Haggling your college loans

Marketplace Staff Apr 13, 2007
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Haggling your college loans

Marketplace Staff Apr 13, 2007
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TESS VIGELAND: Right now, all over the country, high school seniors are deciding which colleges to say yes to. And part of that decision, no doubt, rests on how much financial aid they’ll be getting. Unfortunately, the financial aid system has a black eye right now. The New York Attorney General is investigating kickbacks and other unseemly schemes among financial aid officers and student loan lenders. But scandal aside, students still need money. And we wondered how students might get more than what they’re school choice is offering. Can you, should you try to haggle? Cindy Bailey is with the College Board. And Cindy, under what circumstances might a college amend that initial offer?

CINDY BAILEY: They would want to know two things. One, if there is something new that’s happened in the family since the family reported their situation. Two, the financial aid office. You know, has there somebody who’s lost their job? Has there been illness in the family? Has there been some catastrophic expense that wasn’t anticipated. The second thing would be if, despite the best efforts of the financial aid office, the family still thinks they can’t afford it. If they could just give me a little more here, or tweak this there, that would make all the difference.

VIGELAND: If you are going back to a school and asking for a better offer of financial aid, what could you potentially expect in return? Would you be looking at, you know, a different amount or a different interest rate? Or, kind of, what would the options be?

BAILEY: There could be many things. It could be a different amount, in terms of a loan amount. Most of the loans are quite similar in terms of their interest rates. So it’s not like they come back to you and say, you know, we’ll cut your interest rate. That’s, that’s pretty unlikely. It’s more a situation trying to see, is there somebody out there that either you haven’t accessed, or, where they might have additional funds where they could help you.

VIGELAND: But in terms of what the college or university is going to offer you, you’re not gonna go from, you know, an offer of $10,000 to 30?

BAILEY: That would be very unlikely.

VIGELAND: Yeah.

BAILEY: Unless the family situation has so radically changed.

VIGELAND: Yeah.

BAILEY: But could you go from 10 to 12, 10 to 11, if that’s all that would make the difference between going to the school or not. Financially, people are also bound by federal regulations, and often, state regulations. So sometimes, they don’t have a whole lot of choice either if your, quote, calculated need has been met. It’s just that they’re not free to sort of, because you make a good case emotionally. Just dip in, into the well more if they’re using federal money.

VIGELAND: Is it ever a good idea to try to play schools off one another? I mean, if you think you’re a really great candidate, and you’ve got all these schools, you know, wanting to admit you, go to one office and say, look, I’m getting a better deal from the other one. What can you give me?

BAILEY: I would not recommend that, although I know it’s probably done. The issue is not try to figure out where you’re gonna get the best deal. It’s still is an issue of where is the best match.

VIGELAND: Right.

BAILEY: You might be able to get a really good deal at some school and be miserable there. And that’s when a really good deal doesn’t mean a whole lot. I think it’s more important that students very carefully and, and thoughtfully figure out what’s the best environment for them? What’s the best academic program? What school offers that? Where do they feel the most comfortable? And then, the financing will follow.

VIGELAND: Cindy Bailey is executive director of Education Finance Service at the College Board. Thanks so much for the advice.

BAILEY: Thanks, Tess.

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