Understanding the Financial Aid Letter
(NewsUSA) - For college-bound students and their families, the arrival of a school's financial aid award package means it's time to pull out the calculator and start budgeting.
However, with increases in federal student loan limits and hundreds of thousands in grant money, the decision to accept a financial aid award package should be easier than ever. The availability of free and cheap money, through scholarships, grants and low-cost federal loans, is great news for students as they look to cover the cost of college next year, but first it is important to know what you are getting into.
"Take your time to understand each item on your financial aid award letter so that you can compare award packages and determine which to accept," said Martha Holler, spokesperson for Sallie Mae, the nation's leading planning and paying-for-college company. "Looking at the bottom-line sticker price can be misleading. What's most important is the amount you will be expected to cover out of your own pocket."
Yet, despite the many financial troubles college can bring, the investment can pay a lifetime of rewards. According to the U.S. Department of Labor, jobs for those with bachelor's degrees grew by 1.8 million during the past 10 years compared to a loss of nearly 700,000 jobs for those with only a high-school diploma. According to the U.S. Census Bureau, graduating from college pays lifelong dividends with college graduates, on average, earning over $1 million more during their lifetimes than high-school dropouts.
So, once you receive a school's award letter, review it carefully, and keep the following questions in mind:
-; What are the enrollment requirements for grants and scholarships?
-; Is the award package for one year or all four years?
-; Can you maintain the required grade-point average?
-; Is student employment part of the financial aid package? If so, what types of jobs are available, and what rate of pay is typical?
-; If the package offers student loans, how much will your payment be after graduation, and are you willing to make that commitment?
Once you and your family have answered these questions, the next step is to respond as quickly as possible to the school. If you fail to meet the deadline listed in the award letter, you risk having the money given to someone else.
For more information on evaluating college financial aid awards packages, go to Sallie Mae's CollegeAnswer.com. With information provided in both English and Spanish, families can gain help on how to decipher financial aid awards packages with its award analyzer, a tool that compares awards packages side-by-side and gives an estimate of monthly student loan payments after graduation.