Give meaning to the colleges' financial aid letters

Congratulations – you are thinking of the university! But first, pay for it: Students who have applied for financial badistance through the Free Application for Federal Student Aid, or FAFSA, should receive their award letter now.

Different schools have different names for these letters: financial aid offer, merit letter, award letter or financial aid package. And since there is no standard format either, deciphering the amount of support you receive and the amount you will pay can be very confusing.

Here is some help:

PRICE COMPONENTS

Generally, there are three types of scholarships: free money, such as scholarships and grants; borrowed money, such as loans that must be repaid; and money earned, such as work studies in which you get work alternately, earn money without having to pay it back.

The offer varies from one year to the next.

DOSSIER – In this photo of April 9, 2019, pedestrians walk on the campus of Stanford University in Stanford, California. Generally, there are three types of rewards: free money, such as scholarships and grants; borrowed money, such as loans that must be repaid; and money earned, such as work studies in which you get work alternately, earn money without having to pay it back. The offer varies from one year to the next. (AP Photo / Jeff Chiu, File)

It's important to pay close attention to the details of each component too, Sallie Mae insists. Scholarships and work may be renewable or an offer for this year only. The nature of the loan may not be entirely clear either. Indicate whether they are federal loans, private loans or even loans for parents. The type of loan will determine the interest rate and the repayment terms.

Eva Dodds, board director at Collegewise in Detroit, suggests opening the school's financial aid website when you study the offer. The web page should contain a complete definition of each proposed financial badistance option.

If you are still not sure, talk to someone at the financial aid office, said Dodd. Financial aid officers are the interpreters and navigators of the process. It's their job to make sure the offers are understood and fulfilled, she said. Do not hang up until you understand each offer of the letter.

COST OF PRESENCE

The cost of attendance, or COA, is an estimate of what you will pay for a school year.

Again, there is no standard in this area, so some schools can only include tuition and tuition fees, while others also consider housing, meals, books and books. supplies. If the COA is not included, check the school website or contact their help desk. Consider additional expenses for travel and personal needs when you badess your total costs.

Do not confuse ACO with expected family contribution, it's just a measure used internally to calculate aid, not what the family actually pays.

MIND THE GAP

Sometimes there is a gap between what is offered and the cost. The easiest way to calculate it is to subtract the cost of participating in the rewards. Only what you have to pay is left. If you have several offers, Sallie Mae suggests creating a spreadsheet to compare them. Dodds also suggests highlighting loans in a different color than subsidies or any other "free money" when you compare them.

If there is a gap, you can use your savings or apply for a private loan to cover them. You can also contact the financial aid office to request a rebadessment. This is especially useful when someone's financial situation has changed.

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Follow Sarah Skidmore Sell on Twitter @sarahssell

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