As a young person approaches the age at which they can obtain a driver’s license, many families start to plot out how to buy another car for the family. In doing so they’ll consider the features of the car, gas mileage, etc and might ultimately end up haggling with a dealer over price. However, many families fail to take the same sort of approach a couple of years later when it is time to shop for college, especially the haggling part.
In fact, very few people realize that the price of college is something that can be negotiated and here is how. Let’s start by quickly summarizing the financial aid process. In the winter or spring of a child’s senior year, the family will file taxes for the previous calendar year. Once that is completed, the family will need to file the FAFSA which is the federal clearinghouse for all student aid. Following that, the student will begin receiving financial aid packages from all of the colleges to which they were accepted. These financial aid packages will include grants, scholarships, work study opportunities, and federal loans. These, combined with the amount FAFSA calculates a family should be able to afford to pay out of pocket, should meet the sticker price for the school. In negotiating, your goal is going to be to up the amounts of the most ideal aid components like scholarships and lower the amounts of less desirable components like loans.
The first thing you have to do in the negotiating process is to make sure you haven’t already accepted admission. That would be like buying a car, signing all the paperwork, and then saying, “Now, let’s work on that price.” Next you need to make sure your child is competitive for what you are trying to do. If your child barely got into a given college in the first place, the college is not going to be very motivated to negotiate. So unless you have a very elite student, you need to make sure that you will be negotiating with schools for which your child is near the top of the freshman profile. You child needs to be someone that college is willing to compete for and that could mean applying at some colleges that are at a lower tier than what your student is capable of gaining acceptance to. Once you can check those two things off, you’re ready to make some phone calls.
There are really two ways to go about this. The first is to try to pit one college against another. In this case, the caliber of your student is crucial. If indeed you have a student who will be coveted, the conversation is really as simple as calling school B and saying “We really want to attend college with you guys, but school A has offered us X which is significantly more affordable so we are hoping you can give our financial aid package a second look.”
The other approach is to try and highlight some component of your finances that may not be well reflected in your FAFSA. This could be something like, “We did well last year, but dad was laid off in late December, Mom just got diagnosed with cancer and will be starting chemo, an elderly grandparent is moving in with us so we have another mouth to feed, our house was destroyed by a tornado, etc.”--basically anything that significantly impacts your finances but might not show up on standard financial reporting. Regardless, you will need to be prepared to document whatever you are trying to claim.
For either strategy there are some basic, common sense rules. Be friendly and business like. Remember that you are asking someone for a favor to give you more money. Always get the name of the person you are talking to and try to speak to someone as high up the ladder within the financial aid office as you can get a hold of. Avoid using words like bargain, negotiate, or haggle. That is what you’re doing but those words bring an unpleasantness to it all. Lastly, it might not be a bad idea to have a target number in mind of what you are hoping the college gives you. You can share that with them at some point in the process, just keep mind that there is a good chance college is not going to be completely free across the board for your family.
