Evaluating Your Financial Aid Packages

Your financial aid award package is a very important factor in deciding your college choice--but do not let it completely dominate your decision making. If there is little difference between the financial aid offers made by your target colleges, you should make your decision based on your interest level in the school and how well each school meets your needs.

When financial aid packages are substantially different from one another, you should sit down to do a careful evaluation of the offers being made. Some basic points you will want to consider:

Renewable scholarships--If you are expecting a scholarship or grant from an outside source, try to determine if the scholarship applies for one year or is renewable. Investigate whether it will affect the amount of aid offered in your financial aid award package.

Package structure--Do not jump to conclusions about your grant aid. Just because one school offers more grant aid than another, it does not mean it is offering the best package for you. Add up the total amount of self-help aid (loans, work-study) offered by each school. Compare the ratio between grants and loans. You may be able to graduate from a higher cost school with less debt than if you attend a lower cost school depending on how the package is structured.

Expected Family Contribution--Compare any "gaps" or unmet need left by packages awarded by colleges. Compare the Expected Family Contribution for each school--a college could offer a substantial amount of gift aid, counterbalanced by a high EFC. If your family needs to borrow money to meet a high EFC figure, you could have significant debt to repay after graduation.

Debt--Evaluate the amount of debt you and your family will be taking. Ask the financial aid offices for loan repayment tables to get an idea of what your monthly payments would be like after graduating from college.

Travel expenses--Gauge the distance a college is from home. The further away a school is, the higher your expenses will be for travel.

Budget--How realistic is your budget for college and does it reflect the reality of the financial aid packages being offered by target schools? If your budget estimate is low, then you will probably have to borrow money to help cover expenses. An estimation of your income taxes is helpful. Waiting to file your financial aid form until after you receive your tax return may cause you to miss aid deadlines.

Loan terms--Carefully compare the terms associated with self-help aid such as loans. Have your parents or counselors helped you evaluate loan amounts, interest rates, payment schedules, early payment penalties and the length of the loan. Look for the best combination of terms for self-help aid.

Multiple loans--Avoid the urge to borrow smaller amounts of money from a variety of loan companies. Borrowing this way can ultimately cost you more than if you borrow one larger amount. Again, compare terms and repayment schedules.

Carryover--Investigate whether your financial aid awards carry over into the next three years of college. Many schools reserve most financial aid funds for incoming freshmen. So, your first year might look great in terms of the amount of aid that is awarded. However, the next 3 years of college life could be financed differently--less by grant aid, and more by self-help aid.

Negotiations--Be willing to negotiate with financial aid offices about the financial aid package they offer you. Many colleges are recruiting students to attend their schools, and may be willing to negotiate the terms of your financial aid package. In particular, some students with excellent academic credentials may be in a better position to alter the terms of their award package. Be sure to ask financial aid officers if you can expect comparable aid for all four years.

Matching offers--Colleges will never promise to change terms, but most of them are now open to honest, above board discussions and negotiations about college cost and financial aid packaging. Don't be reluctant to inform one school of what another school is offering you. Many financial aid offices are willing to look at other aid packages to determine if any changes might be possible in their own.

Remember that financial aid is ONLY ONE aspect of college selection. Do not discount your emotional attachment to a particular school, or give up on the best academic program just because it costs too much. If a school meets all of your criteria for attending, it could be worthwhile to make a larger investment in that education. In other words, are you willing to pay more to attend one school than another? Only you have the answer to this!