Your student filed the FAFSA and just received the first financial aid award letter from a college. Your student may be happy as this is yet another step in the process taking them ever closer to move-in day. But before accepting admission, it's important you take a look and ensure the offered financial aid is right for your family's situation. Here are a few things to consider when reviewing your student's award letter.
1. Award letters can come in a variety of formats.
If your student receives an award letter from multiple colleges, they may not look the same. This can make comparing costs and awarded aid a bit tricky and confusing but there are ways to get an accurate comparison.
It's important to compare like costs and like awarded aid. Consider additional listed costs or aid separately. If you get confused, using a spreadsheet or table that breaks down amounts might help. ICAN has a downloadable worksheet for Comparing College Costs available at www.ICANsucceed.org/materials, as well as other materials to help you understand award packages.
2. Colleges often include the maximum available federal student and parent loans on the award letter.
If you have other means to pay, such as newly anticipated income, savings, gifts or a 529 college savings plan, you can decline the offered loans entirely or update the awarded loan amounts to a lesser value. You don't have to accept the full amount of awarded loans.
3. Loans listed on the award letter could include federal PLUS loans for parents.
These loans allow parents to supplement the student's awarded aid to better cover the cost of attendance. These loans enter repayment immediately and are entirely the responsibility of the parent — not the student. Be sure to review your student's award letter carefully and discuss loan options and responsibilities.
4. You may notice awarded aid doesn't fully cover all costs.
You have some options when it comes to covering the remaining costs. First, contact the school's financial aid office and inform them of your situation. They may be able to offer monthly payment plans or suggest other options such as private student loans.
5. When reviewing your student's award letter, keep in mind that other costs will come up during the course of your student's college career.
Award letters often do not take into consideration additional or extra costs. Other costs that may not be included in the award letter are spending money if your student chooses to attend concerts, sporting events or other activities. Organizations your student chooses to join may also come with membership fees not detailed in the award letter. So be sure you or your student have some extra money set aside for these situations.