In this series, I am going to discuss an extremely important topic – one that will significantly impact both your child and your bank account.
I am talking about…
How To Negotiate The Best Deal On A College Education!
Most parents take this subject lightly, and figure whatever the schools end up offering them is the best that they will get.
Let me tell you something.
Nothing Could Be Further From The Truth!
Let me ask you a questionwhen you went to purchase or lease your car – did you accept the first offer they made you, or did you look at their price as a “starting point” for negotiation?
What about when you bought your home? Did you purchase it at list price, or did you muster up all of your negotiating skills to try to get the seller to come down in price?
So why is college any different?
Even the cheapest state schools today will cost you about $20,000 between tuition, fees, books, room and board, and miscellaneous expenses.
A private university can easily cost you $45,000-$60,000 a year and up.
Now multiply those amounts by 4. Wow!!! And that doesn’t even include graduate school (God forbid!).
Are you starting to get my point yet?
A college education for your child (or children) is one of the single biggest investments you will ever make in your entire lifetime!
Doesn’t it make sense to treat it like any other major purchase, and do your best to negotiate the best possible financial aid package for your child?
So Where Do You Begin?
Well, for starters, your children should be doing their best to get good grades in school. In addition, they should be taking some type of review course to get a good score on their SATs/ACTs (it’s a little late for seniors, but not for juniors or even sophomores).
Second, you must start narrowing down your school choices to colleges and universities where your child lies in the top 10% of the applicant pool – this will significantly increase your chances of getting a good financial aid package.
Next, you must start researching schools that have the best policies on giving good financial aid packages. You want your child to apply to schools that will meet most or all of your family’s financial need. It is also important to pick schools that have a history of giving more FREE money and fewer loans.
Hint – Pick schools that are well endowed and have a lot of money to give out to students. Private schools tend to have far more money available than state schools do. We recommend picking a couple of state schools as “safety” schools and the rest should be well-endowed private schools.
Fourth, you must apply to, at least, 6 – 8 schools to ensure that your child gets a good offer from 1 or 2 of them. If all the schools are the same academic caliber, and some give you a good financial aid package while others give you poor packages – it will allow you to leverage one college against the other when negotiating for a better financial aid package. Schools of equal caliber will ftentimes compete for the same student by offering aggressive financial aid packages. Be sure to take advantage of this.
Lastly, you must know your numbers in advance.
For example, do you know what your “Expected Family Contribution” is?
It is the minimum amount that the government expects you to pay towards ANY school.
Schools determine what they are going to offer you by subtracting your Family Contribution from their “Cost of Attendance.”
This provides them with your family’s “Financial Need.”
Frequently, schools will offer parents far less than what they were eligible to receive. Most families don’t dispute this since they have no idea of what they should have been offered in the first place.
Don’t Let This Happen To You!
Know your numbers in advance.
Find out what your Expected Family Contribution is. Then, find out what the cost of attendance is at each school. Make sure the schools include all costs such as tuition, fees, books, room and board, living expenses, transportation, and miscellaneous expenses.
Once you get these two numbers, calculate your financial need at each school, and make sure their financial aid package meets most or all of your need.
If they don’t, call or write the school to discuss why they “left you short,” and try to create a subtle competition with other schools your child applied to.
If you follow these steps, you should have no problem getting a great package from at least 2 or 3 of the schools your child applied to.
Check your email next week for the next “College Tip” in my series where I will be discussing Failure To Take Advantage Of The New Tax Breaks Under The Current Tax Codes Could Be Hazardous To Your Wealth — A Quick Start Guide To The Educational Benefits Of The Current Tax Laws & Provisions.