Is My College Affordable?

By Coach James   By now, seniors should be in the midst of receiving acceptance letters and financial aid offers from colleges. We call these financial aid offers “award letters.” An award letter is a notice sent by a college that details the financial aid that an accepted student will receive for their first year if they attend. An award letter should itemize what funds are available to help the student pay for their education. If a student has applied for financial aid, they should receive an award letter from each school that has accepted them. Although some colleges do still send a physical letter in the mail, nowadays many colleges provide award letters through email or online student accounts.   “So, what does all of this stuff on my award letter mean?”   What students are awarded can vary drastically by student and college, but let’s cover some basic categories:   Grants: These are gift funding that does not need to be paid back, usually given out based on a family’s need. Amounts can vary from year to year.   Scholarships: This money also does not have to be paid back. This is usually earned by a student for being exemplary in some capacity, such as academically, athletically or musically, or due to their community service. Sometimes a family’s need is also factored into the scholarship consideration. Some scholarships may only be for one year, while others may be renewable over the course of the student’s education. This can be a big distinction when considering future expenses!   Student Loans: Most loans listed on award letters are geared toward students. These awards will eventually need to be paid back. Usually students are offered the maximum loan amounts they could receive under federal law, but they can choose to reduce or decline the loans.   Parent Loans: Sometimes, colleges will list a parent loan or PLUS loan on the award letter. While not technically financial aid, parents can apply for this loan to help meet the gap in college costs. This is not guaranteed aid, as parents need to pass a credit check to qualify for this federal loan.   Work-Study: Unlike the other items listed, work-study funds are not available upfront to pay the student’s bill but instead have to be earned by the student by working a part-time job while attending college classes. The colleges set aside on-campus jobs for students in need, who can apply for the jobs and earn up to the maximum listed as work-study funds on the award letter. These jobs tend to be more flexible with their hours and have the added benefit of being on campus. Work-study funds can also vary from year to year.   Typically, we advise students to review all of their award letters before making a decision and putting down an enrollment deposit. Remember, your awards should be secure until May 1st, the national decision deadline, unless otherwise stated on your award letter. Some colleges encourage students to put down housing deposits and other down payments early, which may be beneficial, but families should research whether these will be refundable if the student decides to go to a different school.   “So how do I figure out which school gave me the best offer?”   The first step is to determine the total estimated cost of attending your prospective colleges. Some colleges may list this on the award letter, while for others, you will have to look up the cost on their websites. Be sure to include allowances for book and supplies, transportation to and around campus, and personal expenses. Then, subtract the gift aid (the aid that doesn’t have to be earned or paid back) from the total costs, and that will give you an idea of what the college actually costs for the first year.   Our CAA coaches are here to help our clients through this process. If you feel the offer you’ve received is unfair, consider appealing. Check out our previous article Award Letters Are Coming! for more information on appeals. We want to encourage all families to make good financial decisions during this process and to consider their options carefully. Congratulations for making it this far, and good luck!