Financial aid consultant: Are you sure you need one?

Post By: COYD Staff

Many students have come across advertisements in the mail or e-mail from financial aid consultants. At the end of last month, we did a 6 part series on financial aid. We received several e-mails from prospective college students asking our opinion on financial aid consultants. For those of you who don’t know what they are, financial aid consultants are essentially consultants that help students and parents through the financial aid process. It could start as small as answering financial aid application questions to larger involvement like finding scholarships for their child and filling out all of their financial aid forms from start to finish.

Many parents are using a financial aid consultant’s services because, I do have to admit, the financial aid process can be a bit confusing and not entirely straightforward. However, I believe that with careful planning and research, most parents and their children can successfully navigate the financial aid process with the help of resources that are readily available for free on the web. Below are just a few of the major resources that will help tremendously in the financial aid application process.

– Federal Student Aid Information Center hotline at 1-800-433-3243.

– Sallie Mae

– FinAid

– List of other resources

In addition to the wealth of free information out there, there are 3 major CONS associated with hiring a financial aid consultant.

1. More Scrutiny.

Paid consultants are required to sign the FAFSA even if they don’t fill out the FAFSA on your behalf. Like a tax preparer who prepares your tax return, financial aid consultants are also required to sign the FAFSA. It is said that those who use a consultant are subject to more scrutiny in their financial aid application.

2. More Fees.

It’s quite hard to find a good financial aid consultant. The time it takes you to vet a consultant could instead be allocated to doing the research yourself. Some consultants charge over $300 an hour.

3. The Image.

Often colleges or universities with large endowments supplement any federal or state grants that you might receive with private grants funded by the university’s endowment. Unlike the federal or state grants, this amount is often evaluated case-by-case and qualitative factors in your application could affect the amount of aid they reward.

In this situation, there is a chance they might perceive the hiring of a financial aid consultant as a privileged service (“luxury”), one that might reduce your perceived need for financial aid.

If you still think you need a financial aid consultant, stay tuned to the next blog post where we will discuss the things to look for when selecting the right financial aid consultant.