Depending on when your teen filed his or her college applications and FAFSA, college acceptance letters may start hitting your mailbox soon (if they haven’t already). And usually right along with those come the follow-up letters that will likely have the biggest impact on the ultimate college decision – the financial aid package. While you don’t want to base college choice entirely on which school is the most affordable, it is definitely a significant factor for families facing the prospect of student loan debt in just four years.
If you’re lucky, your child will be in the fortunate position of having a few options to consider, and you made wise choices during the college selection process. But once you line up your financial aid award letters in front of you, that’s when the real decision-making work begins. Here’s what you need to know about the financial aid package:
Not all aid is created equal. Financial aid packages are composed of gift aid (scholarships and grants you don’t have to pay back), and self-help aid, which are loans and work-study aid. In other words, don’t get all excited to see that you’re getting $15,000, when a large chunk of that is money that you will have to borrow and pay back with interest, or work to earn. Grants and scholarships are what will really reduce your total cost of attendance.
It’s not set in stone. Often, the award letter you get is only a first offer. In other words, some colleges are open to negotiation and have some wiggle room in their budgets to improve aid packages to some students. It won’t always go your way, but it doesn’t hurt to reach out to the admissions office to let them know that you child is interested in attending, but you were disappointed by the aid package. If the school wants your student badly enough, they could grant an appeal, especially if your family’s finances have changed in a dramatic way since you applied (i.e. a loss of income, death in the family or health emergency).
You can negotiate your financial aid package. If your teen really wants to attend a particular school but you’re disappointed in the amount of aid offered, ask for a meeting with the financial aid officer. Of course, you’ll have more leverage if the student has a stellar academic record and/or specific talents and attributes. Have your teen be prepared to share a few selling points on what he can bring to the school – share a recent achievement or two – and mention that he’d love to attend but is considering other offers because of the financial situation. Along those lines, if there is an extenuating financial circumstance that the school is not aware of (a medical expense or recent hardship, for instance) this is the time to share it. Showing a deep interest in the school and having a little bit of luck on your side can result in a new offer.
Know which numbers count. Financial aid packages essentially include the school’s “total cost of attendance” (tuition, fees, room and board and additional estimated living expenses) and how much financial aid (both gift and self-help) you’re eligible to receive. That being said, the numbers you need to be most concerned with are the Expected Family Contribution (EFC) and Unmet Financial Need. EFC is how much you’ll be expected to contribute out-of-pocket based on your income and assets. Unmet financial need is how much of the total cost of attendance is not covered by financial aid and EFC. To make a true comparison between school offers, you’ll need these figures to calculate the “net” price of each college, which is the EFC + Self-Help Aid + Unmet Financial Need. The detailed breakdown of the net price calculation can be found on CollegeData.com.
Look beyond the bucks. If every school your student applied to was a well-thought out choice, he or she may be lucky enough to be faced with the decision between a full-ride tuition scholarship or $100,000 in student loans. It’s probably a no-brainer to go with the first option. However, if the differences between the net prices at two or more of your college choices is within a few thousand dollars, the decision will be tougher. Ultimately, you have to think beyond the sticker price to consider which schools offer the best programs and opportunities to form meaningful connections; which school best matches the student’s interests and values; and where each one is located and how that factors in.
Don’t forget to add other costs. Beyond the amount you’re expected to pay in tuition, don’t forget to consider other major expenses associated with college so you have a truer picture of what each option will cost. Will the student be going away to school? If so, how far away? What’s the typical cost to fly home for a visit? Is an in-state public university a better value? What other student fees have to be paid? You should look on the school’s website or reach out to the financial aid or admissions office to find out about other student costs.
Keep in mind that although the process is confusing, school financial aid and admissions officers usually make themselves available for any questions you have, so don’t hesitate to get in touch.