You’ve got your educational funding award letter in the college you’ve always wanted to attend. Before you begin celebrating, there’s only one problem…how do you even look at this thing?
If you’re feeling lost, don’t worry! Here’s a fast rundown regarding how to read a financial aid award letter.
What’s an economic Aid Award Letter?
A financial aid award letter is really a document that outlines the different sorts of aid a student is eligible for, such as grants, loans, and scholarships. It also lists the particular amount of each type of aid that the student continues to be awarded.
Financial aid award letters will also be sometimes known as educational funding notification, financial aid package, or simply an award letter. Students can get to receive their letter around the same time they receive their acceptance letter, typically in late March or early April.
Students should carefully review their award letter and compare it for their estimated costs of attendance (which we’ll talk about inside a second) to obtain a clear picture of methods much they’ll need to cover by themselves.
Key Financial Aid Terms to Understand
Financial aid award letters vary from school to college. But here’s a quick rundown of some key stuff you should see when you are getting your letter within the mail.
The Price of Attendance (COA)
The cost of attendance (COA) is the amount it will cost you to go to college for one academic year. It typically includes tuition and costs, room and board, books and supplies, along with other expenses like transportation. You’ll typically see this estimate towards the top of your award letter.
Expected Family Contribution (EFC)
This may be the estimated amount your folks are expected to contribute to your education, as determined by your Free Application for Federal Student Aid (FAFSA).
FAFSA may be the form you (and your parents, if you’re a dependent student) must complete to try to get federal educational funding, including grants, loans, and work-study.
Your financial require is the difference between your COA and EFC. In other words, it’s how much you’d need to pay out of pocket should you be awarded no educational funding at all.
If your COA is $20,000 as well as your EFC is $10,000, your financial require is $10,000.
Grants, Scholarships, and Other Gift Aid
These are types of free money that you simply don’t need to pay back. Scholarships are often based on academic merit, but could also be according to need, your major, or other criteria.
Scholarships are usually awarded by colleges, while grants are often awarded by the government. Scholarships can be used to purchase any kind of educational expense, while grants in many cases are need-based and may only be employed for specific expenses, like tuition and fees.
Student loans are a type of financial aid that you will have to repay, with interest. There's two types of student loans: federal and.
- Federal loans are for sale to a lot of students, regardless of their financial need. They’re backed by the government.
- Private loans are offered by banks and other lenders, and usually require a a good credit score history.
Work-study is a kind of financial aid that permits you to work in exchange for the money to assist pay for college. It’s typically needs based, so your eligibility for work-study may be based on your FAFSA.
The amount of money you can generate through work-study depends upon your financial need, the college you attend, and also the accessibility to jobs. Work-study jobs are usually on campus, although some might be off campus.
When Can one Be prepared to Get My Educational funding Award Letter?
For first-time, full-time students who submit the FAFSA through the priority deadline, you will probably receive your educational funding award letter around the same time you get your admissions decision.
If you’re a returning student or you submitted your FAFSA after the priority deadline, it may take longer to receive your educational funding award letter.
What May be Missing from the Letter?
Not all colleges have to range from the same information in their financial aid award letters.
For instance, a college’s cost of attendance (COA) covers an array of expenses, from tuition and fees to books and supplies.
However, some universities may omit certain expenses, such as transportation and private expenses. It’s your decision to include these expenses back in so you can compare colleges apples to apples.
Scholarships and loan terms could also differ from school to school. If you’re granted aid, pay attention to just how long any scholarships last, what requirements you need to meet to keep them, and any other requirements.
MU30 TIP: For those who have any queries regarding your educational funding award letter, don’t hesitate to achieve out to the educational funding office at the college. They’ll become more than happy to assist you to understand your choices and make the best decision for the future.
What Should I Do after I Receive My Educational funding Award Letter?
Once you’ve received your financial aid award letter, it’s time for you to compare your options and make a decision which college to attend.
When deciding, make sure to consider:
- The financial gap you’ll have to cover after you take into account the total price of attendance and the types and quantity of aid you’re being offered.
- What you can realistically afford to repay once you graduate. Getting an excessive amount of in loans can place you in a difficult financial situation after college, so make sure to borrow responsibly.
For instance, say you’re trying to choose from the two schools within this table — a private university along with a public university:
|Private university||Public university|
|Cost of Attendance (COA)||$55,000||$25,000|
|Expected Family Contribution (EFC)||$10,000||$10,000|
|Financial need (COA – EFC)||$45,000||$15,000|
|Financial aid award||$30,000||$12,000|
In this table, the financial gap is how much you’ll need to cover up front every year.
Even although the private university is willing to grant you $30,000 in aid when compared with $12,000 in the public school (which sounds like the best deal on the surface), the public school is still a much cheaper option.
What If I Don’t Like My Financial Aid Award Letter?
If you’re not happy using the educational funding award letter you received, don’t panic! There are a few things you can do:
Look For Other Causes of Aid
You may be able to find additional grants from private organizations or the government.
Negotiate with the Financial Aid Office
If you've got a good reason for why you need more aid, you might be able to negotiate using the financial aid office for a better package.
Take Out Loans
You can always take out private or federal student loans to assist cover the cost of college in case your heart is set onto it. But be mindful of accumulating too much education loan debt.
The average education loan payment per month is $460 but could be as high as $2,553 for a professional degree. Consider Future You and keep your minimum payments as low as possible to help ease your transition into the workforce once you graduate.
Go to a Cheaper School
Your latter would be to attend a cheaper school. This really is ultimately what I chose to do when I graduated senior high school.
When my financial aid award letters started rolling in, I had been stuck between two schools: my dream college (a private university that would cost $40K a year after aid) along with a public university that would require me to pay about $2,000 annually.
As much as I loved the non-public university, I felt like no bachelor’s degree was worth over $120K in student loan debt. So I find the public university instead. I don’t regret it one bit.
Now that you know things to look for in a educational funding award letter, it’s time to start reading! And don't forget, for those who have any questions on the way, the financial aid office is definitely there to help.
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