible. If this is not possible, then writing an award letter appeal may be necessary. When writing this appeal letter though, the family should be specific. The letter should always be addressed directly to the financial aid officer that signed the award letter. In other words, “Mr. John Ramos, Financial Aid Officer, Clearview College”, not “Dear Mr. Financial Aid Officer”.

The letter should clearly state the reasons for the appeal, request a specific amount of money, and include any specific documents regarding the appeal. The award letter appeal also has a better chance of success if the student has a talent (academic, athletic, musical, etc.) that the college can use to fill its enrollment needs. This special talent should also be mentioned in the appeal letter to the financial aid officer.

Once the letter and all supporting documentation is received, a review is completed and a decision is made by the financial aid officer about possible adjustments. The review of your appeal may take several weeks. If the appeal is approved, the financial aid officer will send you a revised financial aid award letter indicating the changes that have been made. If the appeal is denied, a letter from the financial aid officer will be sent to you with an explanation as to why the appeal was denied.

Tips to Appeal an Award Letter

  • Determine how much the college was short of meeting 100% of the financial need
  • Determine the “true cost” at each college and decide which award letter is best
  • Determine if there are “special circumstances”
  • Use the admissions office, coach, or other college officials to assist in the appeal.
  • Appeal in person, if possible
  • If an appeal in person is impossible, make the appeal by letter
  • Always send adequate documentation of the special circumstances
  • Never use the words “negotiate” or “match” in the appeal letter

REMEMBER: Many colleges offer multiple Student Expense Budgets (room & board, etc.), and what looks like a better aid package from one school may actually be less favorable than another school under further scrutiny. When comparing colleges, make sure you review the details of each school’s Financial Aid Budget.


Ron Them

Ron developed and trademarked the CCPS® (Certified College Planning Specialist) designation. For over 20 years, the nation's leading financial advisors, broker/dealers, and major media outlets have been using his research, funding strategies, training, and insight. Ron is highly regarded as an expert in the college funding field.

He is a former Chief Financial Officer of a Fortune 500 company and currently owns his own financial advisory company specializing in cash flow planning for business owners and executives. He developed the Cash Flow Recovery™ process that uses cash flow management principals to increase asset value and build wealth for business owners.

He is also the originator of several software calculators to help advisors and families make college affordable, including:

  • College QuikPlan EFC Calculator
  • "Find the Money" College Cash Flow Calculator
  • College Debt Reduction Calculator

Ron has been quoted in U.S. News and World Report, Kiplinger's Personal Finance, Smart Money, Financial Advisor Magazine, Small Firm Profit Report, Practical Accountant, LIMRA's Market Facts, Senior Advisors Magazine, HR Magazine,, Employee Benefit News Magazine,, Entrepreneur Magazine, Insurance Selling Magazine,, The Christian Voice, and Columbus CEO Magazine.


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