How to Understand Your College Financial Aid Letter

Here are your options for college savings in a volatile market

When it comes to college these days, students are more concerned with paying for tuition than with getting in. recent survey College-coming students and their families.

higher education has exceeded the affordability of most families, and the university costs are still rising. For the 2022-2023 academic year, tuition and room and board at four-year private colleges average $53,430; at four-year in-state public colleges, it is $23,250, According to the College Board.

For most students and their families, which college they choose depends on the amount of financial aid offered, which is specified in each school’s Financial Aid Certificate.

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Understanding College Financial Aid Letters

One of the first things to understand when evaluating aid letters is the formula colleges use to calculate expected family contributions.

“It’s not so much about how much you can afford, it’s about how much you can afford,” says Kalman Chin, a financial aid consultant and author of “Paying for College” in the Princeton Review. Ni (Kalman Chany) said.

Chany advises families to wait until all offers are in place before making comparisons. What appears to be the biggest offer may not be the best, he said.

“A school might give you $5,000 more in financial aid, but they might cost you $8,000 more.”

It’s not so much about how much you can afford, but rather about how much you can afford to finance.

kalman channey

financial aid advisor

Additionally, not all colleges include both direct and indirect costs in the total “cost of attendance.”

While most schools list a baseline for tuition, fees, and room and board, some may not include “overhead costs,” such as textbooks, supplies, transportation, and any other additional costs. For each school, list all expenses, including personal expenses, before deducting grants or scholarships.

As a rule of thumb, Chany said, add an additional $4,000 if those indirect costs are not included in the aid package.

“You have to look at the web,” he said.

Differentiate between free and borrowed money

Douglas Sasha | The Moment | Getty Images

Even with gift aid, there may be conditions attached, such as whether the grant is renewable for all four years or a minimum grade point average must be maintained. A school that initially appears to be more generous may also offer less money in the future, Chany said.

In the end, schools often offer more financial aid than you may need, especially when it comes to loans.

In general, don’t borrow more than you absolutely must, most experts say. Many people make the mistake of borrowing too much money and struggle to pay it back later.

It’s not too late for more college funding

Even if you haven’t applied for financial aid, “it’s not too late,” says Mary Jo Terry, managing partner of Yrefy, a private student loan refinancing firm.

All too often, high school seniors miss out on billions of dollars in federal aid by not filling out the Free Application for Federal Student Aid (FAFSA).Many families mistakenly believe that they Not qualified Don’t even bother to apply.

As of early March, only 42.7 percent of the high school class of 2023 had completed the FAFSA, according to the National College Achievement Network.

The FAFSA season for the 2023-24 school year began on October 1, but students who have not yet submitted an application can still apply.

Families who have already filed the FAFSA but are still worried about making ends meet can also revise their FAFSA form or seek additional assistance from the college financial aid office, especially if your financial circumstances change, such as unemployment or disability, Chany said.

Financial aid is determined by income information which is not necessarily current. For example, aid for the 2023-24 school year is based on 2021 earnings.

If your current situation is different, it should be brought to the attention of the Financial Aid Office on file.

Prepare a response and attach documents showing any changes in assets, income, benefits or expenses. If another similar school has a better financial aid package, that’s worth documenting on appeal as well.

Chany suggested that the “Syrupy” letter was not as effective as a more quantitative approach.

How Families Can Apply for More College Financial Aid

“This is a business transaction,” he said. “They’re struggling to meet enrollment goals and maintain income.”

For that, “go for it,” he added. Don’t post pictures on social media in your school sweatshirt or make any sign that you’re going to enroll anyway.

Chany said colleges may be open to appeals, but “it’s not a buyer’s market like it was when the pandemic started.”

Supplementary Private Scholarships

Meanwhile, mining alternative sources Merit aid, Terry suggested. “There’s so much money out there that people don’t even know it’s available.”

There are more than 1.7 million private scholarships and grants, often funded by foundations, corporations and other independent organizations, worth more than $7.4 billion, according to higher education expert Mark Kantrowitz.

“For every 40 hours you spend applying for scholarships and grants on average, you’ll earn $10,000,” Yrefy’s Terry calculated.

Check with colleges, or ask your high school counselor about opportunities.You can also search sites such as Scholarship Network and College Board.

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