College Admissions: 4
Ways to Increase Your Financial Aid Package
Monday, April 10, 2017
Cristiana Quinn, GoLocalProv College Admissions Expert
Early returns indicate
smaller financial aid packages... are you prepared?
Over
the next few weeks, many families with high school seniors will be comparing
financial aid packages. A dizzying array of terms, numbers and types of aid
will appear with no standard format from college to college. Most families
think the packages will be straightforward and easy to understand; they are
wrong.
When finaid letters do
arrive, the different kinds of aid that make up the package can be confusing.
What has to be repaid? What doesn’t have to be repaid? What are the interest
rates and terms for loans? Which items are renewable? What is the true cost
with all the fees and living expenses? Before you make your final decision,
here are some critical things you need to know:
What is the TOTAL Cost?
Families need to look closely at the total cost of each college
(tuition, room, board, fees, books, travel) to make sure that they are
comparing apples to apples. Then, subtract the amount of financial aid awarded
to determine what the out of pocket expenses will be. Allison Dean of Financial Aid Preparation Services, and a former
financial aid officer for U. Chicago, says "When students receive their
financial aid award letters, they can be very confused. I have seen some
schools that appear to be covering the entire cost, but when looked at closely,
they have actually added unguaranteed loans as a part of the package.
This is very deceiving. Also, most schools do not include fees and living
expenses on their award letters-so the overall cost looks lower than it
is."
What Has to be Repaid?
It’s not the total
amount of your award that matters. How much debt a student will graduate with
should be a key factor in your assessment. So, first separate out money which
does not have to be paid back, like grants, scholarships, merit awards and
tuition reductions. Make sure to check the terms of each portion of the package
to determine which are renewable for future years. Next, look at the work study
and loans. Remember that work study is paid to you throughout the year, not up
front. Compare the amount of aid that does not have to be repaid across all
your colleges. Then, look at the loans as a separate amount. It’s one thing to
graduate with $10,000 to $50,000 of debt. In fact, small student loans can be
good way to teach a child the value of education and have them vested in
getting good grades. However, coming out of college with $75,000 to $150,000 in
debt is a heavy burden. There are few private colleges I could say would be
worth six figures in debt, if you can attend the primary campus of your state
university without debt.
Appealing the Offer
Most families don’t
realize it, but you can appeal your financial aid offer. Colleges usually
reserve 10-15% of their financial aid pool for appeals. Call the financial aid
office at the college(s) where you need more money, and ask about their appeal
process and timeline. You will most likely need to write a letter outlining the
reasons that you are asking for more money (loss of a job, better offer at
another school, unforeseen medical expenses, loss of child support). Be ready
to provide documentation to support your case. A college will usually come back
with more money, but it will rarely be the full amount that you request.
Filling the Gaps
For many students, even after an appeal, there will be a gap
between what they can afford and what they receive in aid. This means hard
decisions, and in some cases, it can mean looking at outside loans. Make sure
to ask the financial aid office at your desired college for their
recommendations. They may have approved lenders with good interest rates on
loans. PLUS loans for parents are
one option, but second mortgages and bank loans can often have lower interest
rates. Private scholarships are another option, but be sure to check the terms
of your financial aid package before accepting outside scholarship money. You
are required to report all scholarship sources to your college, and many will
reduce your package by the amount of the outside funding. Also, keep in mind
that private scholarships are usually just for one year vs. college-based aid
which will often be renewed. Never pay for scholarship searches Fastweb is
a great free resource or ask your high school guidance office or local
library about state and local scholarship programs.
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