The joy of gaining admission into the school of your choice is often tempered by the financial reality that comes with receiving your financial aid award letter. The intended purpose of this letter is to tell you how much financial aid you’ll be receiving and how much you’ll be expected to pay yourself. The problem is, not only are these award letters often confusing, but a surprising number of them actually underestimate the real costs of attendance. Some expenses are left out entirely. Incorrectly interpreting a college award letter could be the difference of thousands of dollars.
Why are they so confusing?
The best case scenario is that a lack of fundamental standardization leaves everything up to the individual schools, making helpful resources on the subject harder to come by. Annoying. But, not malicious. The worst case scenario is that schools are actively trying to confuse students and their families in an attempt to get more money out of their misunderstanding. Confusing grant aid with loan aid and can have major repercussions down the line. We’d like to give you hand as best we can navigating your financial aid award letter.
Firstly, there are two types of costs you’ll need to worry about: Direct Costs such as tuition and room and board are what you’ll find on the award letter. Indirect Costs like creature comforts, transportation and various other things are conspicuously absent, or may be grouped into a nebulous miscellaneous category. This is one of the issues that can be attributed to lack of standardization. There’s no clear guideline for itemizing expenses so schools can present them any way they want.
Are you getting gift aid or self-help aid? One is more helpful than the other. Gift aid means grants, whereas self-help aid means work-study programs and loans. They also may be applied to your Estimated Family Contribution differently. Unfortunately they are all lumped together instead of designated to specific separate locations on the letter. Even if a type of self-help aid is specified, the terms of that loan are likely to be left out.
Did you know that a less expensive school could actually end up costing you more than a more expensive school if its unmet percentage is higher? Unmet need is how much you’ll need to pay on top of your EFC. For example, you may need $10,000 of aid and only get $8,000, leaving $2,000 of your need unmet. This is information you’re unlikely to find on your award letter. You may think you’re getting what you need, but be sure to investigate the schools unmet need percentage and make sure you can’t get a better deal elsewhere.
You Have Options!
You don’t have to accept your award letter as is. You have the right to refuse all or even some what the school offers. You can even appeal the decision and try to get something more favorable. You don’t have to worry about it affecting your admissions status. Make the decision that’s best for you and your family.
We hope this helps you navigate your Financial Aid Award Letter. Feel free to look around the site for more helpful and interesting information!