It is that time of year when high school seniors are receiving their acceptance letters from colleges and universities. If the student has been accepted to more than one college or university, the big decision is which one to attend. It usually boils down to the cost of the different colleges and/or how much the family will be obligated to pay out of pocket now or in the future. Shortly after the acceptance letter is received, the financial aid offer from the college or university arrives.

Sharpen Your Pencil in Analyzing the College Aid Award Offer

Make sure the offer takes into consideration the total college cost and not the estimated cost of attendance provided by the college themselves. According to a study by the Golrick-Rab and a professor of higher education at Seton Hall University, Robert Kelchen “compared the stated cost of living estimates for each college based on data at the county level on food, health insurance, and transportation”. The study found “Colleges differed widely …….. and there was often no logic to the differences. Some colleges have twice the listed living allowance as another as few as five miles away”. Students and parents that rely on these estimated college expenses are taking a lot of risks. It is required of colleges and universities to provide these estimates but there are no set guidelines as to how these college costs are arrived at. Perhaps many colleges and universities feel the pressure to hold these cost estimates down to make it appear that their institution is more affordable and deflects the sticker shock of their college tuition rates.


Understanding the College Aid Award Letter

Award letters will list several different types of aid to defray the college cost or amount of money students and their families have to initially pay out of their pockets.



Loans are considered part of the aid package but loans need to be paid back and do not cut college expenses, it only delays it. Loans can come in a variety of choices.


  • College loanFederal loans include Stafford or Perkins loans. They allow for payments to start 6 months after graduation.
  • Subsidized or unsubsidized loans. Part of the loans can be “subsidized” meaning there is no interest accruing on the loans until six months following graduation. “Unsubsidized” federal loans allow for the interest to accrue until the payments start which is also 6 months following graduation, but increases the amount to be paid by the interest that accrues for the time period the loan is in payment delay.
  • College or university offered loans. Some colleges and universities have their own money that they will loan to you. Make sure you understand how the loan is to be paid back and the interest rate you are signing up for.
  • Private loans. There are also private loans available such as Discover that will loan up to the total cost of college.
  • PLUS loans are another source of aid. PLUS stands for Parent Loans for Undergraduate Students. These loans require payments to begin immediately. If you take out a PLUS loan one semester and each succeeding semester, you begin to pile up payment upon payment and you soon will be drowning in PLUS loan payments.

Remember, it is next to impossible to get out of Federal government loan obligations.

Make sure you understand the terms of all your loan options before deciding which ones are best for your family’s situation. You might also check with the state you reside in for loans that are available from the state.


Work Study

Another aid offering might include “work-study” opportunities. This is an excellent source of defraying some of the college expense families’ face. Work-study income is great in that the income received does not have to be used in the FAFSA equation thus reducing the EFC (Expected Family Contribution). Work-study are jobs that allow for studying while working. For example, you might be paid to answer the phones in the English department where it rings once every 4 hours. Students offered this aid must follow up immediately when getting to campus as these jobs sometimes go quickly.


Grants and Scholarships

College scholarshipFinally, grants and scholarships are types of aid that do not need to be repaid. The Federal government has Pell grants dependent upon the family’s financial situation and are not required to be paid back. Grants and scholarships often are available from the colleges and universities to cover college costs and expenses as well as college tuition rates. These funds are the most desirable since they do not have to be paid back. This is where the college or university is investing in the students that they feel will be the greatest asset to their university.


Make Money for College

Obviously getting a job to save money is great. A couple of items to consider:


  • The money earned by a student in jobs other than work-study opportunities count against the family by increasing their expected family contribution.
  • The best way to make money for college is to prepare yourself as the student by disciplining yourself to get the best grades and test scores you possibly can. Increased grades and test scores usually equate to more “Free Money” in grants and scholarships from the schools of your choice.
  • Don’t stop with grades, get involved in leadership opportunities as well as volunteer work. Showing you are of value to your community will show that you can be an asset to the college or university you attend.
  • Make sure that you apply and seek aid from numerous colleges and universities and make them compete for your attendance at their school.
  • Make sure your resume and essays scream as to why you would be a valuable asset at their school. This will create the greatest amount of “free” money versus the money you have to earn by working or you have to pay back through loans for your college costs and college tuition.



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