This week's blog will help you understand your financial aid offer by providing:
An essential breakdown of the offer letter
Advice on what to do if the initial offer letter doesn't offer enough
Tips on how to compare offer letters from different schools
Resources to find more money!
As high school seniors across the country begin to receive their college acceptance letters, another critical piece of paper (or email) will soon follow: the financial aid offer. Understanding this offer is essential for you and your family to make informed decisions about your education and financial future.
Understanding Your Financial Aid Offer
A Financial Aid Offer is a college's initial offer of assistance to cover your educational expenses for one academic year.
🔊Pay Attention - Your financial aid offer will itemize what you'll receive for the fall and spring semesters, as well as the total for the academic year. Often, it's an even split, but pay attention to any differences between the two semesters.
⏰When to Expect It - Financial aid offers typically arrive between February and May. Due to FAFSA processing delays this year, students could expect aid offers to start arriving around mid-April. But, don't wait to take action!
Your Financial Aid Package Explained
Your financial aid package can include various types of aid:
Grants and Scholarships
We love these! These are the funds you receive that you don't have to pay back. They can come from the federal government, state governments, colleges, or private sources.
💸Grants
For federal and state grants (these include the Federal Pell Grant and the Federal Supplemental Educational Opportunity Grant (FSEOG)), your eligibility is based on the information you submit through your Free Application for Federal Student Aid (FAFSA).
"To continue receiving these grants throughout your college career, you'll need to submit your FAFSA each year to confirm your ongoing eligibility."
🎓Scholarships
Merit scholarships can be granted based on how well you've done academically. To keep them, you may be required to meet specific conditions, such as maintaining a certain GPA.
Work-Study
Work-study is a program that allows you to work part-time while attending school to help earn money to pay for college. Though it is granted, it is not secured until you land a work-study position; you must apply for and obtain a suitable job on your own. Additionally, work-study funds are allocated on a yearly basis, so you'll need to verify that work-study is part of your financial aid package each year.
Loans
Loans are borrowed funds that you must pay back with interest. They can come from the federal government, private lenders, state governments, or colleges.
If your financial aid package includes loans, know what you are signing up for. Pay close attention to the interest rates and repayment terms of any loans offered.
"Don't be afraid...be responsible."
💡Tip: Ask the financial aid counselor or loan provider to explain your loan terms in detail.
Federal student loans often have lower interest rates and more flexible repayment options than private loans. You also should understand the difference between subsidized and unsubsidized loans. Subsidized loans have the interest paid by the government while you're in school or during deferment periods, while unsubsidized loans accrue interest from the time the loan is disbursed.
Check whether a Parent PLUS Loan is part of your offer. Many colleges include a Parent PLUS Loan in the award package, which can give the impression that the college has met 100% of the student's need. However, not all parents may want or even be eligible for this loan.
Determining How Much You Will REALLY Pay
Your award letter should include your college's estimated Cost of Attendance, or COA. Understanding the COA is key because it helps you figure out how much you might have to pay out of your own pocket.
The COA is going to include all the costs you can expect for the academic year, like tuition, room and board, books, supplies, and other personal expenses. Make sure your award letter reflects your actual housing plans and whether you're attending full-time or part-time, as these significantly affect your COA.
While tuition and room and board get paid directly to the college,
"The Indirect costs are what many usually overlook."
Indirect costs include books, transportation, laundry expense, and other personal items, but the college doesn't bill you for them.
Before any financial aid is considered, you’re faced with the sticker price—the total Cost of Attendance (COA) for college. But what really matters is the net price, which is the amount you will be responsible for after subtracting the grants and scholarships that don’t require repayment. This net price is your actual cost and the number that truly matters when comparing college costs.
Action Steps After Receiving Your Financial Aid Offers
Verification and Additional Documents
Stay alert to any requests for further documentation to confirm your financial aid package. Submit whatever your college's financial aid office asks for right away.
Comparing Financial Aid Offers
If you've received multiple offers, compare them side by side carefully. It is highly recommended that families go line by line through the award letters, distinguishing between "free money" (grants and scholarships) and loans. A spreadsheet can be a practical tool to keep track of offers and understand the net price for each school.
To make comparing financial aid offers straightforward, the DecidED tool stands out. It's a free tool where students can upload their financial aid award letters, and DecidED calculates the numbers, laying out the costs and aid in a format that’s easy to understand.
Negotiation and Appeals
Yes, you can negotiate your financial aid offer. If your family's financial situation has changed or if you've received a more generous offer from another school, you can contact the college's financial aid office to discuss your options. Be polite, be prepared with documentation, and be honest about your situation.
If after careful consideration, you find that your financial aid package needs adjustment, SwiftStudent and uAspire offer free guidance on writing a financial aid appeal letter:
Additional Scholarships and Grants
Don't stop looking for financial aid once you've received your package!
There are thousands of scholarships available from outside organizations. These can significantly reduce your college costs and the amount you need to borrow. If you receive outside scholarships, ask if the college will adjust your financial aid package. Some institutions reduce their aid if you secure additional funding, a practice known as displacement.
Accepting Your Financial Aid
Keep track of deadlines for accepting financial aid and making any deposits. Remember, you don't have to accept every part of your financial aid package. It's okay to decline certain parts of your package, especially loans that might overburden you financially. Accept free money (grants and scholarships) first, consider work-study opportunities, and only take out loans as needed.
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Whew, you doing okay? Navigating your college financial aid offer might seem overwhelming at first, but your confidence will come through obtaining more knowledge. Take the time to understand your offer, explore all your options, and remember that investing in your education is investing in your future. You've got this!💪🏾