12 Dec How to Compare and Accept a Financial Aid Offer
The tension is building and the excitement is palpable in many households as college acceptance letters start arriving for students who completed the FAFSA and filed for early decision/early action admissions. These notices may come electronically or via snail mail, so be sure to look for them in whatever way you communicate with the various schools. Along with those notifications of acceptance, families also receive one last piece of the financial aid puzzle – the financial aid award letter. This formalizes and puts into writing the exact amount of support each college is willing to offer your child.
Unless your student is dead-set on one specific college, or has committed to accepting an early decision offer, it is best to take some time to sit down and compare these offers side by side. Even though one college’s offer might appear to be the highest, that doesn’t always make it the best decision. Here are some things to keep in mind when comparing financial aid offers:
• Read the offers carefully: You want to understand what each offer includes. Look for words such as grant or scholarship, which means that this money will not have to be repaid if your student meets academic criteria. Wording such as work-study means your student will need to contribute a certain number of hours of work to obtain these funds. Then you must read very carefully because federal student loans are considered a form of financial aid. Anything that talks about loans – direct, subsidized, unsubsidized, or PLUS – is money that you are borrowing. It will have to be repaid down the road.
• Calculate all out-of-pocket costs: Estimate your final out-of-pocket costs to send your student to each college. Travel expenses, room and board, or living expenses might cost much more at one destination than another. The bottom line, after everything has been taken into consideration, is what matters most.
• Think long-term: You will need to understand whether these offers extend beyond the first year of attendance. Also try to think realistically about your student’s chances of graduating within the traditional four year period. If grants and scholarships run out after a specific period of time, that money will need to come out of your family’s pocket in either cash or additional loans.
After the practical matters have been considered, it is time to take the emotional component into account. This tries to balance the student’s ardent desire to attend a particular college with the financial reality of the family’s bank account. Try to come to a mutually beneficial agreement about which offer to accept. If a favored college is being demoted, it might help to contact the financial aid office to ask if anything else can be done.
Once the decision has been made, follow the instructions for accepting the offer. It is also appropriate to decline offers from non-selected schools so they can free the funds for other students.