Understanding Financial Aid Awards
Updated: Apr 8, 2019
You’ve been accepted. Can you afford to attend?
This is a very difficult decision for many families.
Financial aid awards can be tricky and confusing.
Financial need is defined as the difference between the total cost of college minus the expected family contribution, or what they think your student and family can afford to pay.
This Excel worksheet provides an excellent resource for calculations provided by Peter Van Buskirk
Why are financial awards so confusing?
There is no standard award format
Some schools don’t list all relevant costs
Some list tuition only and do not include room and board
Direct costs or billable directly by the college must include: tuition, fees, room and board.
Total Cost of Attendance should also include: books, supplies, travel, personal expenses, health care (if applicable)
Each uses different language to describe what is being offered
Many colleges do not clearly identify the students’ total financial obligations
Schools have different policies regarding the effect of outside scholarships
What to do? Call the college financial aid office and ask them to clarify. Make sure you understand all of the terms and what loans are being offered. YOU DO NOT HAVE TO ACCEPT any loan offers. That is completely up to you and depend on a thorough look at your finances.
Distinguish between types financial awards:
Scholarships and Grants (actually a discount of college costs)
Federal Pell, California Cal Grants (“free” state/Federal money to help pay for education)
Loans (Student, Parent, Federal, College offered) find out loan origination, interest rates, repayment plans
Work Study (Usually on campus paid jobs that a student can use to pay expenses) It is up to the student to pursue this opportunity
REMEMBER this is a one-year financial aid offer. Financial aid offers can change if your finances and earnings change substantially. You have to submit new financial aid forms (FAFSA, CSS:Profile) each year. Check with the college to see if this is required of merit only awards. In many cases, the first FAFSA filing is sufficient.
For MERIT aid usually described as a college scholarship or grant e.g. Presidents Scholarship, University Grant etc. Contact the school to find out:
Do grants cover all 4 years, or one-year only
At public universities, will the grant extend to cover more than 4 years of college?
Are there GPA requirements to continue receiving them?
Are there requirements associated with the grant e.g. participation in music, theater, sports, enrollment in a particular major etc.
Outside scholarships awarded by private sources can impact financial aid awards. Generally, a college will deduct the value of larger private scholarships from either loans or grants offered. Most outside scholarships, especially larger ones, are paid directly to the college. Colleges limit the amount of aid offered to the identified financial need of the student, the EFC or Expected Family Contribution. That is the amount of money they calculate you can afford to spend on a single year of college based on what you reported in the financial aid filings of the FAFSA and the CSS:Profile. In other words, a student won’t receive more financial aid than they need to pay for college.
What to do? Here’s a post defining financial aid terms: Financial Definitions Post
If you are still confused, contact me.