08 Mar How to Read Your Financial Aid Award Letters
During the spring months, every letter or email arriving for your high school senior brings potential news about their college applications. From acceptance letters to waitlists, the news will run a whole range of emotions. But, some of these letters, especially your financial aid offers, can feel confusing when they arrive. Understanding the content of the financial aid award letters can make or break your family’s ability to fund a college education. Financial decisions for college can impact you, your student, and your family for many years to come. So, make sure that you understand what you’re agreeing to. Here’s a few tips to read your financial aid award letters!
Cost of Attendance
The financial aid award letter that you receive will give you a good idea of what it costs to attend that institution. It should list an expected Cost of Attendance, or COA. The COA is what the average student incurs to attend that college or university. It often includes tuition, room and board, books, fees, and living expenses.
Actual Financial Aid Award
Beyond the COA, the letter should also state the financial aid package that the college is offering your student. Read it carefully. The document outlines grants and scholarships (which do not have to be repaid). It will also outline federal student and parent loans that will have to be repaid. You may also see federal work-study programs, where your child works a set number of hours to earn money for their education. Review these numbers and options very carefully.
Compare Financial Aid Packages
As more financial aid award letters arrive, create a budget worksheet with a column for each college, and start filling in the Cost of Attendance for each. Use the numbers provided as a start, but look at your own child and their needs to create your own numbers. This is especially true when you consider travel to/from school for holiday breaks or on weekends. Don’t forget to factor in food, too! Calculate those total costs and then enter in the information from the financial aid offer. Once you have the COA and all sources of financial aid accounted for, it’s time to do some math. Calculate the gap between your offers and needs. That gap is crucial when determining which school to attend.
Bridge the Income Gap
Although student loans are included in the financial aid package, they will need to be repaid. This cost should be figured into your calculation for potential school costs. If there is still money outstanding after financial aid is accounted for, you may need to find additional money. This can be done through 529 savings plans, income, savings or additional scholarships.
Deciding which college to attend is not just an emotional decision. Money plays a huge role in determining which college or university is the best option for your child. Understanding how to read financial aid award letters is key to making the best, most informed decision possible.
Who We Are
CFAA helps with the financial aid process, from completing the FAFSA and completing the CSS Profile to reviewing the SAR, responding to requests for verification, comparing financial aid offers and understanding student loan options. Schedule a CFAA new client free strategy session or a 15 Minute Power Chat to learn more about finding ways to pay for college. To get the latest financial aid information and college application to-do lists, look for my bi-weekly JustAskJodi emails and check out my monthly CFAA e-newsletter.
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