A faltering economy, rising tuition, and a growing militancy by parents are combining to turn 2008 into a banner year for appeals for more financial aid. Shocked by the average $5,300 gap between what the government estimates they can afford to pay for college and the bill left after the college's financial aid offer, more students and parents are calling, writing, and even visiting campuses this spring to request more aid.
Unfortunately, financial aid officers say about half of those pleas will be denied. A recent appeals committee meeting at the University of Maryland-College Park showed why. Financial aid officers at public universities like UMD are bound by the federal government's stingy rules and toughened by hundreds of wealthy parents' attempts to squeeze extra aid out of the school's meager budget. The office's 19 staff members deal with nearly 26,000 undergraduates, so they have little patience for those who fail to file on time, march entire families into the office to make personal appeals, or even attempt to jolly up the aid officers with boxes of chocolates.
Sarah Bauder, Maryland's financial aid director, who permitted U.S. News to observe an early April meeting of the appeals committee, says her officers are more likely to approve a student's personal appeal, however. "We are much more impressed when the student takes ownership." They also increase aid for students the school wants to recruit and for deserving students who prove they really need help.
The Recession victim. Five case managers lug files and calculators into Bauder's turtle-decorated office. (Motto of the UMD Terrapins: "Fear the Turtle!") Bauder kicks off the meeting by reading one letter: A parent claims that the falling dollar is wiping out the family's import business. That means they'll have less income to pay their children's college bills than reported on their Free Application for Federal Student Aid, or FAFSA.
Dan Beaty, a senior financial aid counselor, jokes, "If they switched from importing to exporting, they'd be golden," but then the discussion turns serious. Typically, UMD tells appealers who say their income has declined to wait until July 1 and document the first six months of the year's finances to avoid making rash judgments based on a blip. The vast majority of the time, the university discovers that the parent has exaggerated the decline, and the university awards less aid than the family requested, Bauder says. But Bauder thinks this family's claim is probably valid and pressing. "I think we should do something more. Waiting until July 1 may impact the student's willingness to come to us," she says. The family name seems familiar to her, so she checks her computer. A sibling is attending, increasing the likelihood that the family is committed to the school.
Decision: Bauder will ask for last year's tax return and a July 1 update on the business. A moderate decline would switch the student from an unsubsidized to a subsidized Stafford loan. That will reduce the student's interest rate from a flat 6.8 percent to 0 percent while the student is in school and 6 percent after graduation, saving nearly $2,000 in interest on a $3,500 freshman loan over 10 years. It would take a very dramatic decline to qualify the student for a grant, however.
The Mortgage reset. Associate Director Monique Boyd reads a letter from an out-of-state single mother who says her mortgage has jumped so high she can't pay it, let alone anything for her child's tuition. The mother lists her many bills, including some from a hospital.
The FAFSA doesn't qualify students for financial aid based on their families' actual expenses. Instead, the FAFSA subtracts a standard cost of living from each applicant. So families with above-average housing, car, or parental debt are often shut out. Colleges are allowed to adjust the FAFSA for job loss, emergency, or other unavoidable costs, however. "We can deal with the medical payments," Bauder notes, and the committee members punch their calculators to see whether subtracting those bills would qualify the student for aid. No. "The problem is she bought a house that costs too much," Bauder says.