It's well under way at college and university Financial Aid offices-"packaging season." For financial aid administrators, particularly at four-year institutions, February through May is the busiest time of the year. And, after packaging (that is, the process of determining and creating individual financial aid awards for admitted students) slows down, the "appeals" process begins.
Financial aid appeals (requests from parents and/or students to offer additional financial aid, particularly grant funds) may or may not play a valuable role in meeting new student enrollment goals. However, appeals are both time consuming and time sensitive. Managed incorrectly, they can lead to unnecessary financial aid expenditures with no additional enrollment-thus exceeding the established budget, increasing the discount rate, and lowering net tuition revenue, even if enrollments increase.
Colleges are not car dealerships; most aid officers cringe at the mere thought of negotiation.
Clearly, leadership in both Admissions and Financial Aid should be involved in the process in order to provide a balanced approach to meeting all institutional goals, including not only the size of the class, but other critical attributes-for example, quality, diversity, and net tuition revenue. Given the dicey nature of this business, here are some of the more common pitfalls that should be avoided while processing financial aid appeals.
1. Low-balling the original financial aid offer.
While the notion of sending a low initial financial aid offer and waiting to see if the family appeals is tempting, this practice is risky and not recommended. Some families are sophisticated and/or determined enough to contact the Financial Aid office and request additional financial assistance. Others, however, may be so deterred by an unaffordable offer that they mentally move on to the next more feasible option. Instead of saving the institution financial aid, this policy may lead to lost enrollments and ultimately lost net tuition revenue. Ideally, the best financial aid offer should be presented either at the time of acceptance or immediately after.
2. Having a lack of clearly defined policy.
Whether your institution's policy ranges from no consideration for appeal requests to a willingness to negotiate packages-or that policy lands somewhere in between-it is critical that staff in Admissions, Financial Aid, and any other office involved in recruitment activities understand and can communicate the steps a family must follow in order to initiate a secondary review.
Establishing the following ahead of time will be advantageous for everyone involved: a description of the appeals process; a list of the committee members who will perform the review; specific guidelines under which an adjustment will be considered; and the sources and amounts of funds available to award. General information for prospective students and their families about the appeals process may also be included in the financial aid section on the institution's website, as well as in print materials sent along with award letters. A clearly defined policy will discourage frivolous requests and make the process more efficient overall.
3. Allowing negotiation vs. professional judgment.
Armed with various financial aid award letters that present different out-of-pocket costs for the same student, parents often see this as an opportunity to "negotiate" a better deal by playing one school against another, as if buying a car. Not only are colleges not car dealerships, but most financial aid officers cringe at the mere thought of negotiation. Avoid entering into this bidding war!
Typically, this situation occurs when merit aid is included in the financial aid award. Since merit scholarship criteria differ from one institution to another, and amounts can range from no merit aid to full tuition scholarships, it is common for students to see vastly different offers from similarly priced schools and little (if anything) that the aid administrator can do to bring the awards closer together.
On the other hand, appeal requests may fall under the principle of "professional judgment," which gives financial aid administrators the authority to make adjustments under special circumstances. When these adjustments are made, the results may cause one institution's financial aid award to differ significantly from another. Keeping in mind that the first financial aid offer should be the best, limiting increases to these professional judgment cases (or cases where need was not met initially) is highly recommended.
