Questions about the Financial Aid Appeal Process

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Mark Kantrowitz

By Mark Kantrowitz

May 9, 2020

During our webinar about How to Appeal for More College Financial Aid, participants asked dozens of questions about when and how to appeal for more financial aid for college, as well as questions about specific types of special circumstances. This article covers questions about the appeals process.

How subjective vs. objective is the financial aid appeals process? Is there some amount of math behind determining the amount?

The only subjectivity in the financial aid appeals process occurs when the financial aid office considers whether a special circumstance justifies an adjustment. Otherwise, the appeals process is largely objective and formulaic.

The amount of the adjustment is based on the financial impact of the special circumstance on the family’s ability to pay. For example, job loss results in a change in income on the FAFSA, reduced by the amount of any unemployment benefits or severance pay. This then yields a new expected family contribution (EFC), which changes the amount of financial need, which results in a new financial aid package.

The financial aid formulas do not change, nor does the college’s financial aid packaging philosophy, just the data elements that are input into the financial aid formulas.

Are universities allowed to consider an applicant’s past and future pledged giving history and overall volunteer history with the school when awarding institutional aid? Twenty years ago, I contributed more than $20K to my alma mater, and I also made arrangements for a flat percentage of my estate, which they are aware of. We filed a financial aid appeal due to medical expenses, an unusual bump in income and dislocated worker status, but we did not qualify for any more federal aid other than student loans. I think my appeal is “stuck” in the financial aid office. Is there a point at which I should reach out to someone higher up in Admissions or Planned Giving?

No. Financial aid and financial aid appeals are based on the applicant’s financial need and financial circumstances, not past or future charitable contributions. Charitable contributions do not affect the family’s ability to pay for college.

Charitable contributions are not considered to be a special circumstance, especially when they are voluntary in nature, regardless of whether they are to the college or to an independent organization. The U.S. Department of Education has even stated that tithing is not sufficient justification for an adjustment, along with vacation expenses.

Moreover, if a college were to consider the applicant’s charitable contributions to the college when awarding financial aid, it would cause the donor to retroactively lose the charitable deduction previously claimed on their federal income tax return. The college might have to pay excise taxes on the donation and would be at risk of losing its tax-exempt status. The IRS has very strict rules concerning donor-advised funds. Self-dealing is strictly prohibited.

There is no appeal beyond the financial aid office. Congress delegated the authority to make adjustments only to the college’s financial aid administrator. The decision of the financial aid administrator cannot be overruled by the admissions office, development office or the office of the president.

I plan to ask for clarification and/or review because of a significant difference in net price between three competitive private colleges in the same state. The financial aid package at the third college is lower than the other two colleges by the amount of the need-based state grant. In effect, the third college is counting the state grant as part of the financial aid it is providing, unlike the other two colleges. Is a financial aid appeal reasonable in such circumstances?

When there is a difference in the net price between two similar colleges, it is often a sign that one of the colleges was aware of the family’s special circumstances while the other was not. For example, one of the colleges might use the CSS Profile form, which includes a question about special circumstances, while the other bases financial aid solely on the FAFSA, which does not include a question about special circumstances.

If so, then appealing for more financial aid will provide the college with information about the special circumstance, allowing it to consider whether to make an adjustment.

You can certainly share the award letters with the college and ask why there is such a large difference in the net price. But, be sure to also mention any special circumstances that affect your ability to pay for college, such as job loss, a change in income, or anything that differentiates you from the typical family.

The difference in financial aid may also be due to differences in the resources available to each college. Wealthier colleges tend to give more grant aid.

Should a relative who knows about the special circumstances of the family and student also write a letter even though they are not at arm’s length?

Generally, it is best to provide independent third-party documentation of the family’s special circumstances, such as letters from school counselors, clergy, medical professionals, social workers, police and courts. Receipts are also helpful. A relative may not be objective.

Letters from family members are used only if there is no other source of documentation. Such letters should attest to facts, not opinions.

Would you be expected to sell all assets (e.g. second homes) first before applying for an appeal?

You are not required to sell any assets before appealing for more financial aid. A special circumstances review is focused on changes in the family’s ability to pay for college, such as changes in income from the prior-prior year. If income from rental real estate has decreased, that’s a change in income that may potentially justify a financial aid appeal.

The FAFSA excludes the net worth of the family home and small businesses owned and controlled by the family because Congress did not want to force families to sell their homes and businesses in order to pay for college.

A good place to start:

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