Interpreting financial offers
It’s now the time of year when many high school seniors are hearing back from colleges and universities about whether or not they’ve been accepted. They’re also receiving financial aid offers from schools and beginning to make final decisions about where they want to attend college. It’s an exciting time.
One of the biggest challenges for families at this time of year is interpreting what these offer letters mean. Every college has its own unique way of presenting financial aid offers, and these can range anywhere from very straightforward to very confusing.
To help you in your decision making, especially around finances, I suggest creating a spreadsheet (I have developed a template that I use with clients) that enables you to do side-by-side, apples-to-apples comparisons between schools. In the spreadsheet I recommend including all the costs associated with attending that school: not only tuition, but also room and board, books and supplies, transportation to and from school (including vacations), parking, and other miscellaneous expenses.
Then I recommend plugging in any grants you’ve been offered, separating need-based aid, merit-based grants, other scholarships (including those from outside the college or university), subsidized student loans, unsubsidized student loans, parent loans, and your family’s estimated contribution into different categories. It’s very important to understand which forms of “aid” are free money and which ones are not.
Some colleges are, in my opinion, sneaky about how they calculate “aid.” They’ll sometimes hide student loans among grants and scholarships you’ve received. This is significant because grants and scholarships don’t need to be repaid, whereas loans do. Often the offer letter will make it appear that your costs add up to $0, but this is incredibly misleading if you and your parents are responsible for $40,000 in loans each year for four years.
Would you know what "Fed Dir Unsub" means if you saw it on an award letter from a college where you’d just been accepted? My client, Urias, didn’t. Neither did his family. That’s where I, as his college counselor, was able to step in and explain.
If a line on your offer letter is unclear or confusing to you, or if you’re having trouble figuring out how much it’s going to cost for room, board, and other expenses, I strongly recommend calling the admissions office or financial aid office for clarification before you send in a deposit. Since attending college is such a huge life decision and financial commitment, it’s very important to make an informed decision. Being able to do a side-by-side comparison of offers between peer schools also may set you up to make a compelling appeal.
If you’d like to learn more about navigating offers from competing colleges, schedule your free consultation today!
