Contingent Financial Aid Appeals: Questions Answered

We address questions about CTAS’ new appeals service

After recently launching our new service helping families with college financial aid appeals, we received a number of questions. CTAS’ service is similar to what several existing businesses offer but is provided on contingency, with no upfront or fixed costs for the college applicants and their families. We thought it would be good to assemble the Q&A in one place for convenience, and begin with our position on the undergraduate marketplace.

Colleges are commercial entities which use large quantities of data, years of experience and pricey consultants to enroll students, fulfill their mission and maximize revenues.  They shouldn’t be blamed for behaving this way – they have payroll, bills and budgets to hit. But “admissions” is part of a business negotiation between two parties. Readers of this blog are well aware that this negotiation has been shifting in favor of the students. Most colleges today are “buyers”, in Jeff Selingo’s phrasing – and an admissions offer from a “buyer” college isn’t a “take it or leave it” acceptance letter from, say, Stanford. It should be viewed as the first step in a negotiation, where counteroffers are natural and part of the process.

Even in this favorable market, though, students and families face a tilted playing field: inexperienced, stressed and forced to make important decisions in a tight time frame. And they don’t know whether their offer is good or not. “I received a financial aid package with a $10,000 merit scholarship. Is that good given my finances and academics?” Tough question. This is where CTAS contingent aid appeals can help families assess their situation, empower them with information, and allow them to improve the award letter terms while sharing the financial risk.

Addressing some questions:

1)    Students can appeal for free – why don’t they just do it themselves?

Obviously, our contingent appeals process doesn’t prevent anyone from filing an appeal by themselves. But compare the situation to taxes: anyone can walk into a post office, get an IRS form and file for the price of a stamp, yet many use Turbotax or a CPA firm for the convenience and know-how.

Various counsellors, from high school counselors to academic coaches to Independent Educational Consultants (IECs), advise students & families and lend them their experience to help them with their college plans.  Students can write application essays, take tests and conduct their college searches with no assistance — and millions do.  Yet these advisors often deliver a lot of value. CTAS’ contingent financial aid appeals is simply an extension of what advisors do, providing convenience and expertise.

2)    Contingent appeals are perfectly within professional standards.

Such a service is permitted by the policies of the National Association for College Admission Counseling, Independent Education Consultants Association and Higher Education Consultants Association.  CTAS is not an affiliate of these organizations but we and others who support students adhere to established rules and good practice.

3)    The appeals process is strongly supported by law.  Appeals services exist and have passed law firm review.

a.     Professional Judgment decisions by colleges about aid are intentionally granted wide latitude by the Higher Education Act (section 479A), something reinforced by the Department of Education’s 2016 letter on the subject.  The ability of student to make appeals and colleges to accept them has been further strengthened significantly by Lamar Alexander’s financial aid changes enacted in 2020.  Despite these laws and guidance, we are already running into situations where colleges claim not to accept appeals letters, claims which are not supportable but which would discourage and intimidate most families acting on their own. In fact, one can make the argument that part of the mission of student-side advisors is to ensure and insist that colleges follow the law.

b.     Over the summer, JP Morgan Chase acquired a start-up focusing on financial aid, with a business line in financial aid appeals similar to our service.  That indicates JP Morgan’s legal advisors, likely a global BIGLAW firm, reviewed the business line and had no problems with it.

4)    Contingent fees upgrade how appeals services are priced today.

Assistance with appeals is already offered by many small firms. These firms charge fairly considerable fixed fees that are not reimbursable, making their services unaffordable for many families, often completely out of reach for lower income families, and a risky bet for all.  CTAS’ service aligns its incentives with families: we will review any set of award letters, provide our informed input and only gain if the appeals results in savings.  Families on net are not out any money in any situation.  If a family is in dire financial straits, we will do the work pro bono.  Moreover, CTAS has a strong interest in higher ed economics and pricing with significant research and modelling made to support students, while quite a few existing service providers are financial planners with little interest in higher ed.  Incentives and focus areas make this an improvement over the current appeals services to better support students.

NACAC’s Code of Ethics states at its outset: “We believe the effectiveness of our profession… is enhanced when we work together to advocate for students and their best interests.”  Advocating for students includes financial considerations, which as we all know ranks among the top college concerns of students & families.  Our new service is an improvement on how students are supported and welcome any readers coming to us or referring students & families to us – we think we can help them finish a more successful college career with less debt. If you feel uncomfortable, you are free not to engage, but let’s underline that this is unilateral disarmament because the colleges will keep on maximizing revenue.  And what is unsupportable is the position that one side of this commercial transaction – students – should avoid advice and just trust college enrollment offices. That’s a laughable position.

We are happy to answer further questions.  Wishing you well.

Read this post and others at our CTAS Higher Ed Business blog on Substack.