Today’s blog is a nod to Eminem and the Superbowl half-time show; thus the quote in the intro. And now, we are happy to feature a piece from Mark Salisbury, co-founder, and chief executive officer of TuitionFit. TuitionFit empowers the public to create real college price transparency by sharing actual pricing information. This piece is intended for a consumer audience, not professionals, but presents ideas that are useful for all. We suggest that ALL of our families use and contribute to this amazing, crowdsourced, transparency-inducing platform.
“Wait, what?! People negotiate college prices???”
Yep. All the time. [That is why we ask you to be patient before committing! Keep your leverage.- Lee]
In fact, most colleges wish that more accepted applicants would ask for a lower price.
Now pick yourself up off the floor and keep reading. Because knowing this simple college cost hack may well save you thousands of dollars.
You Say Negotiate, They Say Appeal (let ’em have this one) Before we get started – a quick tip about word choice. Colleges care a lot about keeping up appearances, especially when they need to prop up the idea that they are blissfully above the fray. So it’s not a real surprise that admissions offices don’t take too kindly to being lumped in with car salesmen or real estate agents. In particular, colleges get awfully prickly when someone asks if they will “negotiate” a better price. That’s when the financial aid staff will college-splain to you that they don’t negotiate, but they will be glad to consider your appeal.
Although this weird arrogance might turn your stomach (especially if you built your kid’s college fund with money you made selling something), you need to let the colleges have this one. Because at the end of the day, you don’t really care what anyone calls it. You just want a lower price. So dial up your sweetest Oliver Twist voice, take a breath, and ask how you can appeal for more financial aid.
There’s Gold in that their Yield Rate
Lots of colleges brag about their crazy low admission rates (the percentage of applicants that the college accepts), hoping the public will conclude that those colleges really must be able to charge whatever they want. But this is just marketing sleight of hand. There’s another number, the yield rate, that actually tells you how “in demand” a college is. The yield rate is the percentage of accepted applicants that actually enroll. Admit rate vs. yield rate is sort of like the difference between an “oh my god, YESSS!” and a “thanks for paying for dinner, but let’s just be friends.” A high yield rate is what high demand really looks like. A low yield rate just means that the college gets dumped at the altar a lot.
Pull back the curtain, and lots of supposedly very selective colleges turn out not to be nearly as popular as they’d like you to think. For example, Northeastern University proudly talks about admitting only 20% of their applicants. But they aren’t so loud and proud about the fact that only 27% of those individuals actually enroll at Northeastern. Likewise, Grinnell College, with an admit rate of only 19%, loves to tout their exclusivity. But their reality? Only 1 out of every 4 of those accepted applicants actually chooses Grinnell.
So what does this have to do with asking for more aid?
When a college sends out acceptance notices, they get one of three responses.
OMG, I’m sending my deposit today!
Thanks, but I’d like to appeal for more financial aid.
crickets
Although the number of students and families appealing for more financial aid has increased in recent years, the vast majority of accepted applicants just vanish into thin air. For a college with a high yield rate, this is a minor annoyance – something they can dip into a short waitlist to fix. But for a college with a lower yield rate, the fact that so many accepted applicants simply disappear dramatically increases the pressure to convert the ones who keep in touch.
From the college’s point of view, an accepted applicant that appeals for more financial aid is an applicant that might still commit. So it’s in the college’s interest to keep communicating with you: to find ways to keep enticing you to commit. This is why many colleges actually build wiggle room into their pricing strategy so that they can entice you by sweetening the pot.
What???
In this case, it really is just like the dance you do when selling a house or buying a car. In almost every case, the first offer – no matter who makes it – is not the final price. It’s just a starting point. In the case of college pricing strategies, this just means that the first offer they send out to most students intentionally gives the college room to drop their price and still meet their revenue goals.
The way to get them to drop that price? There are two options:
Wait and hope that they will decide to send you a second financial aid offer with an extra bump in it to get you from “on the fence” to “let’s do this.” This actually happens from time to time, when a college realizes that they are trending way short of their enrollment goals and need a Hail Mary to improve their tuition deposits.
APPEAL! Ask for more financial aid. You don’t care if they justify the additional aid as an increase in need-based aid or an addition to a merit scholarship. You just want more aid.
How do you do that? We use 2 tools: TUITION FIT and QUATROMONEY to help look at whether the offer is good, compared to other similar students from similar families AND to see what our price over 4 years will be and which loan options are the best over time.
So …. What are You Waiting For?
Today, most colleges and universities are happy to reconsider the first price they offer. They might not give you the price that you were hoping for, but in many cases, they have already prepared to adjust their price in order to get you and your student to commit.
But you have to ask. And from the college’s perspective, they would much prefer that you ask for more financial aid than simply vanish into thin air. If you ask for more, that tells them that you are still in the mix. As long as they haven’t already reached their enrollment goal (which most colleges haven’t been able to do in several years now), you can increase the college’s motivation to improve their financial aid offer by simply showing them that you are still in the mix. And you do that by asking to appeal for more aid.
You have absolutely nothing to lose.