College Financial Aid Offers

Receiving financial aid is typically a very important piece of the college financing process. A student is notified of their eligibility for financial aid funds via a Financial Aid Award Letter which is essentially a listing of the programs that the student has qualified for and the amount of specific funding available. Financial Aid Award letters are definitely not created equal even though ~ on the surface financial aid packages may appear to be similar however the specific components of a financial aid award may differ greatly between colleges! Please read on for very important information about financial aid award letters and how they should be carefully compared so students know exactly what they are eligible for and what the college is offering for financial aid!

Popular financial aid sources include grants and scholarships, student loans, and the federal work study program. The best types of financial aid are certainly gift aid sources, such as grants, scholarships, merit scholarships and restricted scholarships. Work study programs give the student the opportunity to work on campus (and sometimes off campus at approved locations) and earn money that they can use for books and other incidentals. Most financial aid award offers will include a student loan, or in some cases several student loan options. There are many federal loan programs that offer very favorable interest rates and fees as well as favorable repayment and deferment provisions. Students should review loan program details very carefully to ensure that you understand the paremeters of each loan program.

In addition to the financial aid programs listed above, colleges may include programs specfic to their college and in some cases colleges will include a Federal Parent PLUS Loan on the financial aid offer letter. This is when it is very important to carefully compare award letters carefully. The bottom line aid total is not the only metric that one should use when comparing letters. Families should look carefully at each component of the award letter. For example, let’s say that College A and College B both offer the student a total of $30,000 in financial aid sources. On quick glance, one might say that the financial aid offers are equal. However, in digging deeper, let’s take a look at two financial aid award packages, each totalling $30,000 – see example below:

College A offers a $15,000 scholarship, a $5,500 student loan, and a $9,$500 PLUS Loan which total $30,000, $15,000 of which is gift aid (does not need to be paid back) and $15,000 in loans which need to be repaid, including interest.

College B offers a $15,000 scholarship, a $5,000 Restricted Scholarship, a $5,500 student loan, a $3,000 work study allocation, and a $1,500 book award (grant). This aid package also totals $30,000 however the composition is very different. This student has only $5,500 in loans and the rest in either gift aid or work, a much more generous financial aid package.

So you get my point ~ the actual components of the financial aid package should be looked at carefully and compared with other college aid awards. Make a spreadsheet and track how much scholarship and grants each college is offering as well as the amount of work, loans, and anything else. That way you can determine the bottom line cost of college and make your decision based on your analysis. Look at the total cost of the college and subtract just the gift aid offered, that way you will be able to determine the “Net Price” of the college. Financial Aid Sense devotes a big section of the book to discussing award letters, sharing tips on comparing award letters, and sharing templates and comparison tools with families.

The following three articles contain a very informative breakdown of how to review and compare financial aid award letters. The sample award letters are a very helpful tool and help a family understand what to look for when reviewing financial aid award letters.

Award Letter Comparison is an Important Exercise

Sample Award Letter

Financial Aid Award Letter CASE STUDY

There are additional sample financial aid award letters and related award letter case studies in Financial Aid Sense. This financial aid book will prove very helpful to families who are naviating through the financial aid process. Although the guide covers topics related to the financial aid application process, financial aid programs, education loan programs, and tips on saving money, there is also a section devoted to analyzing and comparing financial aid offer letters. This information if vital for anyone needing to pay for college. For college financing information and a guide on how to compare financial aid award letters check out Financial Aid Sense!

"Financial Aid Sense"


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