Comparing Financial Aid Awards

The joy of receiving an acceptance letter is often followed by the confusion of trying to evaluate financial aid awards.  Financial aid award notifications are not standardized so comparing the award from one school to another can be very confusing.  Here are some tips to help make that comparison easier.

1.  Determine the Cost of Attendance

The cost to attend a school includes both direct and indirect expenses.  Direct expenses include tuition, fees, room and board and are typically good estimates of actual costs.  Indirect expenses include books, travel and personal expenses and vary by student.  When comparing awards, focus on the direct costs.  Some schools will lists these costs on the award letter, but for others it may be necessary to visit their website to gather the information.

2.  Total the Grants, Scholarships and Waivers

These are funds that do not have to be repaid and reduce the amount of money the student and family will have to come up with.  Once these funds have been subtracted from the direct costs, it is possible to truly see how one school compares to another.  Remember that it is not the original cost of attendance that matters; it is how much remains after the "free" money is taken into account.

3.  Understand the Loans Offered

Most awards will include loans and sometimes use the abbreviation of "LN", so don't be fooled.  Not all loans are same.  If the student decides it is necessary to borrow loans, Federal Perkins Loans and Federal Direct Stafford Loans have the best terms and repayment options.  Before borrowing any loans, be sure to thoroughly research the options.

4.  Ask How Private Scholarships Will Be Treated

Private scholarships are a great way to pay the remaining balance or reduce loan debt.  However, not all schools treat the receipt of private scholarships in the same way.  Ask schools what will happen if the student receives private scholarships.  If an adjustment to the financial aid award is required, ask that loans or work study be reduced instead of grant funds.

5.  Still Have Questions?

If any questions remain, and they do for many students and families, contact the financial aid office.  They are there to help!  If the financial aid award is insufficient or family circumstances have changed it is particularly important that the financial aid office be contacted.  The financial aid office can also provide families with other financing options, such as tuition payment plans. 

In closing... remember that we at FAME are also here to help!  Our "Comparing Financial Aid Award Worksheet" is a great tool to help compare financial aid awards.  We can be reached at 1-800-228-3734.