So is there a way to appeal to colleges for more money?
During a recent online discussion, Mark Kantrowitz, a leading expert on the college-finance process, joined me to answer this question. He talked about his new book, “How to Appeal for More College Financial Aid,” which was the Color of Money Book Club pick for last month. Here are his responses to questions he didn’t have time to answer during the chat.
Q: My wife just lost one of her clients in her event-planning business. We are going to complete a form from the college for the appeal, but are there any strategies or advice that you can give to help us be reconsidered fairly? Our EFC is considered high by the college financial-aid office, and we did not get need-based aid, which we understand, but we also did not receive merit aid, which is surprising based on our child’s academic record and rigor of courses.
Kantrowitz: The college will base its consideration of the appeal for more need-based financial aid on the difference in income from the “prior-prior” year to the current year. Some colleges will use an average of several years of income if the parents’ income is volatile, such as often occurs with self-employed individuals. Others will pick a 12-month period that most accurately reflects the family’s ability to pay.
And, parents often overestimate eligibility for merit-based aid. Having many IB or AP classes, even with top scores, does not distinguish most students. There were 80,000 valedictorians and salutatorians last year.
Q: I consider our family middle class, so we won’t receive need-based help. Our expected family contribution, or EFC, is basically “pay full sticker price.” While we saved a little in our 529 college-savings plan for our children, it’s not going to come close to covering the actual cost. How can we best position our child to appeal for financial aid?
Kantrowitz: Surprisingly, there’s no official definition of middle income or middle class. Some define low income as having an adjusted gross income, or AGI, under $35,000, and middle income as having an AGI of $35,000 to $100,000. Some colleges use cutoffs in the six figures for middle income. Many researchers use $50,000 to $99,999 as middle income.
It's not a matter of positioning your child for an appeal. It's really about making the case that there are special circumstances that affect your ability to pay. Often the financial situation has very little to do with the child. You want to point out anything that differentiates you from the typical family. This could be anything from unreimbursed medical or dental expenses to maybe you're taking care of an elderly parent. It could be you have a special-needs child or that you are going through a separation or divorce.
The key thing is to focus on factors beyond your control.
Q: My wife and I have a combined gross income that on paper looks like we won’t qualify for need-based aid. But we live in the District of Columbia, where housing and the cost of living are extremely high. So how do you best explain that, while our salaries look great, practically we can’t foot the $60,000-a-year full price of the college tuition?
Kantrowitz: College financial-aid administrators are aware of the impact of the high cost of living in certain geographic areas. Stanford University, for example, recently stopped considering the net worth of the family’s principal place of residence because of recognition that the appreciation of home values has significantly outstripped increases in family income.
You could try appealing for more financial aid, but most colleges will not make an adjustment. The choice of residence is often seen as a discretionary one.
Q: Should I not appeal the already appealed decision?
Kantrowitz: If you have new information or there has been a subsequent change in your family’s situation since you filed the first appeal, you can appeal again. If you made an error in your original appeal, you can bring this to the financial-aid administrator’s attention. But if there has been no change, nothing will be gained by appealing again, other than annoying the financial aid administrator.