How to Compare Financial Aid Awards?
You got into the top schools on your list. Each has sent you a financial aid award. One offer looks better than the other, but is it really? It’s important to compare apples to apples when looking at financial aid offers. Here are 6 questions to ask:
- What is the Student Budget? Does the college list all the costs for going to college: 1) Tuition & Fees; 2) Room & Board; 3) Books & Supplies; 4) Personal Expenses, 5) Transportation (getting to and from the campus). If the award does not include these items, search the website for the information or call the college.
- What is your Expected Family Contribution (EFC) on your Student Aid Report? The amount your family is expected to pay toward college is on the student aid report generated when you filed the FAFSA (Free Application for Federal Student Aid). This number is needed for comparing financial aid awards. If your family contribution is close to or more than the student budget, then your awards from the college are going to be based on merit, and not on the financial need you have.
- Is there a gap? You should know your EFC from filing your FAFSA. To calculate how much financial aid you should be receiving, subtract your expected family contribution from the total student budget (all five items from question 1). The remainder is your estimated financial need at the college. Is the college meeting your full need or only a portion of it?
Total Cost of Attendance – Expected Family Contribution = Need
- How much of your award is grants or scholarships? Grants and scholarships are money that you will not have to repay later. You want to maximize the amount of grants and scholarships you receive and minimize the amount of loan money you must take out. Are the grants or scholarships renewable for four years? What conditions exist for the renewable awards (a minimum GPA, number of credits completed, etc.)?
- How much is in student or parent loans? How much of the offer is a parent loan? A financial aid award of a $20,000 parent loan – but no grants or scholarships – is not a good offer. Parent loans (when necessary) should ideally be used to help pay for the expected family contribution and not to meet your financial need.
- Is there a good mix? Is there something missing? Are you being offered grants, scholarships, loans and work? Look for a good mix. If you are not offered “work study” ask about it. It is especially helpful if you are looking for a campus job to earn money for your personal expenses while in college.
Take Action
Use the EFC Calculator online to determine your Expected Family Contribution. Compare the total cost of each college and the financial aid offer received. A clear comparison is important to make the right decision!