Paying for College Without Going Broke, 2017 Edition - Princeton Review, Kalman Chany (2016)
Part IV. The Offer & Other Financial Matters
Chapter 11. Looking for a Financial Aid Consulting Service
Looking for a Financial Aid Consultant
At this point you may be rubbing your hands together and saying:
“I’m ready. Bring on those need analysis forms!” or you may be saying:
“I’d rather eat cement than ever look at those forms.”
You know quite a lot about the financial aid process and you know how to take control of that process. You also know yourself, and if you don’t want to get any more familiar with this subject than you already are, you can hire someone to do it for you.
What a Financial Aid Consultant Does
A good financial aid consultant will do far more than simply fill out the forms. Anyone can throw together numbers on a paper. Principally, you hire a consultant to examine your entire financial situation ahead of time and make recommendations to increase your aid eligibility. A good consultant will know the specific rules that govern aid in your state, will be up to date on the constantly changing regulations that govern tax law and financial aid, and will assist you to complete the forms to maximize your aid eligibility.
There are several different kinds of professionals who may offer their services to guide you through the financial aid process: accountants, financial planners, tax lawyers, tax advisors, and financial aid consultants (who specialize in this field alone).
Why Your Accountant May Say He Is Willing to Do the Form Even If He Doesn’t Want To
Accountants want you to come back to see them next year. Even if your accountant hates preparing need analysis forms and even if he knows very little about the financial aid process, he will probably tell you that he’ll do the forms for you. He’s afraid that if he says no, you’ll go to another accountant and he’ll lose your regular business.
Why You May Not Want to Let Him
At stake are tens of thousands of dollars. You do not want to be your accountant’s guinea pig. If your need analysis form is his first, or even his tenth, you may not get the best aid package possible.
Of course there are accountants, tax lawyers, and financial planners who have made it their business to learn the ins and outs of financial aid. The problem is finding out whether you are dealing with one of these knowledgeable experts or a rank beginner before you place your child’s future in his hands. How do you find a competent person?
Ask Your Friends for Referrals
There is no licensing organization in this field, and asking your local Better Business Bureau about prospects will only reveal the most egregiously bad apples. The best way to find a good aid consultant is to ask your friends for a referral. This is far better than responding to an unsolicited sales pitch you receive in the mail or by phone. Some questions to ask your friends:
✵ Did the consultant give them the forms in time to meet deadlines?
✵ Was he available throughout the year for planning?
✵ Did he give them an idea of what their Expected Family Contribution would be, and was it reasonably correct?
✵ Did he provide them with strategies to maximize aid for the coming year?
It’s always hard to know what kind of packages a family would have received had they not gone to a professional for help, which makes objective comparison difficult. However, if your friends came away from the experience feeling that the professional knew the process inside and out and that they had been well taken care of, then you are probably in good hands.
Fees can be expensive, but if a professional can find ways to increase your aid eligibility by thousands of dollars, even a relatively expensive fee is a bargain.
Be cautious with professionals who try to sell you financial products. They may be more interested in selling you financial investment instruments you may or may not need than in getting you the most aid. You should also be suspicious if a consultant promises that you’ll receive a certain amount of aid before reviewing your situation. And pass immediately on any professional who tries to steer you toward anything illegal. Please report any unprofessional behavior to the Better Business Bureau immediately.
Some Questions to Ask the Professional
Before you engage anyone to give you financial aid advice, you might want to ask a few of the following questions:
✵ What is the name of the state grants awarded here in ___________?
Any professional who does financial aid consulting should certainly know the name of the state grants offered by your home state. Each state calls its grants something else, and each state has its own set of rules as to who qualifies for these grants. If the professional doesn’t even know the names of the grants, he probably doesn’t know the rules under which they are dispensed either.
✵ Should we put assets in the child’s name?
A competent professional should know that student’s assets are assessed at a much higher rate than parents’ assets. If the family is eligible for aid, putting money in the child’s name can be a very expensive mistake.
✵ Which year’s income and assets do the colleges look at?
To determine what a family can afford to pay for college in the academic year of 2017-2018, for example, the colleges look at the income from the prior-prior year; in this case, 2015. They look at assets as of the day the need analysis form is completed.
✵ What is the difference between a Stafford loan and a PLUS loan?
Both are sponsored by the federal government, but the Stafford loan is made to students, while the PLUS loan is made to parents.
✵ Could you explain a couple of terms for us?
Go to the glossary and pick a few terms at random. An experienced professional should have no difficulty defining those terms.
One Question Not to Ask:
✵ Could you tell us if we qualify for aid?
Of course this is the one question you really want answered, but no competent consultant could answer this question without a detailed analysis of your situation.