decoder disc, image by flickr user LEOL30, cc license
Yesterday, we covered the difficult coversations parents and students have when they negotiate which school to choose. For many families, cost is a major consideration. In fact, according to this U.S. News survey of college freshman:
- For 48.7% of freshman, financial assistance was very important in their final college choice.
- For 45.9% of freshman, the cost of attending their choice was very important in their final college choice.
To understand the difference in costs, families need to compare their financial aid awards. The problem is, however, that these award letters can be confusing. What’s the difference between ‘sub.’ & ‘unsub.‘? (Among some other differences, subsidized loan interest is paid by the Department of Education in some situations, while the borrower of an unsubsidized loans is responsible for paying the interest at all times.) Why is a loan on my financial aid letter? (Because some loans are considered financial aid.) Are grants preferable to loans? (Grants and scholarships are very, very preferable to loans. Loans must be repaid; grants and scholarships do not need to be repaid.)
In helping families understand this coded language, we recommend three sources. First, start with this page from the Department of Education. Many schools are voluntarily using the suggested “financial aid shopper’s sheet.” This sheet includes a helpful glossary that explains some of the differences between a school’s offered financial aid package. Searching studentaid.ed.gov might also be fruitful, and many frequently asked questions have their own space on the front page of the site.
If your school doesn’t use that format–and many schools still don’t–then you might need some additional explanation. NPR recently compiled a “How to Read a Financial Aid Letter” page. The guide, located at the bottom of that webpage, is one of the clearest, most comprehensive guides on the web today.
Lastly, if you have more questions we suggest calling a financial aid representative of the school and just asking. This may be a good tactic anyway, as financial aid offers are negotiable. By calling in and asking for clarification, you may be able to strike up a conversation in which you politely ask for more grant money in exchange for your student’s enrollment.