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Thursday, April 7, 2016

Interpreting the College Award Letter

Filing the FAFSA Leads to Financial Letters
It's that time of year! High school seniors have their admission decisions and are now weighing the pros and cons of their college choices. Over the next few weeks, many will re-visit their top colleges and parents will take a close look at the costs associated with each choice. Financial award letters should help in calculating costs, but unfortunately they often cause more confusion than clarity. Here are my tips for reviewing award letters:

  • Compare apples to apples: Look at the tuition, mandatory fees and room and board costs (if applicable) for each college. These may not be listed on the award letter and you may have to dig around on the website or contact the financial aid office of each college. If the award letter lists things like transportation, books and personal expenses, ignore those for now as they are highly variable and you will have those expenses at any college.
  • Seek out the words "scholarship" and "grant". This is the free money and you can subtract that from the total costs you calculated above. Find out if these "gifts" have any conditions- only available the first year, require maintaining a certain GPA, etc.
  • Anything that says "loan" is something that needs to be paid back. You don't need to accept the loans and can simply cross them off if you don't want them. Be aware that an unsubsidized student loan (most common type) begins accruing interest as soon as the student signs on the dotted line. While they don't need to pay the loan back until after they graduate, that interest can add up.
  • Call the financial aid office at each college after you come up with what you think you will need to pay. Confirm your figure with theirs. This is also the perfect time to make them aware of any change in your finances or unusual circumstances. You can also ask if there are any other institutional scholarships available for the student to pursue.