Financial aid decisions are meant to be based largely on a family’s ability to pay for college. But what happens if financial circumstances change after the FAFSA is filed?
That’s just one of the reasons you might choose to appeal a financial aid decision. It’s happening more frequently as families come to terms with the economic consequences of the pandemic. Here’s what you should do if the financial aid you’ve been offered doesn’t seem like enough.
When you’re accepted to college, the university submits a letter detailing how much aid you receive, including federal student loans, grants, and scholarships. Colleges use information from your Free Application for Federal Student Aid (FAFSA) to determine your Expected Family Contribution (EFC).
The EFC is the total amount the college believes your parents can afford to contribute toward your college expenses.
If that amount is not enough to cover your expenses, you can appeal the decision and ask for more money. Both new and returning college students can appeal their financial aid decision.
To successfully appeal, you’ll need to provide proof that your or your parent’s financial situation has declined since you received your financial aid letter. Examples of proof include a letter of termination, unemployment benefits, a parent’s death certificate, divorce filings, and unexpected medical bills.
Other examples of negative events include getting married and no longer being a dependent, experiencing a natural disaster like a hurricane or tornado, or a parent becoming disabled.
Don’t underestimate what counts as proof. Your parents adding a dependent, like a grandparent or new child, will also affect your EFC. The more data you can provide to back up your claim, the greater chance you have of succeeding.
Once you’ve gathered these documents, scan the original and store it on a cloud-based system like Google Drive or Dropbox. If you need to send a physical request to your university, make copies of the original documents. You could lose or damage the originals, so don’t use those. Make sure to send the documents by certified mail so you can verify that they’ve been accepted.
Write an Appeal Letter
When you file a financial aid appeal, you’ll likely have to write a letter outlining your financial circumstances and why you need more money. This letter is your best chance to convince the financial aid administrator that you need more funds.
Be polite and respectful when writing the letter. Have a friend or loved one read it to ensure that your tone is appropriate. Remember, the college is under no obligation to offer you more aid.
Use hard numbers, like a parent suffering a $20,000 salary cut or being hit with $10,000 in surprise medical bills.
“It might be tempting to make an emotional appeal, but it will probably be more effective if you have a concrete reason for why they need to adjust your financial aid award,” said Certified Student Loan Counselor Rebecca Safier of StudentLoanHero.com.
Send the appeal as soon as possible after your circumstances have changed. Safier says you can appeal any time – even in the middle of a semester.
Don’t ask for a specific amount in the letter, because the university may offer more than you expect. If you received more financial aid from another university, you can use that offer as leverage to ask for more aid. Just make sure that’s not your only reason for asking for more money.
Ask for More Merit-Based Aid
The most common reason for an appeal is a decrease in income. However, Saifer said the second most popular reason is an incoming student received better grades their senior year. In this case, they can request more merit-based aid.
If you received any private scholarships from third-party organizations, you can contact them and ask if there’s an opportunity for more money.
Safier said merit-based aid is much more common at public universities, so students at private schools may have less success in that regard.
Safier said most financial aid departments take between two and four weeks to render a decision. Check back with the administrator if you haven’t heard back after a month. They may have follow-up questions or request more evidence that your financial situation has worsened.
If you receive new information during the review process that further impacts your and your family’s financial situation, you can contact them to request that these details be considered.
What Happens if They Deny Your Request?
There are other options to explore if the university denies your request or if they don’t provide as much aid as you need.
First, your parents can take out a federal Parent PLUS loan to fund your education. The total amount a parent can borrow with a Parent PLUS loan is the cost of attendance minus any other loans, grants, or scholarships.
The college will check your parent’s credit report before issuing a Parent PLUS loan, and parents with any delinquencies, defaults, bankruptcies, foreclosures, or other negative events may be denied.
The interest rate on a Parent PLUS loan is currently 5.30%, which is similar to other federal student loans. The loan will remain in the parent’s name, so there is no legal obligation for the student to make payments. Further, the parents cannot transfer the loan to the student’s name. Like other types of student loans, parent PLUS loans qualify for extended deferment and forbearance periods, as well as income-driven repayment options.
If your parents don’t want to take out a loan in their name, you can take out a private loan in your own name. You’ll usually need a parent to cosign on the loan, but you’ll still be the primary borrower. Private student loans often have higher interest rates and fewer deferment and income-based repayment options than Parent PLUS loans.
You can refinance a Parent PLUS or private loan to get a lower interest rate or lower monthly payment. But when you refinance a Parent PLUS loan, you forfeit all the related benefits that federal student loans have.