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Banzai! You have been accepted into the school of your choice and have been awarded a financial aid package. This is certainly an exciting time, but excitement turns to confusion and frustration when you unwrap and start reading financial aid awards.
Welcome to the Annual Interpretation of Financial Aid Awards. There are some guidelines that schools should follow when creating financial aid awards, but for some reason there are no hard and fast standards for formatting. .
Unfamiliar language and cryptic code are found in many financial aid awards. Loans and grants can be lumped together. A code such as ‘L’ or ‘LN’ may be the only indicator that the amount is actually a loan. In fact, most financial aid that students receive comes in the form of student loans.
Additionally, the actual cost of attending school is often underestimated in diplomas. This can leave students constantly short of funds to pay their tuition fees. In this article, learn how to understand financial aid awards.
cost of college terms
Understanding the terminology used to describe college costs will help you better interpret the diploma and ask questions if something doesn’t seem to make sense.
Starting with “net cost”, this is the difference between the cost of attendance (all college costs) and the total financial aid award. for example:
Attendance fee
- $45,000: tuition and fees
- $15,000: room and board
- $2,000: Books and supplies
- $1,000: Transportation
- $3,500: Other
$66,500: Total
financial aid package
- $6,000: Fed Pell Grant
- $2,500: Federal Perkins L.
- $13,000: parent plus L.
- $8,000: Fed Unsub Staff
$29,500: Total
$37,000: Estimated Net Cost
From the above, net costs deduct all forms of financial assistance. Two of them are:
- Gift aid: Scholarships and grants (money that does not need to be repaid)
- Self Help: Loan and Student Job Research (money that needs to be repaid)
The formula for “net cost” is: Net Cost = Attendance Cost – (Full) Financial Assistance.
Net price deducts gift aid only. Using the example above, it would look like this:
Attendance fee
- $45,000: tuition and fees
- $15,000: room and board
- $2,000: Books and supplies
- $1,000: Transportation
- $3,500: Other
$66,500: Total
gift aid
$6,000: Total
$60,500: Estimated Net Price
The formula for “net price” is: Net Price = Attendance Fee – Gift Aid.
What is the difference between net cost and net price? Net cost can give the impression that financial assistance covers more costs than net price. This is misleading. Students must repay loans or participate in work study programs included in the net cost.
Net price can be thought of as a discounted price for college fees. This is the number that must be paid in some way.
Depending on the award letter, net cost or net price is used. Don’t let either one abandon you. Now you know what’s involved to arrive at both numbers.
“Expected Family Contribution (EFC)” is another number that may be buried in the diploma. It can be included in the net cost figure as it is the money the student has to come up with.
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Reaching the True Cost of College
No matter what the award certificate looks like, it is unlikely to indicate the true cost of college. Don’t be surprised if your school only lists tuition and fees. This could exclude $20,000 in costs when other costs are added back in.
If the school were to calculate the net price based on only two items of cost of attendance, this would be greatly underestimated. Many students are caught off-guard by this fact and realize it only months into their education.
This creates a situation where students struggle to find ways to cover the various costs associated with their education. In the worst case, some students give up and drop out.
Frontloading and Private Scholarships
Note that some colleges offer more endowments in the first year and much less after that. This is a practice called “front-loading”. Check with the Financial Aid Office for details on whether this is what the school does. You may not get a straight answer.In that case, the U.S. Department of Education college navigator can be of some help. Either way, do your best to get an answer so you can plan properly.
If you are on a private scholarship, it may adversely affect need-based financial assistance. Depending on the school, either gift aid or self-help may be reduced. Again, you should check with your school about how private scholarships affect financial aid.
How to Appeal a Financial Aid Award
I received my fat admission letter, toured the campus, bought a t-shirt, and my financial aid package fell short of my expectations. You may not have received any scholarships or grants. Student loans only. Or maybe we were expecting a lot more than what was offered.
It is important to note that successful appeals for financial aid awards are extremely rare. But that doesn’t mean you can’t try it. And the sooner you try it, the better. Here is what you need to do.
Set up an appointment with a financial aid representative
Please check the school’s financial aid website before appealing any financial aid award. Larger schools usually publish formal processes for appealing financial aid decisions. If your school has published processes, follow them. Smaller schools may not have a public process. In that case, please make a reservation by phone.
If you know your school’s policy, please contact them. It’s better to call your financial assistance contact than to email them. why? It’s easy for overworked financial aid officers to miss an email or two. A few people can serve thousands to tens of thousands of students.
When you call, request an appointment to meet with a financial aid officer. Face-to-face meetings are the best way to get your financial assistance officer to speak for you. If you are unable to meet in person, please call to confirm your prize.
While you’re on the phone, consider calling the admissions office as well. The admissions office may have information about unclaimed merit scholarships that can help you.
meeting preparation
Request a re-evaluation of the Financial Assistance Award when you meet with the Financial Assistance Officer. If you want more help, be prepared.
Here are a few things you should know before your meeting.
- How does your school calculate expected family contributions? Your university may use FAFSA’s EFC numbers or numbers calculated from CSS profiles.Either way, you need to know how much your university expects of your family
- What do you and your parents think your unmet needs are? Have specific numbers in mind.
- Gather documentation showing why you and your parents are unable to close the gap. A record of family budgets, or changes in the family (divorce, unemployment, etc.) can go a long way toward changing aid .
- Are there other better packages? A school may increase your merit aid if they know another school has offered you more money.
- Has the situation changed since you first applied? This will help you understand the changes.
things to discuss
You should be careful about how you behave during your meeting with the financial aid officer. Funders wouldn’t be comfortable calling this meeting a negotiation. You and your parents should be careful that the tone of the meeting is assertive but not confrontational. You want your financial aid officer to be your advocate and partner.
Start the meeting by saying, “For (reason 1) and (reason 2), I would like you to re-evaluate my financial aid award package.” Would you like to see documentation on these reasons?
Then take your time and listen. You should consider your financial aid representative as a partner. Financial aid officers should be able to explain what they can and cannot do. If you are an accepted student, they want to work with you. However, merit awards and subsidized loans may not be offered if you have a large number of enrollees.
If your financial aid officer is unable to offer you a grant, scholarship, or scholarship, ask them to listen to the opportunity. Remember, the financial aid officer is your advocate, not your adversary.
In most cases, the financial aid officer will not give a clear answer on financial aid adjustments at the first meeting. Ask when and how to follow up instead of asking for an immediate answer.
How to follow up
After the meeting, thank the financial aid officer and promptly follow up with the documentation they requested. Sending a thank you note by email is also a thoughtful gesture.
If you have not heard from us about your re-evaluation, please follow up with us via email and phone. Financial aid officers may not adjust your discretion, but they should tell you a definitive yes or no.
Students who do not receive adequate support from school still have options. Some schools may offer expensive private loans, but this should be a last resort. Consider these options first. You can work more while you are in school. You can choose a school with low tuition fees. You can save money by deferring registration for a semester. Finally, you can find external grants and scholarships.
If you decide to enroll in school, please keep in touch with the Financial Aid Officer. They can help you navigate tuition price increases and aid policy changes. College lasts him four years and he has to prepare for all four years.
final thoughts
Navigating financial aid awards can be difficult and confusing. They don’t make college payments easy! However, it is your own responsibility to work hard to get free money that you can pay for school.