[StatePoint] Perhaps even more nerve-wracking than waiting for your child’s college acceptance letters is learning whether they’ve been awarded financial aid. This is the piece of the puzzle that tells you how much it will really cost, and ultimately, whether a particular school is within your budget.
“Decoding award letters and comparing their terms can be a challenge,” says Angela Colatriano, chief marketing officer of College Ave Student Loans. “Just be patient and take the time to understand each offer.”
In a recent College Ave Student Loans parent survey conducted by Barnes & Noble College Insights, 42% of parents who received an aid offer letter found aspects of it confusing, and 68% agreed that terms and layout of these letters varied from school to school, making it hard to compare them.
To make better sense of financial aid award letters, follow these steps:
- Look for free money: The award letter will list whether your student is eligible for scholarships and grants (sometimes called Merit or Gift Aid). This is money you typically don’t need to pay back. Some merit aid is tied to how your child performed in high school. They worked hard for this recognition; congrats!
- Look for Federal Work-Study: Your child might be eligible for Federal Work-Study jobs. While jobs aren’t guaranteed, they can be a good opportunity to help cover educational expenses.
- Spot the loans: Schools will list any federal loans your child is eligible to receive. Helpful hint: They may be grouped with scholarship and grants. You should also take note of whether a Federal loan is subsidized or unsubsidized. Subsidized loans are more desirable, as they don’t accrue interest while your student is still enrolled, or during deferment periods.
- Calculate your net cost: To get an apples-to-apples look at the offers, determine the net direct cost of each particular school. This is calculated by subtracting offered scholarships and grants from the cost of attendance (the total cost of tuition, room, board, textbooks and fees). If applicable, you can subtract work-study aid too. It’s important to do this math, as the biggest scholarship doesn’t always amount to the lowest out-of-pocket cost.
- Play the field: Some parents have found success in appealing the financial aid package offered, especially if their financial circumstances have changed. Contact your top schools of interest and share the awards your student has been offered. Some schools will match other schools’ award packages or will offer additional funds. You should also ask about additional scholarships or grants that might be available.
- Consider other factors: Check if awards being offered are for all four years and understand what your child will need to do to continue being eligible for them, year-to-year. You should also factor in expected increases in tuition, room, board and other fees.
- Fill the gaps: If after doing the math, you find you have a financial gap to cover, you may also consider a private student loan or parent loan. Look for a lender with great rates, flexible repayment terms, and the opportunity to customize the loan to fit your family’s budget. For example, College Ave Student Loans offers tools and resources to help you along your financial road to college, along with a pre-qualification tool that offers quick answers without affecting your credit score. To learn more, visit CollegeAve.com.
While awaiting financial aid award letters and deciphering them can be confusing and stressful, the good news is that once these letters are in-hand, your family will have the tools needed to move ahead.
PHOTO SOURCE: (c) Highwaystarz-Photography / iStock via Getty Images Plus