ACCEPTED! HOW TO DECIPHER YOUR COLLEGE AID By Anna Helhoski
With college acceptances in hand, now comes the hard part: understanding your financial aid offers.
These letters are notorious for being laden with jargon that differs from offer to offer, making comparison difficult. But you can learn how to interpret award letters to understand the costs and choose an affordable option. What to expect from aid offers Financial aid offers should include all of the federal, state and school aid you can access. That could mean free aid, such as grants, scholarships and work-study opportunities, that doesn’t need to be repaid, and unsubsidized and subsidized federal loans, which do. If these aid types are grouped together without explanation, they can be hard to distinguish. Your offer also might include a parent PLUS loan as part of the award, but avoid using it if possible. These loans have higher interest rates than loans made directly to students. And unlike typical student loans, only parents can take them on, and they require credit history to qualify. Schools also must provide the cost of attendance, but that’s not the amount you owe. It bundles indirect costs like books, supplies and transportation, with direct costs such as tuition, fees, housing and food. The cost of attendance is usually an average, says Brenda Hicks, director of financial aid at Southwestern College in Winfield, Kansas. Things like room and board could be pricier if you opt for a more expensive package, like a single room.
Why offers are difficult for students to read
Schools use different names to refer to the same type of loan.
For instance, one college’s aid offer might list a “Federal Unsub Stafford Loan,” and another school’s might say “DL Unsubsidized Loan.” But they’re the same thing. Unsubsidized federal student loans are the only type of federal loan every student can access, regardless of financial need. They’re different from subsidized loans, which don’t accrue interest while the student is in school. Subsidized loans ease costs for students, which is why they’re given to those who demonstrate need. But among 455 college aid award letters, there were 136 different names used to describe the federal unsubsidized loan, according to a 2018 study by New America, a nonpartisan think tank, and uAspire, a Boston-based college affordability nonprofit. “How can we expect families and students to navigate this process if even the aid that everyone qualifies for is called something different?” says Rachel Fishman, deputy director for research with the education policy program at New America.
• 19 •
Powered by FlippingBook