Now that the applications are done and the acceptance letters have come in, it's time to make and informed choice about which college to attend. If you have been accepted and you have added the college to your FAFSA, you should be receiving an award letter that outlines how much the school can offer in financial aid. Every school is different in what they can offer and how they report it, so here are 5 things to consider when reviewing the Financial Aid Award Letter.
1. Your Estimated Family Contribution (EFC) - Once you have completed your FAFSA you will receive your Estimated Family Contribution. This is the dollar amount that your and your family are expected to pay based on your household income. I
2. Cost of Attendance -To know exactly how much Financial Aid you truly need you need to know how much your total cost will be. This amount is more that tuition. This generally includes tuition, room & board, fees, etc. Some colleges and universities only send out Award Letters with financial aid dollars listed, but without an itemized list of expenses. If this happens, be sure to contact the financial aid office at your college.
3. Direct Costs/Indirect Costs - Colleges and Universities will sometimes add miscellaneous expenses to your total cost. Things like travel, books, and supplies are sometimes but they are NOT paid to the university. These are indirect costs. They are likely to be things that you will need, but sometimes student can be creative in how they tackle them. For instance, if your university estimates that Travel to and from will cost 3000, but you have an Uncle who has agreed to do it for free, that's one less expense you will incur.
4. Number of Loans Offered - The estimated dollar amount might seem like a lot of money, and it may look like everything is funded, but you must look to see how many loans they have offered. Some schools offer a great deal of student loans AND a sizable parent loan. Remember -Loans must be paid back and to receive a parent PLUS Loan your parent must agree to apply for it and must be found credit worthy. If a parent cannot or does not choose to apply for it, you must still consider how you will cover your total cost without that money.
5. Work Study - If you have applied for work study and are eligible, you will sometimes find it listed with your other financial aid, but in reality that money is hypothetical. They are listing what you could make. You have to first secure the job and work. For me, it is helpful to take that amount out of consideration, so that you can truly see how much your financial aid will cover
6. Unmet Need or Gap -If your financial aid is not enough to cover your total Cost of Attendance - Direct Costs the you will have Unmet Need or a Financial Aid Gap. Students must pay that difference out-of pocket or with additional loans. Conversely, if you have additional money left over after all direct costs have been met, it will be receive to you in a refund check.
To help compare apples to apples when looking at Award Letters use a Comparison Chart. It can help you see which school is more affordable as you make your important college desicion.
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