By Kim Parros, Lisa Schmidt, and Liz Boyd
Good news: Award Letters are right around the corner!
An Award Letter is different from your Acceptance Letter. The Financial Aid Award Letter should contain the true cost to attend the college (room, board, tuition, books, and travel) along with loans, scholarships, and merit aid. I say “should” because they don’t always follow the same format. You may have already received your Acceptance Letter, this can be thought of as a “welcome” letter and may contain a small award to entice your interests. It is important to recognize the difference and once you receive the Financial Aid Award Letter, it’s time to double down, compare them, and budget which school is going to work best for you financially.
Award letters can be tricky because sometimes they are hard to read if you don’t know all the terms. Colleges also abbreviate, and you need to look at more than the total amount to know how much money you’re actually getting. Added to this colleges do not lay out their packages the same way so it makes comparing them difficult.
Make sure you know what your loans are, your grants, what your scholarships and work-study are. These are all very different things and not all free money. The loans you’ll have to pay back. And you’ll want to make sure you note which ones are unsubsidized vs. subsidized. (Whether they start to accrue interest while you’re in college or wait until after you’ve graduated college.) To add on, they don’t have monthly payments or interest rates listed either.
With grants and scholarships, you always want to read the fine print. What exactly is the scholarship based on, is it renewable each year and what requirements must you meet to keep it? This can be tricky since there isn’t always a consistent set of terms set up. The total amount in work-study is also not guaranteed and also isn’t an award. The work-study isn’t handed to you, it’s a job that you’ll have to actively go looking for, and then put in the hours.
“Beware of front-loading”, says Tim Parros, Parros College Planning. This is when a school gives more grants and scholarships to freshman and sophomores than they do to students later on in their college career. This means that you may have to apply for more loans later and you’ll have more to pay back. You can ask the school directly what the terms are for the money they offer you. Don’t be afraid to call admissions and financial aid at the schools you applied to. They are there to help.
At the end of the day, you can also look into outside scholarships and apply to as many of those as you can. But beware, these may not always reduce the net price of tuition. Always look at what your school’s policy is on outside scholarships. Some schools will look at these scholarships as a reason for them to reduce the grants and scholarships they give you. However, a scholarship is still money that you can use and won’t have to pay back so don’t be discouraged; just make sure you know all the rules that apply.
In addition to tuition, room and board, and mandatory fees, the school may also give you an estimate on expenses, such as books, transportation, etc. Don’t take this at face value. It will always be different for each person since their individual needs will all be varied.
This is just an overview of what you can expect from your award letters and what to do with the information. Parros College Planning is always happy to help guide you and your children through this exciting time. We take it one step further and use our own calculators to show you your COA (Cost of Attendance) based on your GPA, test scores, and other important details. We would love to show you all of the options available to you.