Students usually apply to several colleges during the search process. If the preliminary leg work is done correctly, several offers of admissions accompanied by several financial aid offers will be made. Most families look at the financial aid offer and conclude, "It's simply not enough." The next thought is, "I wonder if we can get more." The natural tendency is to find out what can be done to improve the financial aid package. Thousands of families call the financial aid offices at colleges around the country seeking more aid. While each family starts the conversation differently, they are all asking the same question, "Can I negotiate my financial aid package?"

Why would a college want to change my aid package?

Believe it or not, college admission is a competitive business. The job of those who work in the admission office is to attract, recruit and enroll the best class possible for their college. With more than 3,000 institutions recruiting the high school graduating class, it is inevitable that more than one college will be interested in each college-bound graduating senior. All institutions of higher learning know that cost is a major factor in college choice for most families and that many students will plan to attend the institution that provides the best financial aid offer.  

When a student decides to attend a particular college, they are also deciding not to attend others.  All of the effort that a college expends recruiting a student is wasted if the student decides to attend another institution. If too many recruits for a particular college decide to enroll elsewhere, the college may not fill its class. A smaller-than-planned-for freshmen class causes all kinds of problems for a college including not having enough tuition revenue to meet it obligations. As a result, colleges are often willing to do everything possible, including negotiating financial aid, to enroll prospective students.

Are all colleges willing to negotiate?

Some colleges negotiate but many do not. Colleges relying on federal monies to fund the bulk of their financial aid program do not have much flexibility to negotiate. Federal dollars must be awarded in strict compliance with federal regulations. These funds are awarded on the basis of demonstrated need and individual colleges are not at liberty to award federal monies in excess of need. As a result, most public institutions are not in a position to negotiate.

Private colleges have more flexibility to negotiate because they often have access to financial aid awards funded from private sources. As a result, they may be able to increase an offer of assistance. However, private colleges are also subject to the same rules and regulations as public institutions regarding the use of federal aid. If a private institution includes any federal dollars in a student's financial aid package, the total amount awarded from all sources, including the college's own funds cannot exceed demonstrated need. This means that if a college has already offered a package that meets 100 percent of demonstrated need, the college cannot offer more total aid to that student unless the college removes all federal funds from the financial aid package and substitutes its own funds for the federal  funds. If the college does this, then it can award additional monies beyond demonstrated need.

So if the regulations are so strict, how can some colleges negotiate?

Colleges that do negotiate typically fall into one of two categories: those whose initial offer did not meet 100 percent of demonstrated need, and those who are willing to substitute their own dollars for federal funds.  

In those cases where the initial financial aid package does not meet demonstrated need, the college can award additional aid to fill the gap that has been created, which means that the college can negotiate additional aid up to the value of the gap without having to reduce federal aid.

Colleges that have met full need may negotiate by substituting a more desirable form of financial support (e.g. grants and scholarships) for a less desirable form of aid (e.g. loans.)  Although the total amount of the package may stay the same, the revised package is seen as more desirable since a smaller amount has to be repaid over time.

How do I negotiate a higher financial aid package?

There is no set approach to negotiating your aid offer. There are, however, some general guidelines to follow.

Make sure the data submitted on the financial aid documents are accurate - The first step is to review the data that were submitted on the financial aid documents to make sure that income and assets have been accurately entered.  Any overstatement of annual income or assets will have the effect of reducing your eligibility for aid. If errors are discovered, bring the errors to the attention of the financial aid office and file a corrected FAFSA form.

Bring any special circumstances to the attention of the financial aid office - While the regulations regarding the use of aid are strict, the financial aid officer does have limited discretion with regard to handling unusual situations. If there are major changes in a family's financial situation after the FAFSA has been filed or the family experiences extraordinary expenses or the loss of employment, the financial aid offer may be able to increase aid.

Share competing aid offers with the institution - If you have what you believe is a better financial aid offer from a school that is comparable in terms of cost and quality, share it with the institution that you are asking for additional aid. Allow them to see what the competition has offered.

Be explicit about your expectations - If you have an additional amount in mind that you would like the college to offer, tell the college what that amount is and how you arrived at that amount.

Will it work?

It is impossible to answer this question until you have tried to negotiate. Those colleges that do negotiate normally do not advertise that fact, so the only way you will know if they do or do not is to try it. The worst that can happen is that the college says "no." If that's the case, you are no worse off than when you started. If they do reconsider your package and award additional funds, you are ahead of the game. They key is to approach the aid office in a polite professional manner.