What is a Financial Aid Consultant
The College Financial Aid Consultant*
A relatively new and specialized area of financial services industry is the consultant who guides families through the financial aid process. First and foremost, financial aid consultants are not scholarship search services. In my opinion, the negative press these services receive is often well deserved. A financial aid consultant’s role is to guide the family through the financial aid process. If you find their primary objective is to sell products or suggest tactics that are illegal, walk away. The need and importance for a legitimate and competent financial aid specialist can be demonstrated by the phrase “financial aid perspective.” Case in point: Mrs. Brown, the financial aid administrator at a local independent college, has a reputation for doing everything possible to help students attend her school. Unfortunately, she does not have an unlimited budget and must stretch the grant money out as far as possible. Although Mrs. Brown’s sincerity is beyond reproach, there are two inherent perspective problems. First and foremost, the college, not the student, employs Mrs. Brown. Within her means, she will be accommodating, but her means may be limited and she may be dealing with hundreds, if not thousands of students. Second, despite Mrs. Brown’s dedication, will she suggest applying to other schools? To what degree will she discuss appealing the financial aid package, or will she offer suggestions that may increase financial aid eligibility, knowing that her school doesn’t have the means to meet the student’s increased need?
A financial aid consultant works for you. He or she has no vested interest in any particular school, governmental agency or lending institution. The consultant is employed to help the family receive the best financial aid package legally possible and has only one vested interest – the client. The end result may be a substantial reduction in expenses each year. This is accomplished by having a thorough understanding of the financial aid process and employing sound college financial aid planning principles. This is analogous to tax preparers suggesting tax reduction strategies to their clients. Keep in mind that most financial advisors have little or no experience with financial aid. What is also true is the fact that most college financial aid officers are not financial advisors.
A financial aid consultant needs to be a good financial advisors. In addition to a strong financial aid background, he or she should have the competence to address issues such as how to effectively pay for the portion of college costs not subsidized by financial aid. Expertise in taxation, investments, and retirement plans can be critical in recommending a cost-effective plan to fund an education. Poor choices in college funding not only will cost you more money, but also has the potential to negatively impact future financial aid. Finding a advisor with this unique blend of skills may make the difference in whether or not the student can attend his or her school of choice.
Knowledge is power. With college costs families are faced with, you need all the help you can get.
*Excerpt from College Financial Aid: How To Get Your Fair Share Written by Peter V. Laurenzo, CFP®