STATEPOINT MEDIA – Perhaps even more nerve-wracking than waiting for your child’s acceptance letters to college is knowing if they’ve received financial aid. This is the piece of the puzzle that tells you how much it will actually 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, marketing manager for College Ave Student Loans. “Be patient and take the time to understand each offer.”
In a recent survey of College Ave Student Loans parents conducted by Barnes & Noble College Insights, 42% of parents who received a letter offering help found some aspect of it confusing, and 68% agreed that the terms and layout of these letters varied from school to school, making it difficult to compare them.
To better understand financial aid award letters, follow these steps:
1. Look for free money: The award letter will indicate whether your student is eligible for scholarships and grants (sometimes called merit or gift aid). It’s money that you don’t usually need to pay back. Some merit aid is tied to your child’s performance in high school. They worked hard for this recognition; congratulations!
2. Look for federal work-study: Your child may be eligible for work-study federal jobs. Although jobs are not guaranteed, they can be a good opportunity to help cover education costs.
3. Locate loans: Schools will list all federal loans your child is eligible for. Helpful tip: they can be bundled with scholarships and grants. You should also note whether a federal loan is subsidized or not. Subsidized loans are more desirable, as they do not earn interest while your student is still enrolled or during deferment periods.
4. Calculate your net cost: To get an overview of the offerings, determine the net direct cost of each particular school. This is calculated by subtracting the scholarships and grants offered from the cost of attendance (the total cost of tuition, room, board, textbooks and fees). If necessary, you can also subtract the alternating aid. It is important to make this calculation because the biggest purse does not always correspond to the lowest cost.
5. Play on the field: Some parents have successfully applied for the financial assistance offered, especially if their financial situation has changed. Contact your best schools of interest and share the prizes that have been offered to your student. Some schools will match other schools’ award packages or offer additional funds. You should also inquire about any additional scholarships or grants that may be available.
6. Consider other factors: Check if the rewards offered are valid for all four years and understand what your child will need to do to continue to be entitled to them, year after year. You should also consider expected increases in tuition, room, board, and other fees.
7. Fill in the gaps: If after doing the math you find that you have a financial gap to cover, you can also consider a private student loan or parental loan. Look for a lender that offers attractive rates, flexible repayment terms, and the ability 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 journey to college, as well as a pre-qualification tool that offers quick answers without affecting your credit score. To learn more, visit CollegeAve.com.
While waiting for 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 to move forward.