Back in December of 2018, I wrote a blog that focused on helping parents understand that they don’t have to settle for the first offer a college makes in the initial award letter presented to their student.
And, because it’s the time of year when award letters start rolling in, I thought it would be helpful to share the experience of a family I worked with to illustrate that comparing award offers and knowing how to share that competitive information with the financial aid officers of the various colleges not only matters – it can result in a better financial outcome for the family.
James was one of those kids everyone loves: personable, humble and hardworking. Almost all the schools he applied to offered substantial merit-based aid. Neither of his parents had gone to college, and he had two younger brothers. The whole experience was both exciting and overwhelming.
Mom called me with a frantic tone in her voice one day. “He’s got it in his head he needs to go to Creighton, but it looks like it’s more expensive to go there than the University of Denver.”
She was right.
A simple “apples-to-apples” comparison suggested it would cost him $4,800 a year more to go to Creighton… $19,200 over 4 years.
But James really liked the vibe at Creighton and it had a strong track record for placing undergrads in the graduate program he had his heart set on.
James was down in the dumps because his parents made it clear he would attend a school that “fit” – academically and financially. They had two other boys to put through college and James understood the realities of being the oldest.
He naturally thought once the initial award letters were received, he had to make his choice.
I explained to the family that James should share the award letter from DU with the financial aid department at Creighton.
He should then explain that his decision would be heavily influenced by finances, but if all things were equal, he’d choose Creighton. He and his mother looked at me like I was from another planet. They had no idea it was possible to have this kind of conversation.
As far as they knew, you get what you get.
I let them know that it might not work. Having an impressive award from another school doesn’t automatically mean a college will change what they’ve already offered. In James’s case, an interesting thing happened.
Creighton told him to call back in three weeks. What James didn’t understand at the time was the financial aid department was waiting to see what was “coming back into inventory,” which refers to the money offered to desirable students who end up going elsewhere.
In short, they didn’t know if they’d have more money or not, so they asked him to call back.
He did – three weeks later – as soon as the financial aid office opened. The school was pleased to tell him they found an additional $5,000 in merit-based aid per year and would be delighted if he would accept the offer.
Will this scenario play out for everyone? No. The school has to want the student and similar responses can’t be expected at every school – but it’s worth asking.
How many 18 year-olds have experience conducting a $19,200 conversation? Talk about a teachable moment!
Because if your student has done well in high school, if you’ve put your financial house in order, and if your family has applied to schools that view your student as a desirable addition to their incoming freshman class, colleges will create meaningful incentives for attendance.
This is why students like James shouldn’t take the initial offer at face value. They should view it as an opportunity to reach out to their school of choice and ask if they’re willing to improve their initial offer based on the awards made by competing schools.
After all, what do you have to lose?
If you’d like to learn more about this topic and a host of others, you can check out my book “Never Pay Retail for College.”