Every Friday, we will be discussing all things financial aid – how to find, apply for, and earn dollars for college; how to know a great financial aid offer from a good (or not so good) one; and how to prepare early to finance college. This week, we honor recently accepted high school seniors attempting to decode financial aid award letters they’ve received from colleges and universities.
Financial Aid Word of the Week
Award letter (n.) A letter received after you are accepted to a college/university that spells out what is included in the financial aid package from that college. Financial aid packages often include multiple sources of financial aid (grants, loans, work study) that are intended to bridge the cost between what you have to pay out-of-pocket and the total cost of the college.
Decoding a Financial Aid Award Letter
Whether it’s called the Candidate Reply Date, Common Reply Date, or Universal Reply Date, May 1st is the designated date that many colleges and universities have agreed on as the deadline for admitted students to give notification of their enrollment decision. Less than a week from today seniors will make a final decision about where they will attend college. While it’s important to choose a college wisely based on location, size, and academic program, families should also evaluate which school would be their “financial best fit” college. Some of the letters you and your family are receiving from colleges may look very different from one another, even though you submitted the same financial information when you applied. How do you know what you’re really getting from each college?
Five Basic Questions
As you review your financial aid award letters from each college, you should be able to answer these five questions:
- What is the total cost (including housing and meals, fees, books, travel, and miscellaneous expenses) for one year at this college?
- How much grant or scholarship aid (i.e. free money, no repayment needed) did the student get?
- How much does your family have to pay for the first year? (Includes taking out a loan, working, or using savings.)
- What are the options for paying the amount your family owes? Are those options realistic for your family’s financial reality? (For example, using a Parent PLUS Loan.)
- What are your next steps? (Who should you call with questions or an appeal for more aid? What forms have to be submitted by what deadline?)
If the award letter doesn’t answer some of these questions, call the college’s financial aid office and ask to speak to a financial aid counselor directly. Never hesitate to speak with the admission and/or financial aid office at your prospective college or university.
(Questions thanks to FinancialAidLetter.com)
Financial Aid Tools
Award Letter Comparison
To help you compare financial aid awards, here are some online comparison tools that will help you evaluate the “financial best fit” college:
A loan calculator helps you understand what your monthly payments will be for each loan you’ve received, and how much you may need to make once you graduate in order to afford monthly payments.
Examples of Financial Aid Award Letters
Experts look at real financial aid award letters (from 2007-2008), “decode” them, and give them a grade for clarity. Learn what to watch for while reviewing your own financial aid award letters.
You may also want to take a few minutes to review the retention and graduation rates of your prospective colleges and universities. A lower graduation rate may indicate other challenges that exist at the college or university that would require you to ask additional questions.
What Else to Consider
What does the college/university include in the cost of attendance?
Consider tuition, fees, room and board, travel expenses, books and lab fees, and miscellaneous expenses—like pizza with friends or laundry detergent. If the award letter doesn’t budget amounts for these categories, you should add them into your personal calculations.
Does this award meet 100% of my demonstrated need?
When you filled out the FAFSA, your family received a number called the Expected Family Contribution (EFC). The EFC is the amount calculated that your family can afford to pay out of pocket for college expenses yearly. Colleges base their financial aid calculations on the EFC of each family. However, some colleges may not be able to award you enough financial aid to meet your entire “need,” or the amount between the EFC and the cost of attendance. Make sure that if the financial aid award and your EFC do not add up to the total cost of attendance (don’t forget books, travel, and miscellaneous expenses!) your family has a serious conversation about how to finance the remaining cost.
Can I renew merit scholarships?
Some colleges will award more grant money (i.e. free money) in freshman year. Before assuming that you will receive the same amount of grant aid yearly, ask the college whether you will be able to renew those awards. Be aware if the scholarship requires you to maintain a high GPA or is an enrollment or first year-only award.
What is the graduation rate of this college/university?
A college will be more expensive if you take more than four years to complete your degree (or two years for community colleges). Colleges with a higher graduation rate will be more likely to assist you in graduating on time thus reducing the amount of money you have to borrow or pay.
Have More Questions?
Call the financial aid office at your prospective college or university. You may leave us a comment here or call us: the College Readiness Initiative at DCPS at firstname.lastname@example.org.