Financial Aid: Is that all I get?
Award letters will arrive soon -- if you're not happy, don't panic.
By Jessica Seid, staff writer

NEW YORK ( - As important as the college acceptance is, the financial aid awards package determines whether a dream school can become a reality.

And parents should be getting those in the mail any day now.

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Student aid hit $142.7 billion for the 2004-05 academic year, according to the College Board, and is still growing. But that's not very reassuring if you are worried about making ends meet.

Plus, the package your school offers does not necessarily seal your fate.

"The first thing you want to do is sit down and breathe deeply," said Sallie Mae spokesperson Martha Holler. Then you can determine which award package works best for your budget and even hunt down more aid, if necessary.

The envelope please....

"All financial aid award packages are not created equally," said Sallie Mae Vice President Tom Joyce. "It is important to understand all of the aid's terms and conditions and to compare award packages on an apples-to-apples basis so you make an educated decision."

Aid packages include not only grant and scholarship money, which never have to be repaid, but also loans and work-study programs.

In addition, awards can vary widely for the same student since different schools assess financial needs differently.

First look at the cost of attendance of each school, suggests Kalman Chany, president of Campus Consultants and co-author of "Paying for College Without Going Broke."

Then look at how much of your award is "free money" and how much is "cheap money." How much aid you get isn't as important as how much you have to borrow, Chany said.

"Subtract out the amount of grants and scholarships because that's gift aid that you don't have to pay back. Then see what's left, that's what you have to pay."

The next step is to determine if grants or scholarships are available for more than one year. If so, what conditions apply? If not, are any options listed for the following years? Remember that, unless otherwise stated, this letter applies only to the upcoming school year. If one school offers you a renewable scholarship, then that may be worth more to you than a one-year grant from another institution.

Holler also suggests looking for two things: 1) the conditions of the aid that has been offered. For example, do you have to declare a certain major, maintain a certain GPA or play a sport?

And 2) the date by which you have to respond. You should have about a month to decide if you want to accept any, or all, of the aid offered so take your time evaluating the awards package.

Look beyond the letter

Don't think you'll be able to meet the "expected family contribution?"

Don't panic, said Joyce. Parents with good credit history can borrow up to the total cost of undergraduate education including tuition, room and board, supplies -- less any other aid -- with a low-interest Federal PLUS loan, which is not need based.

If you don't qualify for a federal loan, private loan programs are also available although the interest rates and fees charged for private loans are generally higher.

Parents may also want to consider a tuition payment plan, which allows you make small payments over the course of the year, similar to monthly installments. This is an interest-free option that only requires a small administrative fee.

And it's not too late to look for other scholarships. There are still some "last dollar" scholarships out there, which are meant to meet the unmet need. An online database such as College Answer's Scholarship Search will help you find more scholarship opportunities.

Times have changed

If your situation has changed since you filled out the FAFSA last year, the Financial Aid office may be open to reassessment.

A loss of income, high medical expenses, casualty or theft loss or a change in your family status could affect the award.

After you receive your awards package, Chany suggests waiting a few days for the dust to settle before calling the school -- give yourself time to learn all that you can about how the institution came up with your family contribution, what numbers are important and what documentation you need.

For example, if you lost your overtime you will need a letter from your employer. Plus, by waiting a few days, "things will be less panicked and stressed at the aid office," Chany said.

Since the school will not withdraw the original offer or take away any of the money they awarded you, you really have nothing to lose. But, "this isn't Jerry Maguire -- you don't want to scream 'show me the money' at the aid office," Chany said.

Holler recommends "be pleasant, don't be aggressive and be honest."

Think like a sophomore

Orientation hasn't even started yet but it's never too early to start thinking about sophomore year and how you may be able to get more next year. For more on maximizing your financial aid chances in the year ahead, click here.


For the most lucrative college degrees, click here.

Click here to find the annual costs of any four-year college or university in the U.S. Top of page

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