So you filled out your FAFSA, got your SAR, were told your EFC, were accepted, and now have your FinAid Award Letter. Great! Now what's all that mean? Finance guru Jodi Okun walks you through what these numbers mean and how to determine the financial feasibility of your college. choice in today's post.
The financial aid award letter tells you how much financial support the school can give you for the coming year. You will receive a financial aid award letter from all schools where you have been accepted and from which you requested financial aid.
Award letters tell you exactly how much financial support the school is able to provide for the upcoming year. In general, the school computes the award based on the information you provided in the Free Application for Federal Student Aid (FAFSA). As you may recall, after you submitted the FAFSA, the U.S. Department of Education sent you a Student Aid Report (SAR). The SAR, in turn, showed an amount called the Expected Family Contribution (EFC).
The school subtracts the EFC from the cost of attendance (tuition, room and board, textbooks, transportation, and personal expenses) to determine financial need and the amount of your award. The amount of aid awarded by the school cannot exceed your financial need.
Some of the factors schools consider when awarding financial aid include:
-Cost of attendance
-Number of family members in college or graduate school
-Scholarships or grants not received through the school
-Major field of interest
To evaluate the financial aid offer, consider both the aid package and what the college costs. It's quite possible that the most expensive school on your list might not cost you the most, depending on the package awarded by each school.
When comparing the offers, do the following:
-Compare award information from each school
-Determine if the financial aid award and your savings are enough to cover the cost of attendance
-Analyze options for borrowing additional money when savings are not enough to cover the cost
-Estimate monthly payments associated with borrowing different loan amounts to better understand if you can afford a school
-View different financing scenarios to find the right solution
Note the cut-off date for responding to the financial award letter. If you miss this deadline, your award could be in jeopardy. As soon as you decide which college to attend, let the admissions and financial aid offices at your schools know.
This article was originally published March 13, 2012 at College Financial Aid Advisors.
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