1. Comparing Financial Aid Packages

2. “According to student loan servicer Sallie Mae, 65% of families used grants and scholarships to pay for college in 2013, up from 50% of families five years prior. What’s more, 49% of parents say they’re not regularly setting aside money to college savings, and 70% of those parents say the reason they’re not saving is because they simply can’t afford to.”
Source

3. What happens after you submit the FAFSA?
A Student Aid Report (SAR) is sent to you
Colleges that you have been accepted to will send you:
Preliminary Aid Estimates
Financial Aid Award Letters

4. What makes up a “Financial Aid Award”?
Loans – typically make up more than ½ of the “financial aid award” and must be repaid
Grants & Scholarships – free money based on criteria of donor or financial need
Work Study/Student Employment – money you earn while going to college
Institutional Awards – free money from the college
Tuition Waivers – Tuition does not cost the student anything.
Housing Waivers – Housing does not cost the student anything.

5. Loans The amount you borrow is called the principal.
The amount you owe on the loan will be more than what you borrowed because of interest.
Example: If you borrow $15,000 at 5% and it’s four years before you begin repayment, your loan balance will rise to $18,300. That’s a 22% increase of your principal while still in school.

6. Federal Stafford Loan (now called Federal Direct Loans)
Government Subsidized or Unsubsidized Loan
Subsidized means you do not have to pay interest while in school
Unsubsidized means interest accrues while in school (amount owed at graduation will be more that the amount you borrowed)
Interest rate at 3.9% in 2015

7. Perkins Loan Need based Interest rate is 5% (as of May 2017)
Repayment begins 9 months after your get out of college
Can be subsidized or unsubsidized

8. Parent PLUS Loan Interest rate at 6.31% (2016-17)
Loan in parent’s name

9. Federal College Work Study
You must find a job on campus
Jobs offered on a first-come-first-served basis
No guarantee you’ll get a job
No guarantee of hours or amount of money offered in award package.
20 hour maximum

10. Ask for Professional Judgement Review
Professional judgement is asking the college to reconsider your aid package based on changes to your financial need.
Examples: medical bills, loss of job, or tuition expense for a sibling, divorce, death, a better offer at another school.
Could ask to change loan money for more work-study

11. Find Out the School’s Scholarship Policy
If you get additional outside scholarships, the school may reduce the scholarships that they are offering you
Some school will use outside scholarships to reduce the amount you will have to pay in loans

12. How Financial Need is Determined
Cost of Attendance (COA) $35,000
Expected Family Contribution (EFC) ,000
Financial Need $25,000
This is the amount that Financial Aid Office will try to come up with. It is what is called a Financial Aid Package

13. Good News about EFC
If you filled out the FAFSA, and you and a sibling are going to college at the same time, your Expected Family Contribution (EFC) may be cut in half!
EFC changes from year to year and it could go down as your financial situation changes

14. How to Read Your Financial Aid Award Letter
Running Time: 1:50

15. Sample Financial Aid Award Package

16. Front-loading of Grants
Some colleges offer more grants during freshman year to attract you to their college
The cost to attend my be much higher in subsequent years. Some people might consider this practice “bait and switch”

17. Which college is the best deal?
Nuview University
Ivy League University
Cost of Attendance
$20,000
$40,000
Your EFC*
$9,000
Remaining Financial Need (RFN)
$11,000
$31,000
*EFC is the same regardless of the university you choose to attend

18. Net Price Trumps Overall Cost
When you look at aid packages, look at the net cost (actual cost to you) and not the overall cost of attendance (sticker price)

19. Which college is the best deal?
Nuview University
Ivy League University
Cost of Attendance
$20,000
$40,000
Your EFC*
$9,000
Remaining Financial Need (RFN)
$11,000
$31,000
Grants
$1,500 $0
Scholarships
$4,500
$10,000
Work Study
$500
$1,000
Loans
Total Awards
$8,000

20. Online Comparison Tool

21. Worksheet

22. Additional Reading