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Posts Tagged ‘award letter’

April 1 marks the height of decision season for colleges nationwide, a date by which high school seniors will learn whether they’ll be joining the incoming freshmen class. It is also the time of year when students can expect to receive financial aid award letters from the colleges.

 

These letters or emails spell out the details of your financial aid package, which FinAid.org describes as “a collection of different types of financial aid from multiple sources…  intended to help you fill the gap between your ability to pay (your expected family contribution or EFC) and college costs (the cost of attendance or COA).”

 

Be warned: There is no standard format for award letters, so it might be difficult for you to compare awards from different institutions to make sure you are getting the best deal. If you need assistance interpreting and comparing financial aid award letters, check out FinAid.org’s quick reference guide. It includes a discussion of net cost and out-of-pocket cost, a summary of problems and pitfalls with financial aid award letters, a list of questions to ask college financial aid administrators, and a glossary of common terms used on financial aid award letters.

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Think your financial aid award letter was confusing? You aren’t alone. This recent article from Inside Higher Ed describes how complaints that award notifications are too confusing and difficult to compare has reignited debates about whether colleges should be required to standardize such letters.

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Today is the first day of spring! Flowers are blooming, birds are singing, and financial aid award letters are showing up in the mailboxes (and email inboxes) of college-going seniors. When you get that award letter, it’s easy to jump right to the line that tells you exactly how much aid you are receiving. But don’t be fooled. All financial aid is not equal.

The most important thing to keep in mind is the bottom line: The amount you owe will depend on the cost of attendance (COA) minus the aid you are offered. If College A offers you $2,500 in aid, while University B provides $4,000, College A is still the better deal if its total COA is $1,501 less than University B.

Also be sure you know exactly what types of aid are being offered. Is it a grant (which doesn’t have to be repaid), a work-study offer (which requires time spent at a job), or a loan (which will have to be repaid), or a combination? You should also be on the lookout for aid requirements, such as maintaining a certain GPA or studying a particular subject.

Still confused? Don’t worry, you aren’t alone. Ask your school counselor for help or call the college for clarification. You can also find online articles about how to compare financial aid offers, such as this one from US News & World Report.

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Having a tough time comparing your financial aid award notifications to figure out which institution is offering you the best package? Check out Peter Van Buskirk’s hints in his column from US News & World Report.

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The Richmond Times-Dispatch published a great article today warning that college financial aid offers aren’t always as generous as they might seem at first glance.

“To accurately compare the cost of attending various schools,” the article states, “students and parents will need to take a closer look at exactly what type of aid is being offered — and on what terms.”

We couldn’t agree more. Visit the RTD website to read the full article.

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After you submit your application for financial aid, you should receive a financial aid award notification from the college, which spells out the details of your financial aid package. Some schools will notify you by mail, while others send an email. Either way, once you receive notifications from all the colleges to which you applied, it is now your job to compare these financial aid packages and figure out which offer works best for you. Remember, just because a school offers you more financial aid doesn’t mean it’s the better deal, especially if the tuition was higher to begin with or if much of the package is in the form of loans that must be repaid.

Reading financial aid award notifications can be confusing if you’re not sure what to look for. What makes it so difficult is that there is no standard format for award letters. Virtually every college writes its own award letters, so each letter has a different format and use of language, making it difficult to compare and contrast offers from various schools.

We suggest reading each notification carefully to figure out the following:

  • The total amount of financial aid you’ve received
  • The amount of aid that is scholarship or grant money (which doesn’t have to be paid back) versus the amount of aid that is loan money (which must be repaid, sometimes with interest)
  • Whether there’s still unmet need that you must cover out of pocket or with alternative sources of funding

You should also take into account whether there will be differences in transportation costs, room & board, or other fees.

If you are still having difficulty decoding your award letters, talk to a financial aid officer at the college or check out the Simple Award Letter Comparison Tool at www.finaid.org. It compares the financial aid packages from up to three colleges, calculates the net cost and out-of-pocket cost, and estimates the lifetime cost of any education loans.

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With the March 1st priority deadline for the FAFSA less than a week away, we hope most of you followed our advice and filed early. If you didn’t, it’s not too late. If you did, you should be receiving your Student Aid Report (SAR) any day now.

It’s your job to review the SAR and make sure the information you submitted was entered correctly. The SAR will also tell you whether your application is complete or if there are parts missing. If your SAR indicates that your application is incomplete, make sure you take care of that right away.

Additionally, the SAR is sent to up to ten colleges of interest you selected when you completed the FAFSA. Those schools may contact you if they have questions, need more information, or want to send you an award letter that describes the financial aid package they can offer you. Make sure you check your email carefully for any communications from colleges. Consider setting your email filter to ensure that any messages related to your financial aid situation aren’t accidentally sent to the junk folder. We hope you’ll be receiving good news soon!

Stay tuned for a future post about one of the most important parts of your Student Aid Report (SAR), your Estimated Family Contribution (EFC).

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