Decoding Financial Aid Letters

Just what does all this mumbo jumbo on my financial aid letter actually mean?

Financial aid letters do not all look the same, making it difficult to compare each school’s offer. To make sense of it all you will need to approach all of your offers similarly.  A financial aid comparison calculater would come in handy right about now!

Remember, tuition is not the only cost you will have.  What is the total cost of attendance for a year at each school?  This should include not only tuition, but also room, board (or cost to commute and a lunch meal plan), fees, personal expenses, travel to campus and home each semester, and books. Fill this in on the spreadsheet.

Subtract from total cost of attendance the parent and student contribution calculated from the FAFSA and the CSS Profile if required by the school.  This information should be on the financial aid letter you received from each college. If this information is not on the letter, we suggest calling the school for confirmation.  While the Student Aid Report that was generated from the FAFSA will have information on family contribution this number might not be accurate.  If the school also requires the CSS Profile for financial aid eligibility your family contribution will probably have been recalculated for any grants or scholarships awarded by the school.

The remainder is the total amount of eligibility for financial aid.

Next fill in the financial aid that has been awarded from each school including:

  • the total amount of academic scholarship offered by the school (funds that are not paid back)
  • the total amount of athletic scholarship offered by the school  (funds that are not paid back)
  • the total amount of institutional grant funds offered by the school (funds that are not paid back)
  • the total amount of any private scholarships that you might have been awarded (funds that are not paid back)
  • the total amount of any tuition benefits that you or your parent might be eligible for through work or other affiliation
  • the total amount of Pell grant or other federal grant funds (funds that are not paid back)
  • the total amount of any work-study (funds you earn from an on-campus job.  Monies go directly to student and student can use funds for personal expenses or student account)
  • the total amount of federal student loan offered (subsidized and unsubsidized)(funds that are paid back at a lower interest rate than you can borrow from a bank or other financial institution).  Please note that each of these loans have different policies regarding deferment of interest and interest rates.

Please note that not all schools will package a Parent Plus loans in the financial aid letter.  The spreadsheet will help you account for this (for comparison you might.  This type of borrowing is at the parents’ discretion but is not a loan that is the student’s responsibility which separates it from the other financial aid in the mix of financial aid.

If there is an amount remaining after these calculations —you will have this cost in addition to your family contribution. Most schools do not meet the total estimated financial need for every student.

Remember that financial aid eligibility may change from year to year depending on a number of items including the number of college students in your family, any change in income (parent and a significant student change).  Additionally, some Academic and Athletic Scholarships have additional requirements that students must meet for renewal.

Image Source: Simon Cunningham on Flickr.  Used with Creative Commons License


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