Comparing Financial Aid Comparing Financial Aid PackagesPackages

“According to student loan servicer Sallie Mae, 65% of families used grants and scholarships to pay for college in 2013, up from 50% of families five years prior. What’s more, 49% of parents say they’re not regularly setting aside money to college savings, and 70% of those parents say the reason they’re not saving is because they simply can’t afford to.”

Source http://www.forbes.com/sites/maggiemcgrath/2014/03/31/10-rules-for-decoding-college-financial-aid-award-letters/

What happens after you submit What happens after you submit the FAFSA?the FAFSA?

• A Student Aid Report (SAR) is sent to you• Colleges that you have been accepted to will send you:

– Preliminary Aid Estimates– Financial Aid Award Letters

What is a “Financial Aid Award”?What is a “Financial Aid Award”?

• LoansLoans – typically make up more than ½ of the “financial aid award” and must be repaid• ScholarshipsScholarships – free money based on criteria of donor• GrantsGrants – free money typically based on financial need• Work Study Work Study – money you earn while going to college• Institutional Awards Institutional Awards – free money from the college

Federal Stafford LoanFederal Stafford Loan

• Government Subsidized or Unsubsidized Loan• Subsidized means you do not have to pay interest while in school• Unsubsidized means interest accrues while in school (amount owed at

graduation will be more that the amount you borrowed)• Interest rate at 3.9% in 2015

Perkins LoanPerkins Loan

• Need based• Interest rate is 5%• Repayment begins 9 months after your get out of college

Parent PLUS LoanParent PLUS Loan

• Interest rate at 7.21% for 2014-15• Loan in parent’s name

Federal College Work StudyFederal College Work Study

• You must find a job on campus• Jobs offered on a first-come-first-served basis• No guarantee you’ll get a job• No guarantee of hours or amount of money offered in award package.

Ask for Professional Judgement Ask for Professional Judgement Review Review

• Professional judgement is asking the college to reconsider your aid package based on changes to your financial need.

• Examples: medical bills, loss of job, or tuition expense for a sibling, divorce, death, a better offer at another school.

• Could ask to change loan money for more work-study

Find Out the School’s Scholarship Find Out the School’s Scholarship PolicyPolicy

• If you get additional outside scholarships, the school may reduce the scholarships that they are offering you

• Some school will use outside scholarships to reduce the amount you will have to pay in loans

How Financial Need is How Financial Need is DeterminedDetermined

Cost of Attendance (COA) $35,000Expected Family Contribution (EFC) - 10,000Financial Need $25,000

This is the amount that Financial Aid Office will try to come up with. It is what is called a Financial Aid Package

Good News about EFCGood News about EFC

• If you filled out the FAFSA, and you and a sibling are going to college at the same time, your Expected Family Contribution (EFC) may be cut in half!

• EFC changes from year to year and it could go down as your financial situation changes

Which college is the best deal?Which college is the best deal?

Nuview Nuview UniversityUniversity

Ivy League Ivy League UniversityUniversity

Cost of Attendance

$20,000 $40,000

Your EFC* $9,000 $9,000

Remaining Financial Need (RFN)

$11,000 $31,000

*EFC is the same regardless of the university you choose to attend

Net Price Trumps Overall CostNet Price Trumps Overall Cost

• When you look at aid packages, look at the net cost (actual cost to youyou) and not the overall cost of attendance (sticker price)

Which college is the best deal?Which college is the best deal?

Nuview Nuview UniversityUniversity

Ivy League Ivy League UniversityUniversity

Cost of Attendance $20,000 $40,000

Your EFC* $9,000 $9,000

Remaining Financial Need (RFN)

$11,000 $31,000

Grants $1,500 $0

Scholarships $4,500 $10,000

Work Study $500 $1,000

Loans $1,500 $20,000

Total Awards $8,000 $31,000

WorksheetWorksheet

Online Comparison ToolOnline Comparison Tool

http://www.finaid.org/calculators/awardletter.phtml