When it comes to college, students today are more concerned about how they’ll pay the tab than how they’ll get there. recent survey university students and their families.
Higher education it already costs more than most families can afford and college costs keep rising. Tuition and fees plus room and board for a four-year private college averaged $53,430 in the 2022-2023 school year; at four-year state public colleges, it was $23,250, according to the advice of the college.
For most students and their families, which college they choose depends on the amount of financial aid offered, which is determined by each school. financial aid award letter.
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Understanding the College Financial Aid Letter
One of the first things to understand when evaluating letters of support is the formula that colleges use to work out the expected contribution of a family.
“It’s not so much what you can afford to pay, but what you can afford to finance,” said Kalman Chany, a financial aid consultant and author of The Princeton Review’s “Paying for College.”
Chany advises families to wait until all the offers are delivered and then compare. What may look like the biggest deal may not be the best, he said.
“One school may give you $5,000 more in grant aid, but their cost may be $8,000 more.”
It’s not so much what you can afford to pay, but what you can afford to finance.
Kalman Chany
financial aid counselor
Additionally, not all colleges include both direct and indirect expenses in their total “cost of attendance.”
While most schools list basic tuition and fees and room and board, some may not include “indirect expenses” such as textbooks, supplies, transportation, and any other extras. For each school, list all costs, including personal costs, before deducting grants or scholarships.
Generally, add an additional $4,000 for these indirect costs if they are not included in the aid offer, Chany said.
“You have to look at the net,” he said.
Distinguish between free and borrowed money
In most award letters, there are often multiple financial aid options, including grants, scholarships, study opportunities, and student loans.
If you’re having trouble distinguishing between gift aid and loans that will need to be repaid, look for terms like “grant,” “scholarship,” and “fellowship.” Anything else is most likely a loan.
If student loans are listed, they will be seems to decrease total cost of attendance. But the reality is that loans always need to be repaid – plus interest.
Douglas Sacha | Moment | Getty Images
Even with gift aid, there may be conditions, such as whether the grant is renewable for all four years or a minimum grade point average that must be maintained. A school that initially appears to be more generous may also offer less funding, Chany said.
Schools often end up offering more financial aid than you might need, especially in the form of loans.
In general, don’t borrow more than you absolutely have to, most experts say. Many people make the mistake of borrowing too much and struggling to pay it back.
It’s not too late to get extra college help
Even if you haven’t applied for financial aid, “it’s not too late,” said Mary Jo Terry, managing partner of Yrefa, a private student loan refinancing company.
In normal years, high school graduates miss out on billions in federal grants because they don’t fill out the Free Application for Federal Student Aid, or FAFSA. Many families mistakenly assume this will not qualify and don’t even bother signing up.
As of early March, only 42.7% of the high school class of 2023 had completed the FAFSA, according to the National College Attainment Network.
The FAFSA season for the 2023-24 academic year opened on October 1, but students who have not applied can still apply.
For families who have already filed the FAFSA but are still worried about how to make ends meet, it is also possible to modify their FAFSA form or ask the college financial aid office for additional help, especially if you have experienced a change in your financial situation, such as a loss employment or disability, Chany said.
Financial aid is determined by income information, which is not necessarily current. For example, support for the 2023–24 academic year is based on income in 2021.
If your circumstances are now different, you should notify the financial aid office with documentation.
Prepare a response with documentation showing any changes in assets, income, benefits or expenses. If the financial aid package from another comparable school was better, it’s worth documenting that in your appeal as well.
“Syrup” letters are not as effective as using a more quantitative approach, Chany advised.
“This is a business transaction,” he said. “They’re trying to meet their enrollment goals and maintain revenue.”
To that end, “play hard to get there,” he added. Don’t post a school sweatshirt on social media or make any moves that would indicate you’re going to enroll anyway.
Colleges are likely accepting appeals, Chany said, but “it’s not a buyer’s market like it was at the beginning of the pandemic.”
Supplement with private scholarships
In the meantime, click on alternative sources for merit-based aid, Terry advised. “There is so much money out there that people don’t even know is available.
According to higher education expert Mark Kantrowitz, there are more than 1.7 million private scholarships and fellowships available, often funded by foundations, corporations and other independent organizations, totaling more than $7.4 billion.
“Every 40 hours you spend applying for scholarships and grants will average $10,000,” calculated Yrefy’s Terry.
Check with your college or ask your high school guidance counselor about opportunities. You can also search on websites such as Scholarships.com and College Board.
