Seven action steps after receiving financial aid letters
(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. 68% agreed that the 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 scholarships and grants
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 mostly has ties to your child’s performance in high school. They worked hard for this recognition; congrats!
Look for Federal Work-Study as part of financial aid
Your child might be eligible for Federal Work-Study jobs. While there may be no guarantee of securing a job, 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 scholarships 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 in school, 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. You can calculate this by subtracting scholarship and grant offerings from the cost of attendance. (The cost of attendance is 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 for the best financial aid package
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 your student’s award offerings. 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 in financial aid
Check if award offerings are for all four years. Understand what your child will need to do to continue being eligible for them, year-to-year. You should also factor in 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.
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. This includes a pre-qualification tool that offers quick answers without affecting your credit score.
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.
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