Over the next couple of months, families will be receiving their students’ financial aid award letters.  The financial aid letters details the award amounts from the institution(s) as well as the federal government.  Understanding the different types of awards and comparing the financial aid packages from each university will enable families to make an informed decision. 

The financial aid packages are processed after a family has submitted the FAFSA, the need-based federal financial aid form, and depending on the specific college, the CSS Profile, the specific college’s need-based financial aid form. The letters from the colleges may list additional expenses for the upcoming school year as well.

Good things to note when reviewing the letters: 

• Create a cost comparison spreadsheet to compare the same type of award from each college. FREE RESOURCE: email [email protected] for a copy of a cost comparison spreadsheet.

• The award letter includes the Cost of Attendance (COA) direct costs such as tuition, room & board, and fees. If your child is living on-campus, be certain that “Room & Board’ is included in the Cost of Attendance. 

• Additionally, the award letter will include indirect costs, such as personal expenses, books, and transportation. The indirect costs are often estimated low. Families should develop realistic expense projections based on their student’s needs. For example, if the student is attending college in or near a major city, the student’s lifestyle may be more expensive. Transportation costs are also a factor, especially if the student is attending a college far from home. 

• If the student is eligible, the letter will provide the student’s need-based financial aid awards, such as grants, work-study, and/or subsidized loans.  Grants do not need to be repaid. Work study provides part-time jobs to students with financial need allowing them to earn a specific amount of money per semester. The letter will also indicate if the student has earned any non-need merit scholarships and/or unsubsidized federal student loans. Merit scholarships do not need to be repaid. All loans need to be paid back, whether it is an unsubsidized or subsidized loan. 

• Academic scholarships and loans are often combined in the same section which can cause confusion. Remember, loans need to be paid back and academic scholarships do not need to be paid back. Be sure to separate the award types on your spreadsheet. Loans are either unsubsidized loans, interest starts to accrue in college, or subsidized loans, interests start to accrue 6 months after the student leaves school.   

• When reviewing merit scholarships, which are based on the student’s academics, be certain that the letter states the scholarship is renewable all 4 years. Generally, the institution will have academic requirements to retain the scholarship. The acceptance letter should clarify the terms of the scholarships. If your student intends on transferring at some point, determine if the scholarship would need to be repaid.  If there is any ambiguity - call the college’s Financial Aid Office.

• FAFSA’s federal loans have the lowest possible interest rate available. Over a four-year period, the student can borrow $27,000 in FAFSA loans.  Families should help students understand the responsibilities of taking out loans. FREE RESOURCE: Go to studentaid.gov (valuable website!) and use the loan simulator.  Enter the relevant college costs along with the loan amount.  The simulator will calculate the monthly payments following graduation.

Fully understanding the financial aid package is a critical piece in determining the overall best fit for your student.  Take your time reviewing all the options provided from the individual colleges, and make sure all of your questions are answered before making any decisions.

Good luck and enjoy the journey! 

College 101 Admissions Consultants LLC. 

Website: www.mycollege101.com.  

Email: [email protected]. Phone: (508) 380-3845.

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