Soon seniors across the land will start to receive their award letters. Some could have just applied to one or two colleges and comparing the cost of them could be straightforward. But many others have applied to multiple faculties and as they begin to receive the award letters they quickly understand that determining which university is offering the best financial help package isn't as clear cut as they had hoped. In this piece I will outline the correct way to compare and determine which school is offering the best package.
When comparing "College Financial Aid Offer or Award Letters" there are 3 key points on which to compare schools. First, Amount of "Free Aid", Amount of "Conditional Aid", and ultimately EFC or "Expected Family Contribution". Your job in comparing is to place help offered into these three buckets based on your special situation. For example there may be aid offers that you do not accept due to commitments required to get them.
Free Money: As the name suggests this is cash that does not have to be paid back. The most common source of "Free Money" are grants straight from the central government and the commonest of these is the Pell Grant which can go up to $5,500. The quantity of the Pell Grant shouldn't differ between faculties with the sole exception of a school whose final cost is less than the $5,500. In that chase the Pell grant would equal the C.O.A. Another abundant type of free aid is the scholarship. This will very probably be the source that modifies the widest. Colleges with large endowments typically offer scholarship awards to most students meaning the particular value of attending is noticeably less than the recommended price. This is also a sector where filing the FAFSA early can suggest all of the difference in the world deciding if and how much a student gets in bursaries.
Conditional Aid: This category is where you place aid that either needs to be paid back or earned As an example the Scholar loans and work study should be placed into this bucket... I mean actually, how much help is the school offering if they just allow you to take the Fed loan? Nothing! Work study is another one to look closely at. For most inward-bound freshman the increased responsibility of a job might not be desirable and the cash allocated to that aid should be moved into the expected family contribution.
Predicted Family Contribution: This will be mentioned on the award letter as either "EFC, Predicted Family Contribution, or AND loan suitability. Either way this is the amount your family and you will need to think up for you to attend school at that college. Because one school lists this as EFC doesn't mean that you can't take either a personal loan or the Plus loan to cover this cost. You can, but just remember that this is cash you have to repay. The positive loan starts repayment during school. While most private loans like the EdAccess student loan don't begin Principle repayment until after you've finished school.
When comparing "College Financial Aid Offer or Award Letters" there are 3 key points on which to compare schools. First, Amount of "Free Aid", Amount of "Conditional Aid", and ultimately EFC or "Expected Family Contribution". Your job in comparing is to place help offered into these three buckets based on your special situation. For example there may be aid offers that you do not accept due to commitments required to get them.
Free Money: As the name suggests this is cash that does not have to be paid back. The most common source of "Free Money" are grants straight from the central government and the commonest of these is the Pell Grant which can go up to $5,500. The quantity of the Pell Grant shouldn't differ between faculties with the sole exception of a school whose final cost is less than the $5,500. In that chase the Pell grant would equal the C.O.A. Another abundant type of free aid is the scholarship. This will very probably be the source that modifies the widest. Colleges with large endowments typically offer scholarship awards to most students meaning the particular value of attending is noticeably less than the recommended price. This is also a sector where filing the FAFSA early can suggest all of the difference in the world deciding if and how much a student gets in bursaries.
Conditional Aid: This category is where you place aid that either needs to be paid back or earned As an example the Scholar loans and work study should be placed into this bucket... I mean actually, how much help is the school offering if they just allow you to take the Fed loan? Nothing! Work study is another one to look closely at. For most inward-bound freshman the increased responsibility of a job might not be desirable and the cash allocated to that aid should be moved into the expected family contribution.
Predicted Family Contribution: This will be mentioned on the award letter as either "EFC, Predicted Family Contribution, or AND loan suitability. Either way this is the amount your family and you will need to think up for you to attend school at that college. Because one school lists this as EFC doesn't mean that you can't take either a personal loan or the Plus loan to cover this cost. You can, but just remember that this is cash you have to repay. The positive loan starts repayment during school. While most private loans like the EdAccess student loan don't begin Principle repayment until after you've finished school.
About the Author:
Timothy Odinaka is an Independent Financial Advisor, representing firms across the region and helping clients on their private loan, money lending matters as well as other financial planning matters. Thanks to his extenstive travel schedule, Tim is anticipating settle down.
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