High school students across the country will soon be eagerly awaiting financial aid award letters from colleges. For many aspiring college students and their parents, this is when things can start to get complicated.
College is a big expense and it’s important to have a clear understanding of the financing options to ensure students and their parents make wise decisions. According to a recent survey from College Ave Students Loans by Barnes & Noble College Insights, more than twice as many parents (69 percent) found this time — figuring out how to pay for college — more stressful than the college selection process (30 percent).
Here is help to decode one of the most important documents on the road to college — the financial aid award letter.
• Financial aid award letters can be confusing because the letters vary from school to school. There is no uniform format they must follow, so each letter can vary in how they use symbols (such as L or LN for loans) and even how they calculate the cost of college. Make sure to compare how items such as scholarships, loans and work-study are applied to the bottom line.
• Know the “net price” of college. Your letter may include the cost of attendance (COA), which is an estimate of what you can expect to pay for one year of school. Typically the COA includes tuition, fees, and room and board. To find the net price at the college, subtract the free aid, or scholarships and grants, from the COA. This net price — which sometimes can be significantly lower than the sticker price of a college — is the amount the family is expected to pay.
• Expect to pay more. Though financial aid award letters typically call out the “expected family contribution” (EFC), expect to pay more over the course of the year. According to the College Ave survey, 59 percent of parents said college was more expensive than they had anticipated. Parking, transportation home, club and organization fees, even dining out, can add to the bottom line.
• You can petition your award letter. If you felt the financial aid award letter did not accurately represent your family’s needs, you can ask the school to re-evaluate your financial aid offer (especially if your circumstances have changed). Contact the financial aid office and request they review your cost of attendance to ensure it includes other expenses (such as childcare) or changes in your ability to pay (job loss or medical costs), which may help you secure more money in grants, work-study or loans.
• Keep applying for scholarships. While some scholarship applications have many applicants, others have little competition. Be sure to apply for specialty scholarships unique to your area of educational study or even local area. Every amount helps and reduces the amount your family has to pay.
If you find you still fall short after scholarships and grants and federal loans in the student’s name, one option to consider is a private student loan. Look for a private loan with good interest rates and flexible terms that meet your family’s unique needs.
(BPT)