Terry Savage: Negotiate college costs down

Terry Savage, Tribune Content Agency on

If you’re the parent of a student headed off to college in the fall (hopefully not virtually), you are about to make some big money decisions about how to pay for college — and whether the cost is worth the ultimate price.

The good news is that because of COVID-19, the balance of power has shifted dramatically this year. Colleges suddenly need to fill their student rosters. And now, parents have some financial leverage — if they use it correctly!

The secrets of how to do just that are revealed in Ron Lieber’s new bestseller, "The Price You Pay for College." Lieber, a highly acclaimed NY Times financial columnist, spent years writing this insider look at paying for college. It covers everything from the emotional decisions families confront to the realities of negotiating a better deal.

His timing is perfect. This is the month that students receive exciting acceptance letters — and then another letter detailing financial aid the school will offer. It can be a rude awakening. Some aid comes in the form of student loans, which must be repaid. There may also be offers of scholarships and grants (free money) or work/study programs.

Just understanding the offers may present a challenge, as terms are rarely standardized. Rick Castellano of Sallie Mae, the largest private student loan lender, suggests using tools like the “aid offer comparison spreadsheet” at

Filling the Gap


Inevitably there is a gap between the financial aid offer and the cost of college — a shockingly expensive gap. Parents often turn to expensive private loans, or even more expensive parent PLUS loans. Little do they realize that there’s another way to fill that gap: a little known concept called merit aid, which schools use to lower the cost of attendance for selected students.

As Lieber explains, merit aid is free money that colleges and universities have always tucked away to attract students they want to include in their student body. Good grades and good test scores may be a requirement of this offer, and financial need may not be a consideration. Merit aid should be considered a “discount” that admissions officers use to attract and build their student body, a sort of “marketing tool” suggests Lieber.

And these days, as families question the value of taking on debt for remote learning — or have their own financial difficulties because of the economy — schools are offering more “merit aid” just to fill their classes and cover their fixed costs.

Negotiating Nicely


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