“financial Aid Award Letters: Decoding Your College Funding Package” – Update, April 2019: With acceptance letters and first awards coming in, here’s the latest look at understanding financial aid letters and unmet needs.
For students entering college, there may be no day more exciting than the day you receive your acceptance letter. It’s the culmination of years of hard work, and a call to a bright future – and you deserve to celebrate!
“financial Aid Award Letters: Decoding Your College Funding Package”
Don’t forget, however, that it’s also just the beginning. You’ve overcome the admissions hurdle, and your college plans are taking shape. This means that it is time to start researching and learning how to understand financial aid.
How To Read Your Financial Aid Award Letter
Along with these exciting acceptance letters comes a letter of financial aid: a document that outlines the cost of attending a college or university, as well as the federal, state, and school funds you have available to help pay for it. The dollar amount provided in a financial aid letter makes it a powerful piece of correspondence that has the power to make or break enrollment decisions. And it is not always easy to understand.
You’re not alone if you find a financial aid letter confusing. NPR profiles one student’s journey through 10 different shows:
This time last year, McKenna Hensley had a big question on her mind: Where would she go to college? The answer — sort of — was somewhere in my pile of financial aid offers. Each accepted school has its own letter, conditions and calculations. “It was very confusing,” the college student recalls now. One message stuck in her mind: The school had nearly $76,000 bold in the upper right corner of her display. She remembers smiling really big and thinking, “I got a lot of money!” But when she looked closely, she saw that the large number included loans. Hensley was determined not to borrow. I took the letter and added up all the costs of attendance, then subtracted the grants and scholarships and found that they were still about $30,000 short.
To help you avoid a similar situation, here are some valuable tools and tips. Check out the Department of Education blog: https://blog.ed.gov/2019/04/5-things-toknow-when-evaluating-a-financial-aid-offer/ and Offer Letter Decoder (www.myfinancialaidletter.org) from Hechinger Report – A tool that allows you to upload a PDF of your financial aid letter and then helps you see what it really says. To truly understand financial aid letters, it’s also important to take a look at a term you may not be familiar with yet, but will become very familiar: “unmet need.”
Decoding Words: What, Why And How
Although financial aid letters vary from school to school, there is one important statement that your family should constantly think about in connection with it, and that is unmet needs. Unmet need is the amount left to be paid after the financial aid is awarded. It is the amount that the student can actually pay. Here is a useful sample financial aid letter from Kiplinger:
In this example, unmet needs require some calculations. The cost of attendance (COA) is $38,250, and the expected household contribution (EFC) is $4,500. The EFC can be combined with grants and scholarships—the best types of awards that may be accepted—as well as a federal work study for a total of $19,926 in financial aid.
But, like the letter McKenna received telling her she had $76,000 covered, this one is intentionally vague. At the bottom of the letter it appears that the total awards are $38,250 – enough to cover the full tuition fee. But when you take a closer look, you’ll see why this amount misleads: $19,926 of grants and scholarships need not be repaid, but all loans must be repaid. This means that there is more than $13,000 in unmet need – money that you will have to borrow and pay back.
Unfortunately, the award letter doesn’t separate these options, so without careful reading and understanding, you and your family could easily find yourselves on the hook for thousands of dollars in loans.
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Reading your financial aid letter and knowing your unmet need puts you in a much better position when it comes time to fill out your FAFSA and search for scholarships.
Reduce the confusion surrounding your family’s unmet needs. Once you learn the decoding offers, you can compare financial aid letters from each school of interest to determine how much each one really costs. Understanding financial aid — and knowing what you and your parents can contribute — will help the whole family.
Develop a plan of attack. Most schools do not have the funds to cover the financial needs of every enrolled student. Rather than being caught off guard by an unmet need, you’ll be prepared to discuss the different ways you can pay for the remainder of your tuition – including the “free money” benefit, such as grants and scholarships. You’ll notice in the sample letter above that special scholarships – such as those available at the Student Center – are not included, and can go a long way toward reducing unmet need.
Additionally, if your dream school is not doing well financially, you may want to appeal your offer. CollegeUp.org has a helpful blog post on how to write a financial appeal letter.
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Prevent slips on the road. Seeking and discussing financial aid reduces stress over unmet needs once it’s actual time to cut the checks. It will also lay the foundation for future planning. After all, unmet needs don’t end after one conversation; The financial aid package covers one academic year only. There is no guarantee that the amount of unmet need will be the same year after year, but it is helpful to know this early in your college career.
Paying for college is one of the biggest investments you’ll make, so you can’t afford to be clueless. But with preparation, understanding, and planning, the excitement of college admissions day won’t have to wane because of money.
Check out the student-friendly Scholarship America website to find other scholarships that may be suitable and that can be paired with your Family of Freedom Scholarship. Scholarships vary widely. For example, scholarships for pediatric cancer survivors or those with chronic inflammatory diseases include; scholarships for a variety of disciplines; And scholarships for students in different states or regions of the country. Visit www.scholarshipamerica.org to learn more. You come home from school one afternoon, open the mailbox in your apartment building in western Massachusetts, and pull out a thick envelope. Heart racing and hands trembling, you tear open the envelope of your favorite school – Merrimack College – and read the first line, “Congratulations and welcome…”
Last week, you were accepted to Pace University and your local public university, Fitchburg State. You call your mom right away and celebrate on the phone. It’s an exciting moment and a testament to all your hard work, and your mom’s hard work as a single parent.
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Now a new waiting game begins. You need to know the cost of each option. You know college is an investment in your future, but how much investment can you afford? Cost is the primary factor that you and your mom will use to decide where to go to college next year.
Two weeks later, you receive your first financial aid package, from Fitchburg State. You scan the information and confusion creeps in. Looking for the bottom line: How much does this cost? It doesn’t seem to say anywhere. As you go through the list of financial aid “awards”, you notice that there are two loans. The loan doesn’t feel like a reward at all.
The good news is that you’ve received four grants, which are money your guidance counselor tells you you won’t need to take back. But there are some terms you’ve never seen before. What exactly are “Federal SEOG,” “Tuition Waiver,” and “Federal Work Study”? Obviously, you’ll have to do a little more research to find out exactly how much you’ll need to budget for Fitchburg. The first step would be to try to track down the cost of that. Then maybe your advisor can help you figure out what you’ll need to pay or borrow. Maybe she can explain all those other things listed.
Three days later, you receive a financial aid package from Merrimack. It looks very different from the one I received from Fitchburg, which makes it hard to compare the two. Your heart rises to see that you have been awarded a great scholarship.
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As you scroll through the message, your heart sinks. Merrimack is expensive. Tuition, fees, and room and board alone is over $53,000 USD. After subtracting all the aid, some of it loans, it looks like there would still be $19,955 left to cover. Merrimack lists various ways to pay the remainder, but the terms listed are unfamiliar. Merrimack states that you can earn $1,500 in a Federal Work Study or Merrimack Work. This assistance can help you cover a small portion of your costs, but it is not clear whether you qualify and whether it is just one or two jobs.
After a few days, you receive
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