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Comparing Financial Aid Offers

Choosing a college is very much an individual decision and can come down to any number of factors. Some students may feel so strongly about one particular school that it becomes their dream school; they are going there no matter what, so long as they can get in. Others may find themselves choosing among several colleges that have accepted them, trying to find not only the best education, but also the best deal. If you’re in this boat, you likely have several financial aid award letters to not only decipher, but attempt to directly compare. Since each college formulates financial aid offers a little differently, this guide is meant to help you decipher them.

Cost of Attendance

This is the first number you’ll want to figure into your comparison of financial aid packages. A university’s cost of attendance is the amount they project it will cost a typical student to attend for one year. This number includes tuition and fees, room and board, textbooks and other educational materials, and finally, additional college living expenses (after all, most dorms aren’t going to supply students with shampoo, toothpaste, or 3 AM snack).

Along with this, note the expected family contribution and unmet need for each school. The expected family contribution is the portion of the college costs you can be expected to pay based on your financial aid application. It’s typically calculated based on your FAFSA and, at some private schools, the CSS Profile. At many schools, this is the minimum amount you will be left to come up with on your own. The award letter may also include your unmet financial need—the cost of attendance minus your other financial aid—which is the amount you still need to pay to meet average costs for the first year.

You should note that none of these numbers are amounts you need to pay the university up front—that consists of tuition, fees, and housing, and will be printed on a tuition statement from the school. However, the cost of attendance serves as a guideline for what you can expect to pay and a good baseline for comparing schools. It’s possible that the least expensive school may not be the one that gives the most financial aid, but the one with the lower cost of attendance.

Institutional Scholarships and Grants

This is the second most important portion of the award letter to consider, as it may vary substantially from school to school. Institutional scholarships and grants are the awards that the college, itself, is giving you. These may not be clearly marked, may be named different things in different places, and may be lumped in with federal aid or student loans, so you may want to make a list of these at each school, noting the amounts, the names, and the conditions of acceptance for each award.

Take note of the details of each award, usually laid out in an accompanying letter. Is the scholarship for one year? Two years? Four? Is there a minimum GPA you need to maintain to keep it? Do you need to participate in certain activities, take certain classes (or a certain number of classes), or meet regularly with an advisor to keep receiving the award? A college that offers a great deal of one-year aid or aid with a great number of conditions to renew may ultimately be less attractive than a college that offers a smaller annual amount in easily renewable scholarships. Finally, you’ll want to pay attention to the college’s, and the specific scholarship or grant’s, rules regarding other aid. Especially at schools that have programs designed to fill your total financial need, the amount in scholarships or grants you’re awarded could depend on the amount of other aid you receive. These are “last dollar” awards, meaning they’re designated to be the final dollars towards your unmet financial need. If your total grant and scholarship awards exceed the amount of financial need the college has calculated you to have, then these awards will be reduced. If you cannot pay your family contribution out-of-pocket, this could mean you’re still stuck with student loan debt. First dollar scholarships and grants are applied to your bill before other aid, so you don’t have to worry about grant or scholarship amounts being reduced.

Federal Aid

Each financial aid award letter will contain some amount of federal student financial aid, provided you’ve completed a FAFSA. While many schools will make it easy to distinguish, the following awards are most likely to appear: Federal Pell Grants, subsidized and unsubsidized Federal Stafford Loans, Federal Perkins Loans, Federal Work-Study, Supplemental Education Opportunity Grants. You might also see a state grant on your award letter. State aid is generally akin to federal aid. It is awarded based on a FAFSA and comes with similar requirements to keep.

Federal aid should be fairly uniform across schools. While institutions have discretion as to whether they award Perkins Loans and supplemental grants, your Pell amount, if any, should be uniform. Stafford Loan amounts may also vary, especially if you were lucky enough to receive enough aid from the university or other scholarship awards to cover your financial need.

You might also see a Federal Plus Loan on your award letter. This is not automatically awarded, but is listed by some schools as a way to cover the gap between your financial aid and your financial need or cost of attendance. Your parents will still have to apply for this loan, if they choose to, so it should effectively be treated as a suggestion, rather than a financial aid award. Plus loans carry relatively high interest rates compared to other federal loans, though they may still be a better bet than private loans.

Other Aid

You might also see any outside scholarships you’ve won on your award letter. These have to be taken into account when calculating your financial aid amount, and if you’ve been very successful winning scholarships, it’s possible these could affect the amount of aid you’re offered at each school. Before you compare financial aid awards and make a decision, make sure all schools know about other scholarships you may be receiving.

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