After coming back from a fantastic training with uAspire on award letter review, now is the perfect time to share some of what I learned or was reminded of. As I receive copies of my students' award letters, I continue to be astonished by how complex and confusing these letters can be, especially for those not familiar with the financial aid jargon. It is disappointing that some schools continue to take advantage of the students and families by presenting their packages in very deceiving formats leading families to believe some colleges are more affordable than they actually are. An important part of the work I do with my families is helping them decipher these letters and make an informed college decision.
Award letters arrive sometime after the student has been accepted and completed the financial aid information such as the FAFSA and/or CSS Profile. Each school has their own timeline for when they send out financial aid information and it can arrive any time up until the May 1 decision day. Although we still refer to it as a 'letter' it is now usually an email or web page the student can access within their college portal.
First off, it is crucial that you understand which types of expenses you will incur and what the different types of aid are. Total cost of attendance should be broken down into several categories such as tuition & fees, room & board, and books & transportation. The tuition & fees and room & board are Direct Costs which are paid directly to the college. The other expenses are Indirect and can vary significantly depending on which classes the student takes, what activities they participate in, where they purchase their materials, and how and when the student will be traveling between home and college. The Indirect Costs are more controllable by the student.
Financial aid can be broken down into two distinctive categories – Gift Aid which consists of grants & scholarships and Self-Help which consists of loans, family contribution, and work study. Unfortunately, colleges often bundle the Self-Help into their financial aid package which leads families to believe they will be paying less. However, the loans and work study are entirely on the student and family to take care of. It is important to know that a Direct Parent Loan also known as Federal Parent Plus Loan is something which is not guaranteed and often has borrowing terms less favorable to other loans such as the federal student loans, yet colleges almost always include it as part of their package. Work study is also not guaranteed and students have to find a qualified job on campus and work to earn that money.
So when reviewing your financial aid packages, be sure to calculate your true total cost of attendance by adding all direct and indirect expenses and subtracting grants and scholarships from that total. Do not include loans, work study, parent contribution or anything else listed on the award letter which will require payment from you. This final number will be the amount you will need to fund yourself whether it is via federal loans, private loans, work study, or finding additional scholarships. If you feel that the financial aid office made an error in calculating your aid, your financial situation has changed or another school has made a more competitive offer, you can always consider appealing.
Be sure to weigh your college and finance options carefully before making a final decision. If the letters are not clear to you, do not hesitate to call the financial aid office and ask for clarification. In the end, you may need to ask yourself some difficult questions such as if a certain school is worth that high final price tag or if you would prefer to save that extra money for attending grad school later. Make use of some of the free online calculators to get a better idea of what your monthly loan payments would be. Remember to look into the terms of each loan such as if it is subsidized or not, when the repayment begins, if repayment plans are income based, what the interest rates and loan fees are, and if payment can be deferred. Whatever you decide, ensure you are making a financially safe decision.
For a breakdown of some of the financial aid terms, check out my previous post here: https://www.acmcollegeconsulting.com/blog/2018/10/22/all-about-the-fafsa
If you still have not filed the FAFSA, do it NOW: https://studentaid.ed.gov/sa/fafsa
If your school has requested additional financial aid forms or verification, be sure to complete them as soon as possible to ensure you receive the highest amount of aid possible. Remember, some aid is given on a first come, first serve basis.