Understanding College Financial Award Letters Before They Arrive

As students begin receiving letters of acceptance to the various schools they have applied for, they will also receive aid award letters for each school. For many families, these offers can be quite confusing. A lot of the wording is tricky, and families must be able to decipher what they want to utilize and what they do not. Understanding these can also be the difference between determining whether or not a family can afford a particular school. Here are a few tips to understand how to let these offers help decide which school to choose.

Tip number 1: Not all need-based aid is free money!

The term “need-based aid” can be a bit deceiving, as this could sound like this is all free money. Some of it most definitely is free money called “gift aid.” These are the various scholarships and grants, such as the Federal Pell Grant, which do not have to be paid back. However, there is also “self-help aid.” These can certainly be advantageous for many families. However, these will need to be earned or paid back. These are items such as Stafford loans and federal work-study. It is important that a family understands each item for need-based aid and what strings could be attached to these items.

Tip number 2: retaining merit-based aid can be as challenging as earning it.

Unlike need-based aid, merit-based aid that is offered to the student does not have to be paid back. However, it is important to understand that this money will require the student to maintain certain levels of academic standing. This is important in college, but also the last semester of the student’s senior year when some students have a tendency to let their grades drop. The schools have discretion with merit-based aid so do not lose this due to academic challenges that could have been avoided.

Tip number 3: Be sure you understand the difference between sticker and net price.

If you have read previous newsletters from A+, you have likely heard an emphasis on determining the net price. The most common mistake families make is failing to review these aid award packages and determine what they will ultimately pay before crossing schools off their list. This causes families to choose schools that may not have been the most financially advantageous option. It is crucial to determine the net price of each school before making the decision.

Tip number 4: There could be wiggle room for aid award offers.

If you call a school asking to “negotiate” prices, they will usually not give you the time of day. However, if a student has better award offers, there is an opportunity to tactfully determine if a school wants a student and is willing to work with them to get the best aid award offer. The bottom line being that the aid award offers are not always the be all end all.

There is a lot to unpack in these offers, but these tips can hopefully shed some light on some of the most important items when a family reviews these. A+ is always available to be a resource to help understand what your most advantageous avenue is.