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College Admissions: How to Increase Your Financial Aid Package

Monday, March 21, 2011


Over the next few weeks, most families with college-bound seniors will be comparing financial aid packages. It’s a daunting process which can often end in disappointment. The sad reality is that students usually see the best aid packages at their back-up or safety schools, and many families are left weighing the value of a degree from one college vs. another. Before you make your final decision, here are some critical things you need to know.

The Bottom Line Can Be Deceiving

It’s not the total amount of your award that matters. How much debt a student will graduate with should be a key factor in your assessment. First, you need to separate out money which does not have to be paid back, like grants, scholarships, merit awards and tuition reductions. Make sure to check the terms of each to ascertain which are renewable-some may not be. Total that portion of your package and THEN look at the work study and loans. Remember that work study is paid to you throughout the year, not up front. Compare these two dollar amounts across all your colleges. It’s one thing to graduate with $10,000 to $50,000 worth of debt. In fact, student loans in moderation can be good way to teach a young person the value of his or her education and have them vested in getting good grades. However, coming out of college with $75,000 to $150,000 in debt is a difficult load for a young adult. There are few private colleges I could say would be worth six figures in debt, if you can attend the primary campus of your state university without debt.

Final Cost Matters

Parents also need to look closely at the total cost of each college (tuition, room, board, fees, books, travel) to make sure that they are comparing apples to apples. Then, subtract the amount of financial aid awarded to determine what the out of pocket expenses will be. Allison Dean of Financial Aid Preparation Services, and a former financial aid officer for U. Chicago, says "When students receive their financial aid award letters, they can be very confused.  I have seen some schools that appear to be covering the entire cost, but when looked at closely, they have actually added a parent loan (not guaranteed) or an alternative loan (not guaranteed) as a part of the package.  This is very deceiving.  Also, most schools do not include the cost of tuition, fees and living expenses on their award letters."

Your Offer Is Not Set In Stone

Colleges generally keep 10-15% of their overall financial aid pool in reserve for appeals. Call the financial aid office at the college(s) where you need more money, and ask about their appeal process and timeline. You will most likely need to write a letter outlining the reasons that you are asking for more money (loss of a job, better offer at another school, unforeseen medical expenses, loss of child support). Be ready to provide documentation to support your case. A college will usually come back with more money, but it will rarely be the full amount that you request.

Bridging the Gap

For many families, even after an appeal, there will be a gap between what they can afford and what they receive in aid. This means hard decisions, and in some cases, it can mean looking at outside loans. Make sure to ask the financial aid office at your desired college for their recommendations. They may have scholarships you can apply for, or approved lenders with good interest rates on loans. PLUS loans for parents are one option, but second mortgages and bank loans can often have lower interest rates. Private scholarships are plentiful in small amounts and can add up, but be sure to check the terms of your financial aid package before accepting outside scholarship money.

You are required to report all scholarship sources to your financial aid office, and many colleges will reduce your package by the amount of the outside scholarships. Remember that private scholarships are usually just for one year vs. college-based aid which will often be continued at a similar rate for four years.  Never pay for scholarship searches - Fastweb is a great free resource or ask your high school guidance office or local library about state and local scholarship programs.

Cristiana Quinn, M.Ed. is the founder of College Admission Advisors, LLC which provides strategic, college counseling and athletic recruiting services for students. www.collegeadvisorsonline.com.


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