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When it comes to college these days, students are more concerned about how they’ll pay for tab than getting in, according to a recent survey students heading to university and their families.
Higher education already costs more than most families can afford, and college fees continue to rise. Tuition and fees plus room and board for a four-year private college averaged $53,430 in the 2022–23 school year; in the state’s public four-year colleges it was $23,250, according to college council.
For most students and their families, the college they choose depends on the amount of financial aid available, which is listed in each school’s plan. financial aid award letter.
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Understanding the College Financial Aid Letter
One of the first things to understand when evaluating aid letters is the formula colleges use to determine the expected family contribution.
“It’s not so much what you can afford to pay, but what you can afford to fund,” said Kalman Chany, financial aid consultant and author of The Princeton Review’s “Paying for College.”
Chany advises families to wait until all offers are available and then compare. What may look like the biggest offer may not be the best, he said.
“A school might give you an extra $5,000, but it might cost an extra $8,000.”
It’s not so much about what you can afford to pay as what you can afford to finance.
Kalman Chany
financial aid counselor
Also, not all colleges include both direct and indirect expenses in the “total cost of attendance”.
While most schools outline tuition and basic fees, as well as room and board, some may not include “indirect expenses” such as textbooks, supplies, transportation, and any other extras. For each school, list all costs, including personal expenses, before deducting any grants or scholarships.
As a rule of thumb, add an additional $4,000 for these indirect costs if they’re not included in the aid offer, Chany said.
“You have to watch the net net,” he said.
Differentiate free money from borrowed money
In most award letters, there are often several options for financial aid, including grants, scholarships, work-study opportunities, and student loans.
If you can’t tell the difference between donations and loans that will need to be repaid, look for terms like “grant,” “bursary,” and “bursary.” Everything else is most likely a loan.
If student loans are listed, they seem to reduce the total cost of participation. But the reality is that loans still have to be repaid, plus interest.
Douglas Sasha | time | Getty Images
Even with gift aid, conditions may be attached, such as whether a grant is renewable for all four years or a minimum cumulative grade point average that must be maintained. A school that seems more generous initially might also offer less funding down the road, Chany said.
In the end, schools will often offer more financial aid than you might need, especially in the form of loans.
As a general rule, don’t borrow more than you absolutely must, say most experts. Many people make the mistake of borrowing too much and having trouble paying it back later.
It’s not too late to get more college help
Even if you haven’t applied for financial aid, “it’s not too late,” said Mary Jo Terry, managing partner at Yrefy, a private student loan refinance company.
In regular years, high school graduates miss out on billions in federal grants because they don’t complete the Free Application for Federal Student Aid, or FAFSA. Many families mistakenly assume that they won’t qualify and don’t even bother to apply.
By early March, just 42.7% of the high school class of 2023 had completed the FAFSA, according to the National College Attainment Network.
The FAFSA season for the 2023-24 academic year opened October 1, but students who have not filed can still apply.
For families who have already filed the FAFSA but are still concerned about making ends meet, it is also possible to modify their FAFSA form or seek further assistance from the college financial aid office, particularly if you have experienced a change in your financial situation, such as job loss or disability, Chany said.
Financial assistance is determined by income information which may not be current. For example, aid for the 2023-24 academic year is based on 2021 earnings.
If your situation is now different, this should be brought to the attention of the financial aid office with documentation.
Prepare a response with documentation showing any changes in assets, income, benefits, or expenses. If another comparable school’s financial aid program was better, that is also worth documenting in an appeal.
“Syrupy” letters aren’t as effective as taking a more quantitative approach, Chany advised.
“This is a business transaction,” he said. “They’re trying to meet their enrollment goals and maintain their revenue.”
To that end, “play hard to get,” he added. Do not post wearing the school sweatshirt on social media or make any move to give the indication that you will be enrolling anyway.
Colleges are likely receptive to calls, Chany said, but “it’s not a buyer’s market like it was at the start of the pandemic.”
Supplement with private scholarships
In the meantime, tap other sources to merit-based aid, Terry advised. “There’s so much money out there that people don’t even know it’s available.”
There are more than 1.7 million scholarships and private scholarships available, often funded by foundations, corporations and other independent organizations, with a total value of more than $7.4 billion, according to the expert in higher education Mark Kantrowitz.
“Every 40 hours you spend applying for scholarships and grants will earn you an average of $10,000,” Terry d’Yrefy calculated.
Check with the college or ask your high school counselor about the opportunities. You can also search for websites such as Scholarships.com and the College Council.