Example - College Ed Xpress monthly e-newsletter.Do you have children that are college-bound high school juniors or seniors?
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Virtually all college literature on the topics of college admissions and financial aid are targeted to the student; leaving the parents - who generally paying most of the bills - stumbling in the dark.
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Date: March, 2018
Award letters can be very confusing and they don't all follow the same format. Some don't tell you how much you will actually pay. Some may include loans that you don't want. Hopefully, the letters will include all the costs associated with attending that college, including books, personal living and travel expenses. It's also the sign of a good college if they include their budget figures as in the example below.
The most helpful award letters will be divided into three sections. Below is a representative example. In this example the student is eligible for need-based aid at a private university:
*Indirect costs are not always included, but should be.
The FAFSA calculates your Expected Family Contribution or EFC (as shown on your SAR), which is the starting amount that colleges assume that you will be paying out of pocket. When colleges create a financial aid package, they first take the Cost of Attendance (which may or many not include indirect costs, such as books or personal expenses) and take the amount of your EFC right off of the top. What remains is your Financial Need (COA - EFC), which is what the college will try to fulfill using grants and scholarships, loans of various types, and Work-Study.
However, most colleges don't meet 100% of your Need. The amount that is not met is called the GAP (Need minus Aid). Therefore, you will have to add that GAP to your EFC to see the actual cost that you'll have to pay out of pocket for college expenses.
In the example above, the Cost of Attendance is $60,592. The college then subtracted your EFC of $23,991 to determine your Financial Need of $36,601. However, they only offered a Total Aid award in the amount of $33,000. This still leaves $3,601. This is the Gap that you'll have to pay in addition to your EFC. So, your actual out of pocket cost is $27,592.
A note about loans: If you look at the different types of aid in your Financial Aid Award, you will see a Federal Direct Unsubsidized Stafford Loan for $2,000. This really shouldn't be called financial aid, but it's offered in 99% of all financial aid award offers, so we are obliged to count it. You are not obligated to take any loan or Work-Study offered.
Some colleges will include a Federal Direct PLUS Loan which looks like aid because it reduces your out of pocket cost. The cynic in me thinks it's the colleges' attempt to pass it off as real financial aid, at least initially. PLUS stands for Parent Loan to Undergraduate Student and it is not financial aid and should not be included when evaluating an award offer. In our example, if the college were to include a $27,592 PLUS Loan as part of the aid award, it would then look like college wasn't going to cost anything (that's actually the idea).
Or, they may simply include a PLUS Loan to let you know what you're eligible to borrow.
As you already know, scholarships and grants are free money that don't need to be paid back. With Federal Direct Subsidized Loans your student is getting the use of the money at no cost for as long as they're in college at least half-time and have a grace period of six months after they graduate.
When your student receives their second, third, etc. award letter, you can begin comparing them. When making these comparisons, you may find that not all colleges include transportation as part of the cost of attendance. Some may not include personal expenses and costs for books and supplies and if they do they may appear indirectly. If colleges don't include transportation costs in their letter, call and ask that it be included in the award package, and ask for aid to cover the cost, especially if the college is a fair distance from your home.
When looking at the different amounts you will be expected to pay, the challenge is to know if the awards are fair or not.
What To Do If You Need More Aid
Unless you're leveraging a merit award with a better one from a different college, you'll be asked to provide some kind of documentation that provides third-party confirmation. If you ask for more money without something to substantiate your request, it is doubtful that the school will see its way clear to increase the offer already on the table.
Despite all of this, it never hurts to ask if that's their best and final offer. The worst thing that can happen is they say, "No."
Don't Be Pressured
Colleges are accelerating their marketing efforts to entice your student to send in the deposit ahead of National Decision Day, which is May 1, 2018. With declining enrollments, admission departments are nervous they won't meet their class goals. To push your student into accepting sooner than later, colleges are now following up with letters implying that if you don't apply for the student loans right away and name them as the payee, your student will lose out on this "opportunity." It's a head fake to get your student to take the next step in the college selection process. Student loans should only be applied for AFTER you've sent the deposit, not before. What colleges don't tell you is your student can take out a federal student loan at anytime prior to the end of the school year!
Along with scheduling and prepping for the ACT and SAT, now is the time for your student to prepare an activities résumé also known as a "brag sheet" for three reasons:
But a brag sheet is so much more than that! As part of a well-crafted college admissions application, a brag sheet can help minimize less-than-perfect grades and test scores by putting the emphasis on the student as a whole and not just on their transcript.
The Purple Cow
A magnificently crafted brag sheet, dynamic activity section, essays that capture the reader's attention and enthusiastic letters of recommendation all go toward creating what it is referred to as a "Purple Cow." Think of a country road and seeing all the Jerseys in the pastures chewing their cud. They all look the same. All of a sudden, you spy a beautiful purple cow off by herself, completely out of place with the others. Admissions can't help but see it and say, "Ah, finally! Something interesting and exciting for a change."
Colleges have been dealing with declining enrollments for several years. To survive, they are discounting tuition more than ever, accepting fewer students, cutting majors, letting faculty go, and merging with other institutions. A few public universities are even offering in-state tuition to non-residents. Just because a college may be cleaning house doesn't mean it's not a good college.
There are occasions when the more expensive school may be the better value. Knowing the metrics by which to judge can help you decide that spending a little more can pay big dividends by lessening the time it takes to graduate.
Until next month...
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