Bad Financial Aid Package. Now What?

You hear back from every college. One or two schools give you fantastic financial aid and scholarship offers, but they aren’t your favorite colleges. Your dream college gives you a terrible, unaffordable financial aid package. You’re crushed but are committed to finding a way to attend your dream school. This is a scenario I hear every single year. What do you do?

We’re going to take a hypothetical student we’ll call Angela. Angela recently heard back from all of the colleges she applied to. She was fortunate enough to be admitted to several schools. Her first choice is New York University which she was admitted to, but they didn’t give her adequate financial aid. Other colleges she was admitted to that she’s less fond of gave her a much better aid package. So where should Angela go from here?


Angela’s family determined that they can afford about $20,000 per year to spend on her education. However, a few of the colleges she’s applied to are not so sure of that. Smith gave Angela the best financial aid package. Their financial aid office determined that her family can really only afford to pay $17,000 per year. Her financial aid package at Smith gave her the rest of the cost of attendance in grants. That means that Angela wouldn’t end up having to take on any debt and her parents wouldn’t need to take on an unreasonable burden either in the form of a structured IVA later (if you’re asking “what is an IVA” – you can find out here).

NYU, however, was not so generous. Despite Angela’s middle-class family income of $112,000 per year for 5 people, NYU determined that her family could shell out $35,000 per year in tuition. NYU costs $60,000 per year. According to them, that means Angela would need $25,000 per year in financial aid to make up for the difference between the cost of attendance and what they think her family can pay. To make matters worse, NYU only offered her $7,000 in grant aid and the other $18,000. Given that her family can only contribute $20,000 per year to Angela’s education, if she wanted to attend NYU, she’d end up needing to take out $33,000 per year in loans. So by the time Angela would have graduated from NYU, she would be saddled with $132,000 in debt for her undergraduate education. That’s way different from Smith.


Angela really wants to attend NYU Tisch. It’s been her dream since she was a little girl and she is so proud of the fact that she was admitted. NYU is everything she could want in a college. It’s located in the West Village, it’s got a fabulous academic reputation, and a great student culture. But it’s just too expensive.

Debt should be avoided at all cost (no pun intended). If you’ve got to take on a little debt, try to keep it to only what Stafford loans will enable you to borrow. This will be around $5,000 per year. Private student loans like Parent PLUS loans are a risk endeavor for a lot reasons and should be very carefully evaluated before use.

Angela knows she doesn’t want to take on more than $20,000 in debt, but she just can’t get her mind off NYU.


Angela’s first step is to appeal her financial aid package to the NYU financial aid office. At a school with NYU which is notorious for its limited financial aid, it’s highly unlikely that they’ll come through with a significantly better offer. In addition, because the gap between what Angela’s family can pay and what they college thinks they can pay is so large, it’s unlikely that any college, let alone NYU, would alter their financial aid package that dramatically. Realistically, an appeal might result in an additional $2,000 per year of grant aid.

Despite this, Angela decides to appeal her financial aid package at NYU. She figures it’s worth a shot. The college has a formal appeals process. She explained that NYU is her first choice college and explained that her family is unable to pay $35,000 per year. She conveyed this to them by requesting a review of her family’s financial situation and sending them need-based financial aid packages from other colleges like Smith that determined her family was able to pay far less.

Unsurprisingly, NYU got back to her and offered to increase her grant by $1,500. A drop in the bucket compared to the debt she’d have to take on.


Ultimately, Angela chose to commit to Smith College. Even though Smith’s a great school, it killed her to pass up her dream school, NYU. But ultimately she concluded that no undergraduate education is worth being saddled for life with $132,000 in debt. She’d end up having monthly loan payments of $1,320 for years on end. Especially considering that Angela wants to go into acting, she knew that she couldn’t necessarily find a job that with a salary high enough to pay off those loans. Smith, however, will enable Angela to graduate debt free. She won’t be imprisoned by debt collectors and loan payments the second she graduates. She’ll have the freedom and flexibility she wouldn’t have otherwise had.

Angela made the smartest decision for her family. The difference in quality of education between Smith and NYU wasn’t large enough to merit such a large financial burden. Even the difference between her state school, University of Florida, and NYU wouldn’t have warranted taking on that much debt. While it was a tough decision to make, Angela made a good one.