Financial Aid: How To Interpret Your Award

CNBC: “A school’s financial aid offer typically maps out your expected family contribution and what scholarships or need-based aid you qualify for, not only in the first year but throughout your college career … At public, four-year institutions, tuition plus room and board for the current school year hit $21,370, according to the College Board. At four-year private universities, the cost was more than double that: $48,510, on average … The first thing families should do is take the time to understand the financial aid award letter — particularly the difference between scholarships and loans.”

Ashley Boucher, a spokeswoman for Sallie Mae, which provides loans to students, explains: “It will show free money, like scholarships and grants, and borrowed money, like loans. Not every offer is created equally. If you compare a package that has a higher percentage of loans, it might make sense to take a smaller package that has more money that doesn’t have to be repaid.”

“To get a better sense of your total cost, also consider books, supplies and transportation costs … Note the terms of the aid being offered. Is it renewable for all four years, and what is the minimum grade point average you have to maintain? A school that seems more generous initially might offer less funding down the road … Schools are often receptive to appeals for more aid; they just don’t advertise it. The best way to make such a request is to write a letter to the school’s financial aid office.”