Students spend years of their lives focusing on getting into their dream college, but once they get in, families must face a brand new issue: How are they going to pay?
The National Association of Student Financial Aid Administrators analyzed research from the Lumina Foundation and found that even if low-income families saved 10 percent of their discretionary income for 10 years and students worked 10 hours a week while attending college full-time, they still couldn't afford 95 percent of colleges. Even wealthy families were unable to afford 48 percent of schools.
While many may not realize it, it is possible to negotiate for more financial aid. "The era of financial aid appeal has arrived in full," Ron Lieber writes in The New York Times, "and April is the month when much of the action happens."
Here are three steps you can take to maximize your financial aid offers:
1. Appeal FAFSA
Every year, the U.S. Department of Education gives over $120 billion in federal grants, loans and work-study funds to more than 13 million college students, making it the largest provider of student financial aidin the country. Students must fill out the Free Application for Federal Student Aid, otherwise known as the FAFSA, in order to receive their share of these funds.
Furthermore, colleges primarily use FAFSA to calculate if a student needs additional financial assistance.
Every student in America should complete the FAFSA in order to maximize their federal grants and federal student loans. "Aid is available for anyone with a household income below $250,000 a year," says Charlie Javice, founder & CEO of Frank, an online FAFSA platform. "So it's really important as FAFSA season comes up that people don't forget that there is no such thing as being too rich to file FAFSA."
But your chance to maximize your college aid package doesn't end once you've submitted your FAFSA application.
"There is an appeal process," college admissions expert Danny Ruderman tells CNBC Make It. "Once you submit the FAFSA, be sure to submit supplements or new addendums."
The Department of Education allows families to appeal because, he says, "you can fill out the FAFSA in December, and by the time that your child is going [to college] the next fall, things can change."
2. Review your college offers
The next step in your financial aid negotiation process should be assessing all of your offers. It may seem tedious, but every family should make an Excel spreadsheet detailing each school's offer and how much debt they are able and willing to take on.
"Review and evaluate each financial aid package thoroughly before deciding your course of action," Kat Cohen, CEO and Founder of college guidance company IvyWise, tells CNBC Make It. "Make sure you note the amount of aid you receive through grants and scholarships, which you will not have to pay back, versus loans, which are borrowed money that you will have to ultimately repay."
This review process should also include estimating how much your degree will be worth. A typical rule of thumb is that students should not borrow more than their expected starting salary upon graduation. For instance, if you plan to become a computer scientist or a nurse, this estimated value will be higher than if you plan to pursue a degree in dance.
Furthermore, The Fiscal Times suggests that parents only take on as much debt as they believe they can pay off within the next 10 years.
The starting salary for college graduates is about $50,359, and the average student loan borrower has $37,172 in student loans when they graduate — implying that most college graduates are actually making sound borrowing decisions.
3. Work with each school
"If you review your financial aid offer and decide to appeal for additional money, it is best to contact the financial aid office at the school with which you want to negotiate," says Cohen. "If possible, go to the school's financial aid office in person, so you can discuss your specific offer package and your current financial situation."
Cohen says that students should keep in mind that they are actually in a position of power. Schools want all accepted students to attend in order to increase what is known as "yield."
"Generally, once a school admits a student, the institution is very eager for the candidate to attend, so do not be afraid to speak candidly if the school's aid package is hindering your decision to enroll," she explains.
When negotiating with a school directly, students should be sure to clearly lay out their financial situation and highlight any developments that could impact their family's ability to pay, such as a family member facing health difficulties or a parent being laid off from their job.
Second, students can leverage offers from other institutions. If you received a particularly generous offer from a competing college, students should mention how much the other school is offering. This may lead the school to match or even surpass your biggest financial aid package.
Most of all, reiterate how excited and interested you are in attending that school, and stress that you are just doing your best to make your collegiate dreams possible.