Tis the Season for Financial Aid Offers
It's that time of year when the tulips and daffodils start popping up after hibernating all winter, and the warm spring sun melts those last stubborn piles of snow. It's also that exciting time of year when bulky envelopes start arriving in the mailboxes of high school seniors containing college acceptance letters.
College acceptance letters are a time to celebrate! Mixed in with that celebration is the reality of upcoming college expenses, which can cause worry, confusion, and stress for many families. As Director of Community Outreach, I spend a good deal of time during the spring season working with families to help ease their concerns. Over the years what I've discovered is that these conversations have common themes.
For example, I recently met with a family whose child had been accepted to her first choice college. This student had received some merit-based financial aid to help with costs, but the parents were still confused about the financial aid offer, types of aid, and paying the bill. As I listened to their questions it struck me how common these questions were and that I had heard them from other families. Below are six answers to some of the most commonly asked questions.
- How much will this college cost? Most colleges will list their annual cost on the financial aid offer, but if they don't, you can find the cost on the college website, oftentimes in the financial aid section. Do a search on the site if it's not easy to find, and if all else fails, call the financial aid office.
- How much financial aid did I receive? Figuring out how much financial aid was received is often confusing because each school uses different terminology. We created a Financial Aid Fact Sheet that distinguishes between grants and scholarships (free money!) and loans and work-study programs to make it clearer.
- How will we pay the bill? This is probably the most commonly asked question and I would say the one that is not a one-size-fits-all answer. Each family has their own way to pay the bill. Usually this consists of a combination of current income, savings, and loans. Determine your strategy by laying all of the resources out on the table that you will use to meet the gap between costs and financial aid.
- When should I make a payment strategy with my savings? If you have been a steady saver in a structured college savings plan such as the U.Plan or the U.Fund, now is the time to determine how to utilize those savings towards your bill.
- Should I use the interest-free monthly payment plan? Interest-free monthly payment plans are a great way to spread the cost of the college bill over the year and help keep borrowing to a minimum. Figure out how much you can afford to pay monthly and then incorporate it as part of your strategy. Contact the college for more information about a payment plan in order to spread the cost out over time.
- What is the Parent PLUS Loan on my financial aid offer? A Parent PLUS Loan is not a type of financial aid, even if it is packaged on the offer! It is a credit-based loan, and it is simply an option that a family can consider when making a plan to pay the balance due.
I could continue on with more questions, but these six commonly asked questions are ones that are always asked.
Getting back to the family that inspired me to write down these questions, I realized that each spring when I meet with folks like these, I am left with a sense of renewal and rebirth because I was able to help and impart the great knowledge I have on college acceptance letters. Each student has an incredible opportunity to enter college and grow intellectually. As this family was leaving, I made sure to remind the daughter that she needed to keep her grades up in order to maintain her merit scholarship and she confidently smiled at me and said she would do so, since she has worked so hard to keep her grades up throughout high school.
[caption id="attachment_562" align="alignleft" width="600"] A sample offer to help distinguish between the different types of offers that can be included.[/caption]