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Brian Lehrer: Brian Lehrer on WNYC. As prospective college students are weighing their decisions ahead of the May 1st deadline to let the colleges know, many are considering tuition or rather what financial aid packages their schools of choice are offering.

According to Business Insider, the average annual tuition for public four-year colleges for the 2021-2022 school year was $10,740 for in-state residents, and $27,000 plus for out-of-state residents. That's not including the over $11,000 in-room and board fees, that's public schools. The tuition for private schools average three times that much, but that doesn't necessarily have to be the final price tag. Some students might not know that they can negotiate for better financial aid.

Joining me now to discuss ways to lower the cost for tuition and how to maybe play one school off another is Ron Lieber, New York Times Your Money columnist, and author of several books including, The Price You Pay for College. Ron, thanks for coming back on. Welcome back to WNYC.

Ron Lieber: Thanks for having me. Apologies in advance for the helicopter noise in the background. I'm close enough to Sunset Park that the helicopters are overhead. Anyway, prayers to all of our neighbors.

Brian Lehrer: My apologies back for all the moving parts this morning, when you're going to be on and not going to be on and now you're going to be on. As I was just saying, there are some parents and students out there who may not have known that financial aid is something they can negotiate. First, is it negotiable for everyone or are there particular circumstances that are more favorable?

Ron Lieber: Sure. I would say, yes with a giant asterisk, and it starts here. The word negotiate is not a term that you should ever use when talking to these financial aid professionals, they are professionals, they see themselves as professionals. At private schools, colleges, and universities, in particular, they have some give baked in on the back end for people who want to request a formal adjustment, but the language we want to use here is the language of appeal. This is not a used car dealership, even though it may resemble one off.

Brian Lehrer: Right. Well, how do you go about it? Because schools have a financial aid formula that looks at a family's ability to pay tuition, that sounds like a fixed number, and the only thing you can appeal on is how they interpret your finances, but I know individual cases of families going to one college that accepted the student and didn't offer as much financial aid as another college. They said, "Well, we're getting this much here and the child would really like to go there, but we can't afford it." Can people do that that explicitly?

Ron Lieber: They can absolutely do it that explicitly. Here is one of a number of really important things that people in their 40s and 50s and 60s, in other words, parents, for the most part, have missed. The system has changed entirely from when we were going through it in the '80s or '90s. The financial aid system has now bifurcated into two different channels.

There's the old-fashioned meet base channel, where the amount of discount that you get, it's based on your income, mostly your income, but also your assets, particularly at private colleges that take a closer look at your household income statement and balance sheet. Then there's this whole separate track that's known as merit aid. Those discounts are based at least in part on academic performance and how enticing you are to the school and its institutional priorities in any given year. There are two different types of aid that you might get, two different kinds of discounts and process of appealing, not negotiating, the process of appealing is actually different for each of those two.

Brian Lehrer: Right. There are negotiations, and then there are appeals. Tell us more. What's the difference between the two?

Ron Lieber: Sure. Well, again, we want to try and banish the term negotiation from any of our communications with financial aid professionals, but here's the way to think about it. If you've got an offer of a discount, in other words, that's based on your financial need and your financial need alone, you filled out the FAFSA, you formally applied for financial aid, your household earns under roughly $250,000, $300,000 a year, and therefore, you're going to be eligible at the most expensive schools in the country, maybe not at Suny or Wreckers, you're going to get an offer.

If you feel like it's not right or not enough, you can say to the financial aid office, not the admission office, but the financial aid office, "Hey, I think there might be some mistake here. This similar school gave us more grant money, a bigger discount, and as a result, we've got a lower net price at that school, we're worried that we may have done something wrong. It's really not our application in our financial aid form. Is there any way we can check-in, and oh, by the way, there has been a change of circumstance in our family," assuming that's true? If your income is gone down, your uncontrollable expenses, like a medical crisis, if those have gone up, those are things you want to explain to the financial aid officer.

Now, if the discount you've got is based on merit on academic performance, you do the same thing, except to go to the admissions office to appeal that. If this is starting to seem really confusing, that's because it is, and it's not your fault, and the fact that the system is so complex, and it really does feel like somewhat akin to airline seat pricing, is because the schools have deliberately designed it that way.

Brian Lehrer: Should a student reach out, or should it always be the parents?

Ron Lieber: Yes. It's a tricky question. If only there was data on this, it's not as if the schools are keeping score. Many of them have told me over the years, "Yes. We get like 175 appeals a year, and 40% of them are successful, or 70% of them are successful." These batting averages these success percentages are much higher than you may think." You have nothing to lose by making an appeal. They're not going to get mad at you, or take away your aid or take away your offer of admission, the worst that can happen is they'll say no.

What we don't know, they're not keeping score on such a granular level that we know whether an appeal that comes from a teenager is more effective than an appeal that comes from a parent, nor do we know for sure whether an in-person appeal, say, showing up at admitted students day is better than a Zoom appeal or an email appeal. Some schools may have preferences about the stuff. You should check the website to see.

Brian Lehrer: According to Forbes, financial aid applications are based on two-year-old income and tax information and current asset information. I guess that plays into what you were saying before about appealing on the grounds that your family's finances may have changed. I imagine there's been a lot of that during the pandemic, which has been such a fluid and unpredictable economic time for so many families.

Ron Lieber: Yes. What a lot of people don't understand is that there are fancy algorithms programmed by PhDs spinning in the background that suck in everybody's financial data and academic data, and ZIP code data and information on whether people from your school or your community have gotten into that school, and if they have come, did they drop out or did they persist through four or five years? They know all of this stuff, and they are making discount offers, often by computer, not by human being, at least in the first pass. The appeal is sometimes, maybe even often, the first opportunity that a human being who works with the college has even seen this offer, or is ready to reckon with it in person, so that's messed up enough.

Now, you throw a pandemic in, where it hasn't been at all predictable, which kids are going to go to which places, or where they'll apply, or if they'll come, or if we'll take a year or two off. These algorithms, which were only decently predictive in the past, are much less predictive than they used to be. That's a long way of saying that the schools just don't have a great handle on what's going to happen come March and April. In March and April, if they don't have enough people saying, yes, they may be throwing more money around then to try to get people to, yes, because if they don't have enough students, it's hard for them to keep the lights on.

Brian Lehrer: That's really interesting. Enrollment rates at some places have been down during the pandemic for a variety of reasons. Right now, middle of April, colleges are scrambling to figure out what percentage of students who they've accepted are accepting them and maybe making financial aid adjustments based on that to be attractive enough to the remaining students who they accepted.

Ron Lieber: Exactly. They've all got these internal scoreboards running in the background, updating on a daily or maybe even an hourly basis, and everybody who works there knows whether they're getting not just on track towards the goal of the number of students, but also the net tuition revenue per student. In other words, the price that people will actually pay.

If they're ahead, they can afford to say no more often, and if they're behind, they might put a little bit more of a discount, in other words, a scholarship, to work. Think about it. It's like if somebody says no to you, and they're a "profitable student", if a school needs $28,000 a year to make the numbers work, and right now, they've made it all offer to you where you can come and you can pay 40, you're profitable by $12,000 a year. If you're on the fence or if they sense that you're on the fence, it makes a certain amount of sense for them to throw another $3,000 or $5,000 your way, because if you say yes, you're going to be profitable still by at least $7,000. Over the course of four years, that's six figures in revenue, that pays for a professor.

Brian Lehrer: Yes. We've got about a minute left. Here's a question from a listener via Twitter. Can students get discounts on the second, third, or fourth year? Everything we've been talking about so far, Ron, has to do with high school seniors or people in whatever circumstance applying for the first year of college. Can you go back after whatever amount of financial aid you originally get and re-appeal for your sophomore year or beyond? We've got about 30 seconds.

Ron Lieber: This tends to be a difficult thing to do. For merit aid awards, generally, they won't increase those in the second or third or fourth year, but if your family's financial circumstances change a lot, in theory at least, you should be able to qualify for more need-based aid. Now, some schools are more resource-constrained than others, and so it's a little bit of a gamble, but you have to cross your fingers and hope that they will work for you if you have a legitimately more difficult circumstance

Brian Lehrer: We leave it there for today having learned that you can negotiate, but you should never use the word negotiate per Ron Lieber, New York Times Your Money columnist and author of several books including The Price You Pay For College. Ron, thanks so much for coming on.

Ron Lieber: Thrilled to be back. Thanks for having me.

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