Evaluating a Financial Aid Offer

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Though most families don’t realize it, especially those whose first or only child is now beginning the undergraduate journey, the Financial Aid Award Letter can be highly misleading.

The award letter is merely an offer; not all aid listed will be awarded. Rather, the letter lists the aid for which you qualify. It’s up to you to review the offer and to accept or reject the aid listed.

Why can the award letter be confusing?

Schools use their own form letters and their own terminology. Understanding the offer as presented can be a pivotal point impacting your financial future not just for the next few years, but potentially for decades to come.

Before making a decision on which school’s offer to accept, as well as what aspects of the offer to accept, be sure you understand the following:

1. What will be the actual total cost, not just for the first year, but projected for the next four years? Look at the school’s project cost of attendance for the first year, then increase it by at least six percent for each subsequent year.

2. Is there free money and how much? Grants and scholarships are awards that need not be repaid. Each may have specific requirements that need be met in order to retain eligibility for the grant or award in future years.

3. What is your net out-of-pocket expense? This is the amount you will have to pay, whether from savings, retirement plans, or loans.

4. Is work-study included in the offer? While this may be included in the offer, it is not available to reduce expenses due at the beginning of an academic period. Rather, it will be paid to the student as earned, provided they can find campus employment, and usually serves as spending money.

5. Does the award include loans? Usually a letter includes a variety of loans. Loans must be repaid with interest. Some require that repayment begin immediately.

Understanding the award letter remains vital to your future, whether student or parent. Like it or not, loans have a place in funding the expense of an education. If managed properly, they are a worthwhile source of funding.

Contact us to learn more about loans as a source of funding, to learn how to manage them, and to learn how to pay them off at a much faster rate than expected (without sacrificing your standard of living).

We look forward to hearing from you!