The long wait for the admission letters are, for the most part, over. Now it’s just a matter of your student making up their mind and you mailing the deposit. Right? Well, actually, no. There are a few important details to be figured out.

Colleges expect a final decision by May 1st, so your son or daughter has a month to decide. The whole application process is so stressful that it’s normal to want to get it over with. Now is the time where you, the parent, need to be the voice of reason. Encourage your student to wait until all of the offers have arrived. You should also keep your options open in case circumstances change, e.g., you decide to appeal the financial aid package or your student decides to change their program of study. Let them mull over their choices and begin making plans for final campus visits.

For the most part, colleges make their best offers up front. This saves the time and expense of having to review student records and meet with parents. Because of the economy, this year is probably going to be different from previous years and it’s hard to gauge what colleges will award. The offers we’ve seen so far (I am writing this on March 17th) suggest this year’s awards won’t keep up with annual tuition increases.

So the 64 thousand dollar question is: Was your student’s award fair? If the award is truly terrible, there may be little that can be done. Even if you could coax a few more dollars, would it be enough? This is a question you must answer before even thinking about approaching the financial aid office.

To better prepare yourself; here is a little primer on how to properly evaluate the financial aid offers. You probably know some or most of this, but it never hurts to review:

Award letters will have some similarities, but there isn’t a standardized format— at least not yet.
Sometimes you will see a PLUS loan or some sort of Alternative Loan included in the award. This is not financial aid.

On the letter you should see a Cost of Attendance figure. Cost of attendance is broken into two categories: Direct Expenses such as tuition, fees, and room and board which are billed directly to the student. Indirect Expenses, which typically includes books, personal and travel expenses, are an estimate of costs that you will also have to pay.

Legally, colleges are supposed to put both categories of numbers together. Sadly, in order to make the Cost of Attendance lower, some schools will only include Direct Expenses in the Cost of Attendance. If this happens, it will make the aid offer appear to be more generous because it doesn’t reflect the real costs to attend that school. This alone is reason enough to make an appeal for additional financial aid. When Indirect Expenses aren’t listed, $3,500 is a realistic figure to cover books, personal and travel expenses.

There are several aid award comparison calculators on the web that can show you what each college will cost. What they can’t tell you is if the award packages are fair or not, or if you have reason for an appeal. Here are the key factors that influence your student’s award:

In spite of federal and institutional EFC methodologies, offers can and do vary widely. Just as your student is unique, colleges evaluate each applicant according to their own policies and guidelines. Knowing what factors influence an aid award package will help you determine if your student was awarded fairly compared with similar colleges and universities. For example, some colleges will include the equity in your home, while others won’t.

If your student has their heart set on a particular school and a comparable school offers a better aid package, you can sometimes use this to get them to improve their offer. This is especially true if that school really wants your student. Mind you, it doesn’t always work but if you don’t ask, you won’t get.

An easy way to get an idea if your student received a favorable financial aid award is to divide the college’s offer of scholarship and grants into their tuition and fees. The higher the percentage, the more the college wants your student to attend. For a private college or university, if the discount rate is more than 35%, they are interested in your child attending. Because public universities cost less, offers of 15% or better are considered fair.

Many scholarships require a minimum grade point average that must be maintained to keep the scholarship. The college letter of admission will have the details. Because the first year of college is one of major adjustments, students who are used to getting all A’s may, for the first time in their lives, see a few B’s— or gasp— even C’s. Colleges know this full well, so you will want to see if they allow for a lower GPA during the first year. If they don’t, you must consider your student’s academic ability to keep their GPA higher than the minimum, especially if you have financial need.

If they aren’t able to keep their GPA above the minimum, will the college provide for a grant to make up the difference? Also, can the scholarship be reinstated if the GPA goes back up? This is very important to know, especially if losing the scholarship would be a deal breaker.

What I’m about to discuss now is called “leveraging”. To put it crassly, this is pitting one school against another.

Now, if the aid award between two similarly ranked schools that have comparable costs and where your student is also similarly ranked is disparate, then by all means, call financial aid and ask them how they arrived at their decision. You’re asking because you want to understand the differences between the two awards. You should tell them that if cost wasn’t a consideration, then your student would be happy to attend their university. Perhaps the voice on the other end of the line will ask you to fax the other schools award and will review your financial aid forms again to see if they missed something. Typically you should receive a call, letter or email in about three days with their decision.

A true appeal is based on financial circumstances that have changed since you filed the financial aid forms or that the FAFSA didn’t allow you to disclose. Since that time you may have lost your job, a family member became ill, a sibling also decided to go to college-- anything that can upset your financial apple cart.

To appeal, first learn about that colleges appeal process, usually detailed on the university’s financial aid page of their web site. If you can’t find it, call the financial aid department first thing in the morning before they get busy.

Once you know how to proceed, be ready to make your case and be able to submit documentation if asked (see the March 2010 College Ed Xpress).

They Gotta Go Back

Regardless of aid and given the costs, your student must go for an overnight visit. You wouldn’t buy a home based solely on some pictures and prices found on the web. Choosing a college is probably the single largest expenditure you’ll make next to buying a home. Now is the time to learn whether or not your student clicks with a school. They need to get a good feel by talking to students, sitting in on a class, and eating in a dining hall. If nothing else, their initial perceptions of the school will be validated.

Other information you will want to know before you and your student commit is to learn about what steps the college has taken to help ensure its continued existence. A few months ago, Yale announced a $150 million budget cut. Even for the second wealthiest university in the world, that’s a lot of money. You could ask admissions questions like:

What is the college/university doing to meet the current economic challenges?
What is the commitment to financial aid for continuing students?
How responsive will the college be to parents who find their economic status changing?
Will more students be admitted and if yes, how much will class sizes be increased?
How many professors and support staff have been laid off or terminated, and what are the plans to cut more in the future?
What programs have been eliminated or are on the table to be cut?
What sports teams are going to be relegated to club status?
What capital improvement projects are not going to be completed (new buildings, dorms, sports facilities)?

Seniors:

You cannot put acceptance deposits down for two or more colleges at the same time. If you do and are found out, you will lose your place at that college.
Notify all of the other colleges that accepted you of your decision. If you should need to transfer, you’ll want admissions to think favorably of you.
Some colleges are wait-listing more and more students because they know that these students are more likely to pay full price. If you are wait-listed, find out if you will be penalized when it comes to financial aid. Chances are that you will.
If you’re not admitted to any of the colleges that you applied to, see your guidance counselor immediately. There are other colleges that accept late applications
If you haven’t yet taken the AP Exams, ask admissions at the colleges you are admitted to if they will accept your scores. Some colleges and universities aren’t accepting those AP classes even if you got a 5!
Don’t slack off! Senioritis is not acceptable. A poor showing in your final grades could cost you your seat at your dream school.

Juniors:

No doubt you’re aware that college is expensive. Do yourself and your parents a huge favor: Do a college search and don’t use miles from home as a criteria. Investigate colleges that look interesting to you no matter where they are located; even some you may not be familiar with. There are literally hundreds of colleges and universities that would be a good academic, social and financial fit for you and your family. Take your time and exploring all of your options. And to maximize your possibilities here is an old saw with which you are familiar:

The way to Carnegie Hall is practice, practice, practice. Same thing with doing well on the SAT or ACT. Higher scores mean scholarships, and because of the economy they will be harder to come by in the years to come.
If applicable, you should prepare writing samples, portfolios, audition tapes, and other material for the fall application season. Watch for earlier application deadlines, too.
By the end of the summer, you should know which colleges you are going to apply to, have your applications completed, have written your essays and personal statements and contacted people to request letters of recommendation. Portfolios can be completed in fall.

Why do this instead of waiting like everyone else? So you have more time to visit colleges, prepare for interviews, concentrate on your studies and enjoy your senior year, of course!

Graduating College Seniors

Do you know how much you’ve borrowed over the past four or five years? It’s easy enough to find out. Go to http://www.nslds.ed.gov to retrieve your student loan information. Then start thinking about how you’re going to pay them off.

You do have a variety of options. The Income Based Repayment program (IBR) allows you to pay off your student loans with no more than 15% of your discretionary income, and will forgive your loans after 25 years. No hurry because you have six months after you graduate before you begin paying those loans off.

In the 1986 surprise hit comedy, Back to School, Rodney Dangerfield plays the father of a son who is miserable at college. To show his progeny he can do anything he sets his mind to, he enrolls himself at his son’s university. The ending has Rodney addressing the graduating class with these words, “…members of the graduating class. I have only one thing to say to you today...it's a jungle out there. You gotta look out for number one. But don't step in number two. And so, to all you graduates...as you go out into the world my advice to you is...don't go! It's rough out there. Move back with your parents.
Let them worry about it”.

There’s a moral in there somewhere!

Until next month,

Financial Aid Question of the Month

Question: My student will be receiving a scholarship from his high school. How will this scholarship be treated in his financial aid award?

Answer: Federal student aid regulations specify that all forms of aid must be included within the definition of need, and need-based aid recipients cannot receive more than the cost of education. This means that additional aid such as outside scholarships must be combined with any need-based aid you will receive; it may not be kept separate and used to reduce your family's contribution.

If the college has not filled 100% of your need, it will usually earmark outside scholarships to close the gap. Once your total need has been met, however, the college must reduce other aid and replace it with the outside award.

Most colleges will allow you to use some, if not all, of an outside scholarship to replace self-help aid (loans and Federal Work-Study) rather than grant aid.