Several weeks ago I wrote Winning More Students, a blog post that talked about FA Consultants who promise to help “families pay less for college.”  In that particular blog I asked “What are your thoughts about families paying financial aid consultants for ‘services?’” I acknowledged that financial planners can and do help families develop and follow plans to save and pay for college. 

Part of the reason financial aid administrators become soured on companies that offer these types of services to students can be found in flyers that were recently distributed by a college planning company at a recent College Goal Sunday (CGS) event. The flyers are misleading and I find them personally offensive. The flyers invited students and parents to attend a “free” teleseminar, which was normally $79). They attacked the CGS event, claiming that student loan providers use CGS to lure new borrowers to take out high interest loans.

“The friendly student lenders lurking nearby see you as fish in a barrel to shoot at … but WITH A MACHINE GUN!!!!” the flyer screams.

“Learn how to afford a prestigious, elite private college for less than the cost of a community college,” it goes on to promise.

We’ve heard these claims before, but unfortunately these companies have become even more aggressive in their marketing tactics and claims. At some points during the day I can’t turn on the radio without hearing similar ads.   Some are even cautioning certified financial planners about advising students and parents about educational loans since most they have little training in this area (and I find myself wondering what specific training college planners have?) Advertising on the radio or in newspapers is one thing, but attempting to lure families into fee-based college planning with misleading advertising at a CGS event is repugnant.

“We’ll help you with all paperwork and how to navigate the FA process,” we as financial aid administrators say to families.  “We’ll let you know what you will qualify for and other options to finance your education… and we do that all for FREE.”

But some college planners reply, “Stop getting ripped off! Get your fair share of the money! I’ll tell you what they won’t!” (All for a fee mind you.)

Even though our message is more realistic and accurate, their message gets attention, and may be amplified more because of the recent attacks on our profession. But we shouldn’t be deterred. I encourage all NASFAA members to continue diligently serving this nation’s students and families despite these frustrating circumstances. We may not have the loudest voices, or the same marketing dollars, but it’s vital that our students and families know that applying for federal student aid is free, without cost or commitment. They must also know that our help is also available for free, and that our sole purpose is to help them find funds to meet their postsecondary educational needs.

Recently I read an article in The Chronicle for Higher Education titled “Consultants Help Families Pay Less for College.” The article states, “Professionals in college financial planning say business is booming, and the bulk of the demand for their services is coming from families with annual incomes between $ 50,000 and $ 150,000.” I kept looking for the next sentence in the article that would read, “FA administrators at colleges are always available to explain the financial aid process, help families with all paperwork, and explain financial aid awards and loans for FREE.”, but it was not to be found.

One of the sections in the article discusses “financial aid appeals.” The author of How to Pay for College Without Going Broke says that “all valid claims are paid if you push them (financial aid administrators) enough.” The article mentions how “college financial planners are also coaching families through the unspoken etiquette of appeals.”

My question to FA Consultants is basically this: What exactly is your service and how much does it cost? I worry that some families may be paying for services that are already offered for free and that in the name of “negotiating,” some might be trying to game the system that tries to deliver aid based on real financial need.

I’m also concerned about the level of expertise among FA consultants. As practicing financial aid administrators will attest, the practice of financial aid administration is much more than understanding a few Web sites and formulas. Theoretical knowledge is not the same as practical knowledge gained from years of daily application and study.

I believe there is a place for financial planners and that they can and do help some families develop and follow a plan to save for college. But I am not convinced that their services “at the point of enrolling in college” are worth the fees they charge or provide significant increases in financial aid for families than they could have received by simply going to the financial aid office first.

The New Jersey Association of Student Financial Aid Administrators won a 2004 NASFAA State Award for a project entitled “WARNING! Financial Aid Consultants - Proceed With Caution!” This project alerted FA professionals to the growing number of consultants who are using strategies that mislead families into paying fees for the promise of a larger financial aid package. The project included PowerPoint slides to be used during financial aid nights to help keep families informed about how consultants may misrepresent themselves.

What are your thoughts about families paying financial aid consultants for financial aid services? Do you think some families who are unable to pay for these services are losing out? Is financial aid negotiable? What is occurring on your campus?