DEFENDING THE FINANCIAL AID CONSULTANT

Reading between the lines

Several years ago, I encountered an article providing the following information, which was critical of finan­cial aid consultants. Although the article is no longer readily available, my first reaction was to counter it to set the record straight from a different perspective.

It is essential to realize that families can complete forms on their own. Some may even like doing so. On the other hand, they may avoid the monotony of the process and seek more personalized and confidential additional support that probes much more deeply into per­sonal finances and alternatives, which supports them in making informed decisions.

The arguments

The argument: Many of these consultants offer legitimate services. Even so, hiring a consultant is usually not a good idea.

My response: Hiring a consultant who offers legitimate services is an option in which parents pay for specialized expertise and analytical abilities that can result in a greater return on a small investment. “Usu­ally not a good idea” does not mean always. It depends on finding the best service providers that can do more than complete forms and waste valuable time.

The argument: Consultants charge a fee for advice you can get for free from high school counselors and college fi­nancial aid officers.

My response is that free advice is available for you. While free advice is abundant, there is a scarcity of personalized and in-depth analytical sup­port from those with experience and scope of knowl­edge that is not limited to the institution or agency providing it. High school and college counselors also have diverse responsibilities that limit the time they can spend with each student. They can only make recommendations and are not empow­ered to probe into a family’s financial resources and creditworthiness or make college financial decisions on their behalf.

The argument: Consultants may only get you a little. It is un­likely that a consultant can get you more financial aid than you can get yourself. Financial aid officers make decisions based on formulas, and consultants cannot change the num­bers for your family.

My response: Consultants are trying to keep formulas the same. Reputable consultants understand the for­mulas and develop strategies for finding the right bal­ance so that families can afford to pay for a college that offers a valued college degree. They should not make unfounded promises but offer a variety of op­tions about loans, scholarships, payment plans, and whether a financial aid appeal is beneficial.

The argument: Some advice could be better. Untrustworthy con­sultants might suggest moving money around or buying something expensive so it looks like you have less cash. Fi­nancial aid officers spot these tricks easily. They might reject your financial aid applications if they suspect you are discriminated against.

My response: Although I would not personally offer specific investment advice, I would refer a client to a qualified financial planner who could offer them more appropriate choices. Moving money around or buying something expensive without considering liquidity, im­pact, costs, and long-term financial planning makes little sense when parental assets are not as heav­ily factored into the FAFSA calculation. Such a strategy should not indicate what a more seasoned and objective financial aid professional should suggest.

The argument: Some consulting services are scams. Some services make misleading promises and false guar­antees to get your money and financial information.

My response: I agree. The buyer should always be aware of scams and misleading statements. That is why it is essential to know what to look for regarding the quality, experience, and reputation of the ser­vices provided.

Scam artists and opportunists can take advantage of vulnerable clients. Thus, buyers should be better informed about the many pitfalls they can encounter when seeking professional guidance. They should heed warnings about avoiding scholar­ship scams, paying a high price for the mechanical act of filling in the blanks on a financial aid form with no additional follow-up support or paying for expensive services that generate more paper and information than most families need or can handle.

The bottom line is that finding quality professional financial aid support depends on four critical factors: he level of expertise and experience of the service provider

1. he value-added services that extend beyond just completing a form

   3.The professional integrity of the service provider

   4.Fees for these services