College financial aid award letters can be very confusing and, unfortunately, there is no magical elixir to cut through the confusion. A big reason why is the glaring lack of standardization with the colleges’ award letters.
While the federal government’s Financial Aid Shopping Sheet (FASS) was supposed to make comparing financial aid offers easier but, alas, many institutions opt to not use this form. And why should they? After all, they want your money and as much of it as they can get. It doesn’t benefit them to have more transparent pricing any more than it benefits phone companies, hospitals or car dealerships.
Currently, only about half of the country’s four-year colleges use the form. So, as long as we have to trudge on with the status quo, here are our suggestions to help you successfully interpret the award letters and make the best financial decision for your particular situation. And, even if all the schools are eventually required to use the FASS, we still think this advice will be applicable since you really need to custom analyze the forms for your particular situation. So let’s jump in, shall we?
Determine YOUR cost of attendance. Start with the cost of attendance listed in the financial aid award letter. Do you need to add extra expense for travel? Will your student be coming home during the semester for holiday breaks? Will the school even remain open to make staying a valid option? Do you have any other expenses that perhaps the college didn’t consider?
Deduct grants and scholarships. These constitute the “gift aid” you won’t be required to repay. Find out which are renewable, for how many years maximum and the requirements for the renewal. And get it in writing! The remaining amount will have to be covered through a combination of savings and loans.
Determine what student loans you may need. There are many different types. If you choose to repay any of them before the required payment period begins, be sure to focus on the unsubsidized ones as they are the ones accumulating interest. (Yes. Some people prepay subsidized loans if they start a good job immediately upon graduation.)
Consider working while in college. We don’t often recommend this for the freshman year so you can get your academic footing set. But there’s certainly nothing wrong with working and the experience can enhance a resume too. On a final note, there are some seasonal jobs that are perfect for college students such as counting inventory. You might be surprised by what you find if you look!
Don’t be afraid to appeal. Perhaps another college, preferably a close competitor, has extended you a more attractive financial aid award letter. Perhaps your situation has changed due to loss of employment or medical hardship. After all, the worse the school can do is say no.