How to Review and Compare Your Financial Aid Awards
How much financial aid you receive may vary between colleges and may change with each year you attend. It’s important to understand how much your college expects you to pay. Reviewing your financial aid award letter is one way to identify the amount of aid you’ll receive to help pay for college.
When reviewing your financial aid award, there are a few steps you can take to ensure you’re making a financially informed decision.
- Gather the information you need
You’ll need the financial aid award offer from your college, which may have been mailed, emailed, or posted on your student portal. If you haven’t received your offer yet, the best way to figure out when you’ll get it is to contact the school’s financial aid office and ask. In addition to the financial aid offer, you should determine the cost of attendance by looking at the college’s website or the college’s profile on BigFuture.
- Assess the different types of financial aid on your financial aid offer
Financial aid can include grants and scholarships, loans, and work-study. Grants and scholarships are free money you do not have to repay and are generally preferred to the other two types of financial aid. Knowing the different types of financial aid is essential to successfully interpreting your costs.
- Calculate how much you’ll have to pay the college
There are tools available to help you calculate your costs; try using the College Cost Calculator to figure out how much you’ll have to pay. We recommend calculating your estimated bill before loans by subtracting grants and scholarships from your direct costs, which includes tuition and fees, housing, and meal plans if living on campus. The estimated bill before loans will show how much you need to pay directly to the college.
- Identify the long-term costs of borrowing student loans
If you plan to take out student loans to help cover your costs, you should calculate the long-term costs of borrowing them. Different loans may have different terms, interest rates, and benefits. For example, direct subsidized loans won’t accrue interest while you’re in college at least half time, while unsubsidized loans will. Remember to account for all the years you’ll be attending college. Use a loan calculator to identify the monthly payment if you were to repay the loans over ten years and consider the differences between federal loans and private student loans.
- Consider your indirect expenses
Indirect expenses are costs beyond what you need to pay directly to the college. You will need to purchase supplies for your classes such as books, technology, and notebooks. If you plan to live on campus, you may need to consider the cost of traveling back and forth each semester including for holidays. These expenses will vary from one college to the next, so understanding how they differ can help in making a college decision.
How to compare your financial aid offers
To help determine which college makes the most sense for you financially, start with these questions when comparing your college options.
- How much will each college cost for one year?
Compare the estimated bill before loans are applied. This will help you understand the breakdown of your bill and ensure you know how much each college is asking you to pay per year.
- How much will you need to borrow in loans for each college?
Borrowing money in the form of student loans is the reality for many students who plan to attend college, but what you’ll need to borrow at each college may vary. Consider the cost of each college after subtracting grants, scholarships, and other available resources (such as contributions from any college savings accounts), to determine how much you may need to borrow.
- What are the different indirect expenses of attending each college?
These indirect expenses will vary based on a few factors, such as what’s included in tuition and fees and the location of the campus. If one college covers books in their tuition and fees, it could save you a significant amount of money over the course of a degree. Don’t forget to consider specific costs related to traveling to and from college. For example, going to an out-of-state college may require you to buy multiple plane tickets. While not paid directly to the college, these costs impact how much you’ll pay.
Once you’ve received the information from all the schools you’re interested in, start reviewing and comparing your financial aid offers to determine which colleges are affordable for you. Once you’ve made your college decision, there are still some next steps to take before you get on campus, such as paying a tuition deposit, attending orientation, and others that you can read more about here .