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Strategy

Strategies for a better deal

“Real-World Negotiating Strategies To Help You Negotiate A Better College Deal For you Child”

Dear Parent,

Here’s hoping that the adjustment into the school year and the Fall season have been smooth and happy for both your high school student and your family.  It is truly a significant transition virtually each and every year during high school, and there is no question that this transition grows exponentially bigger and more challenging when students make the jump from their high school years to their college or university years!

 We often find that when it comes to college application and college funding issues, many parents and families feel extremely uncomfortable and out of their depth in dealing with the colleges and universities to which their high school student applies.  This is natural, certainly, but it does not have to be that way.  In fact, it is because of this tendency that it is even more important for parents to gain a measure of confidence and comfort in dealing with institutions of higher learning.

The more parents know about the processes related to college admissions and financial aid issues, the better prepared they will be to manage the experience to the benefit of their student and their financial bottom line.  That is, frankly speaking, one of the reasons that we do what we do. As professional college funding advisors, we are uniquely qualified to help parents learn what they need to make wise decisions and maximize the educational options for their high school student, and to make positive financial decisions as well.

A good college funding advisor can help parents with their communication and interactions with the colleges and universities, and we also know the important clues and strategies for negotiating with institutions to maximize the options and the benefits for your child. 

With that in mind, we are pleased to provide a quick overview of some of the most helpful elements to negotiating and communicating with decision makers at the schools to which your child will eventually apply.  For more information, of course, or for any clarifications on the topics we introduce below, please do not hesitate to give us a quick call or schedule an appointment.  We are always pleased to be of assistance in this important time in the lives of rising college students and their families.

As you are no doubt aware, a tough economy not only affects families, but it can affect colleges and their endowments, as well. While tuition costs seem to skyrocket, one of the reasons for the swollen prices may include a shrinking endowment leaving less money available for incoming college freshman classes.

With that said, it does not mean that your family is doomed to automatically pay the “sticker price” for tuition when looking at different colleges and universities. The quoted prices – especially for private or out-of-state schools – can be a shock… but what many parents don’t know is that there are several things that can be done to minimize that shock and engage in negotiations and strategic communications that will almost invariably result in a lower overall price of attendance for your student.

Pitting Schools Against Each Other

Many parents may not think about playing schools against one another, but it can be very effective. It can be difficult to take that mindset when there are schools that your student especially wants to attend.  However, an offer from a second or third choice school (or even lower!) can be taken directly to a first choice school in order to garner more aid.

This tactic is also especially useful for merit-based scholarships. If your child is applying to colleges and universities that are well-funded and your child has strong academic achievements then there is no reason not to try to earn more for their hard-earned accomplishments! There are some parents who have managed to obtain over $200,000 in merit-based aid for their children. It can definitely be done, and your college funding advisor can provide more details on how to make this a reality for your child.

It is good to remember that while the sticker price for private colleges can cause some initial dismay, they will often have a lot more free money to hand out since they are receiving money from alumni, endowments, and private sources unrelated to government coffers. Remember that some colleges and universities have been known to cut the tuition by as much as 45% under the right situation.

Reveal Changed Circumstances

Your child does not necessarily need to be a budding Rhodes Scholar in order to receive additional aid from a college. There are other ways to receive additional aid – and it can happen when situations change within a family for a variety of reasons. Life happens, and many college administrators understand this. When circumstances have changed within a family situation such as a job loss, divorce, or illness, make sure to document this and send it to the college for additional consideration. More often than not, administrators will increase aid offers in light of changed circumstances.

College administrators often have a lot of flexibility when it comes to how they distribute loans and grants. If your child is a star pianist or was the school newspaper editor, you can use those experiences as leverage to try and obtain additional grants or aid.

Simply Ask

When your child receives his/her award letter it is an exciting time, but if you find that the offer is not exactly what you were hoping for, it is time to organize your information and write a polite letter back to the Financial Aid office asking them to reconsider the aid package and see if they will increase the aid.

You should first understand how each school works. Not every school will have an official form letter to request, but some schools have an appeals process already in place. Go through the proper channels and state your position and why you would like additional aid. It will not bode well for you if there is any embellishment. It’s best to simply state your family situation and why additional aid would be necessary.

Again, your college funding advisor is well-versed in how to manage these requests and can help you to know the right tack to take with each different school.

Be Clear

It might seem like common sense, but it vital to remember that college administrators are not omniscient.  They may be unaware of circumstances for each student, so it is important to simply lay out the facts to financial aid workers. Going on and on about how excited you are that your child was accepted to the school, and so forth, is something they hear often and does not necessarily help your case. Simply state what your current circumstances are and why you feel you are in need of, and/or deserving of, an aid package reconsideration.

Request Information About Work-Study, Grants and Scholarships

In addition to asking for a reduced tuition amount, you could also request information about scholarships, grants and work-study opportunities. When requesting consideration for scholarships, this might be the appropriate opportunity to toot your child’s horn. Include the reasons why your child would be an asset to the school, why he or she will make an excellent alum for the school, and why he or she deserves consideration for specific scholarships. Schools will certainly go the extra mile to attract the right candidates to their institution. Presenting your child as one of those candidates will often help you get you what you’re asking for.

Try To Play It Cool!

Just like any negotiation, there is a bit of a dance involved in the process of dealing with schools. It is important to be strategic in communication with the schools. For example, if your child receives an offer from a second choice school, parents should usually not immediately run to the first choice school to talk up the offer – this can seem anxious and could work against your student in the long run.

Parents might choose to wait a little while before contacting the first choice school for a better aid offer. If they have an idea that they are the first choice school they will sometimes be less likely to increase an aid package. Talk with your college funding advisor about how to play it cool and see what happens!

Overall, it is important for your student to end up at one of the best options available for his or her future academic experience.  The process is a challenging one, in some regards, especially for families that enter the negotiation process without key information to make them successful (or even worse, refuse to even begin any negotiations, and just accept whatever is offered).  

Regardless, parents will invariably find that professional advice from a college funding advisor can be of enormous help when it comes to negotiating a college future successfully and in a timely manner.  As professionals in this area, we are delighted to be able to offer our expertise, since it is truly worthwhile for the families we serve. The fact that our clients see more success in their negotiations, as well as finding the process significantly smoother to manage, makes us even happier.

One of the most exciting ways that we offer this information is through our College Funding Workshops.  These presentations are live workshops for the parents of college-bound high school students, and are offered by insightful college funding professionals.  They provide the most current and up-to-date details with regard to the higher education challenges facing tomorrow’s college students. We would be happy to see you at an upcoming workshop in your neighborhood.

If you have questions or want some additional information or details about these workshops, or if would like to reserve a seat for an upcoming date, just call our office.  We do require reservations in advance, due to space and practical limitations, but there is never any admission fee for our workshops.  Our workshop crew will be pleased to assist you further if you call our toll-free number at 614-934-1515.

We also have published a written report introducing an overview of this very important information.  Our work covers the essential financial education needs of high school parents with children who want to attend college, and it reviews the college funding experience in one current and easy-to-follow FREE report.   We have given this valuable report the title “Nine New Ways To Beat The High Cost of College,” and it is a terrific reference for parents when it comes to understanding the foundations of paying for a college or university degree in the near future.  For a free copy of the “Nine New Ways To Beat The High Cost of College” report, send an email to info@midwestcollegeplanning.com  We will send out a free copy to you without delay.

Until next month,

~Marc

Early Strategies for College Funding

 

“Playing the ‘Long Game’ –  Early Strategies That Pay Off In College Funding

Dear Parents,

One of the things that we hear from a number of parents over and over again – especially as the time comes for their child to graduate from high school and head off to college – is the refrain “I get the feeling that we REALLY should have started this whole thing sooner.”  Unfortunately, in many cases, we tend to have to agree with them.  If experience teaches us anything through working on college funding year after year, it is that the earlier a family gets started on things, the more favorably things seem to end up as the college years begin!

That is not to say that we cannot assist families who have procrastinated a bit (or a lot), but there is no question that things can sometimes get a lot more complicated and challenging in those cases.  We endeavor to help all families who seek our assistance, but it can be a big relief on all sides if families have decided to start early and “play the long game” when it comes to preparing for the money side of their child’s college experience.

It should be pretty clear that college costs are definitely not on the decline in the United States, so with that reality in mind, it is becoming increasingly important for folks to start their college funding process as early as possible.  Undergraduate student loans will be at 5.05% and Parent Plus loans will be at 7.6% as of July 1, 2018.

Over time, we have learned a number of aspects of the college preparation equation that can be started early on – and also have seen how families can benefit from making the decision to stay ahead of the game by starting early.  The “long game” can include elements that extend throughout the high school years, or even before, and other elements that need to be started as early as possible, but within a specific window of time.

In an ongoing quest to help with this effort, this month’s newsletter covers a number of different things that families can consider as part of their planning for a college future for their kids.  Some of them may be things that you can consider now, others will apply directly to the year in which a child applies for college and financial aid, but all of them are important.

One thing you will note is that we make frequent reference to consulting with a College Funding Advisor – and this is because these things require a firm grasp of the process.  There are families who can manage without our help, and some certainly do.  However, we have a track record of dealing successfully with these financial elements and optimizing them for families in a way that most people cannot.  Should you have any specific questions about the tips below, please do not hesitate to call us.  We will be happy to help in any way that we can.

Tip 1: File The FAFSA Early

The old saying that “the early bird gets the worm” bears particular weight when it comes to financial aid. There have been new and positive changes regarding the FAFSA in the past year. For one thing, parents are now able to file on October 1st rather than waiting until January 1st. This new rule will make it infinitely easier for parents applying for next year to get a start on their financial aid process and stay ahead of the game.

It is also important to note that there are schools that distribute aid money on a first-come, first-served basis. They will continue to distribute until those funds are totally exhausted. Additionally, there are currently seven states that currently have a first-come, first-served financial aid policy for state aid. These states are Alaska, Illinois, Kentucky, North Carolina, South Carolina, Vermont, and Washington.

If you are submitting early, this can mean that you need to use some estimates on your application.  Because of this, you simply need to go into the website later to update the estimated information with the more accurate numbers as soon as you have them. The IRS Data Retrieval Tool, however, is also available to insert current data without the need for you to enter and update the information manually.

There are also some schools that will want to use the additional “CSS Profile” form to assess financial aid eligibility. This application requires more information than is necessary for completing the FAFSA. The CSS Profile will also sometimes have a deadline that is different than the FAFSA, depending on the school. Because of this, it is important to check all the details for each school very carefully.

Tip 2: Make Wise Money Decisions

When the FAFSA formulas are applied to your child’s assets, the government can and will assume that a significant portion of your child’s funds are eligible for use for college. The rate at which the assets held by the parents is assessed is maxed out at a much lower rate. Because of this, family funds should be managed in a beneficial way so that they are not placed in the formula and unduly assessed at a much higher rate.

This is something that your college funding advisor can discuss with you, and his or her advice can make a huge difference!  He or she will be able to explain which options are the most beneficial for you and your child, and which will affect your bottom line most favorably.  Learning where funds can be placed and protected will frequently allow a college student to maintain some assets intact while at the same time making him or her eligible for a more substantial financial aid offer.

If your child is very young then you can save in parental savings accounts instead of accounts set up in your child’s name. This will further protect your child’s funds when it comes time for those funds to be assessed in the financial aid formulas.  Discuss these details with your College Funding Advisor for best results.

Tip 3: Explain Yourself – If You Need To

Unexpected things can happen in life – an accident, a death in the family, a divorce, an illness. These are all things that can occur and can cause a disturbance in one’s life and may result in the need to explain extenuating financial or personal circumstances. If you are the main breadwinner in the family and were unexpectedly injured and it required a long recovery period away from work then this is something that could be explained on your FAFSA application. There are many questions on the application on the form but there isn’t a section that is labeled “Extenuating Circumstances.”

For example, if you or your spouse were laid off from work then you could explain this to them in a detailed letter. It is important to provide as much documentation as possible to bolster your claims for consideration. For example, a notice from your company detailing recent layoffs would be the right type of backup information that would be useful to be included.

Tip 4: Spend Some Money – But Not Too Much

Having a lot of money in your savings account is always a good thing!  Well, OK, except for when you are applying for financial aid with the FAFSA. Since the assets will be assessed at the time of filing, sometimes it’s a good idea to whittle some of those assets down so that you have a lower asset base to be assessed when you file. If you have credit card debt, this would a good time to pay it off. Or, you could pay more towards your mortgage. There are a number of options available, and it is good to discuss them with a College Funding Advisor to see which best suits your situation.

Remember that there is a considerable amount that can be sheltered in the formula before it is assessed (approximately $50,000) so this tip is most worthwhile for those who spend a lot and save a lot.

Tip 5: Pay Attention To Your Assets

There are many things that must be reported on your FAFSA. But, not EVERYTHING needs to be reported. For example, bank and brokerage accounts, CDs, mutual funds, college savings plans, stocks and bonds, real estate and other types of investments are included in the reportable assets category.

There are, however, quite a number of non-reportable assets that may provide some much needed flexibility. These non-reportable assets are the equity in your home, annuities, IRAs, 401k plans and other accounts like that and a small business that is owned and operated by your family.

If you have some concerns, you could consider moving some assets over to the non-reportable category. This, of course, can be discussed in detail with your College Planning Advisor who will be able to show you the best ways those assets can be strategically placed in order to maximize your ability to receive aid.

Tip 6: Be Honest!

There are many ways to strategize and plan the best ways to maximize your child’s financial aid benefits. However, being dishonest in any way on the FAFSA form is definitely not the way to do it. Misreporting, misleading or lying about assets or income is a type of fraud and can result in a fine of up to $20,000.

In addition to the fine, any financial aid rewards are forfeited and there is even a possibility of prison time. Needless to say, it is just not worth the risk and it is definitely not the right thing to do. Working with a trusted advisor will result in the best results and will give you peace of mind at the same time.

We have other ways of helping the parents of college-bound students to learn important details regarding the fiscal preparations for college or university studies.  One way we manage this is via our in-person College Funding Workshops.  These workshops, featuring information directly from the finest college funding professionals around, offer a wonderful service to those who are seeking pertinent details regarding the costs of higher education.  These presentations are kept both timely and focused, with current information that is abreast of any recent changes that can affect rising college students and their families.

Our workshops do not require any entrance fee, but to keep groups to a manageable size we do insist on reservations in advance.  If you would like to know more about upcoming College Funding Workshops near you, please contact our workshop crew at 614-934-1515.  These helpful folks can provide all the necessary information about content, workshop locations, scheduling, or any other workshop questions.  They can also assist with reservations, should you wish to make one.

Aside from the workshops, we also provide a written report for parents who prefer to receive their college financial information in written form.  We have titled this report “Nine New Ways To Beat The High Cost of College.” Just like the workshops, it is available to all parents free of any cost or obligation.  To receive a copy of “Nine New Ways To Beat The High Cost of College,” you can call a member of our team at 614-934-1515 and we will send one to you right away.

Until next month,