You have come a long way Class of 2018 with only a few more months of high school left. Financial aid letters will start showing up between now and mid-April. Use this month to reflect on what you really want out of post secondary education and what fits financially. Understand each award you have received, compare them side by side and explore the

ramifications each choice will have on your future.

Understanding Awards
Financial aid letters differ in presentation. Call the financial aid office for clarification as to what part of the award is gift aid, what part is loans, or what part is work-study.

Find out if each element is renewable and for how many years. Research requirements like enrollment (full or halftime), living on campus, and maintaining a certain Grade Point Average (GPA).

Financial aid packages can change each year. For example grants are more prevalent in a package sent to a freshman with a shift to loans in subsequent years. If you receive money from a non-college-affiliated scholarship, ask the financial aid office how it will affect their offer. Some schools reduce their financial aid package. Furthermore some scholarships cannot be used in conjunction with other aid.

Bottom line... read the fine print. Having full comprehension of the financial package makes the process of using it more efficient.

Comparing Awards

Once you understand each award compare them using a table. Better yet, put it on a spreadsheet and let a computer do the calculating.
Have a column for each school. Under the school’s name list the costs (tuition, fees, books, etc). Further down the page list the financial aid (how much is scholarships, work-study, grants, loans, etc), then figure the difference. You can also use the comparison tool at FinAid.org (under ‘Calculators’ choose ‘Award Letter Comparison’ near the bottom of the web page) or at bigfuture.collegeboard.org (under ‘Pay for College’, go to ‘Tools & Calculators’ - ‘Compare Your Aid Awards’ is on the bottom left).

Be mindful of the interest you will pay, potential disbursement fees. and how debt will affect your psyche (ending school with a degree where potential earnings won’t cover loan payments).

One of the results of the FinAid.org calculator is the “Ideal Income Required to Repay Student Loans." Compare the income required to repay the loan against the potential earning of your chosen profession.

You may accept, reduce or decline any portion of the award letter.

Definitely contact the financial aid office if you have any questions. It is their job to make sure you understand the award you have received.

Your Contribution
Ask your parents if they have set aside money for your education expenses, and how much they can realistically contribute.  If you spend their savings on your education, are you prepared to fund their retirement?

Ultimately, the burden of funding your education is primarily on your shoulders. If an award letter falls short of giving you a sound financial outlook, consider other pathways. Use this month to consider each offer and weigh your options.

Good Luck.

Next Life 101: April 5

 

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