Comparing Financial Aid Award Letters

You got into the top three schools on your list.  Each has sent you a financial aid award. One offer looks better than the other two, but is it really?  It’s important to compare financial aid offers.  Here are 6 questions to ask: 

1. What is your Cost of Attendance (COA)? Does the college list all the costs for going to college: 1) Tuition & Fees; 2) Room & Board; 3) Books & Supplies; 4) Personal Expenses, 5) Transportation (getting to and from the campus). If the award does not include these items, search the website for the information or call the college.  
2. What is your Expect Family Contribution (EFC) number on your Student Aid Report? The amount your family is expected to pay toward college is on the student aid report generated when you filed the FAFSA (Free Application for Federal Student Aid). This number is needed for comparing financial aid awards.  If your family contribution is close to or more than the student budget, then your awards from the college are going to be based on merit, and not on the financial need you have.  
3. Is there a Gap?  You should know your family contribution from filing your FAFSA. To calculate how much financial aid you should be receiving, subtract your estimated family contribution from the total student budget (all five items from question 1).  The remainder is your estimated financial need at the college.  Is the college meeting your full need or only a portion of it?  
4. How much of your award is Free Money (grants or scholarships)? How much is money that you will not have to repay later? Are the grants or scholarships renewable for four years? What conditions exist for the renewable awards (a minimum GPA, number of credits completed, etc.)?   
5. How much is in student or parent loans?  How much of the award is parent loan?  An offer of $20,000 that is all a parent loan is not a good offer.  The parent loans should be used to help pay for the family contribution not meet your financial need.  
6. Did you compare award letters and calculate your net price? Is there something missing? Are you being offered grants, scholarships, loans and work?  Look for a good mix.  If you are not offered “work study” ask about it.  It is especially helpful for you to have a campus job to earn your personal expenses while in college.