Reading a Financial Aid Award

Spring is the season for colleges to send out Financial Aid Award letters to the students accepted for next fall’s term. As you will find out, they come in all shapes and sizes. There are many factors that go into determining the Award amount, starting with the Expected Family Contribution calculated by the information submitted on the FAFSA form. The college’s Cost of Attendance minus the EFC is the family’s need.

That is the MOST you be offered in the award letter. If they meet your need, it’s considered to be 100% met. Most don’t though. Each award letter is broken down into 3 categories:

1. Scholarships, Grants and Remissions – Money not to be paid back. 2. Loans – Student and sometimes Parent PLUS – Debt to pay back. 3. Work/Self Help – Earned money for college costs.

All of these numbers are added together to determine how much of the need it covers. One key reason for choosing the Federal Work/Study job – the income you earned does not get added to the FAFSA as income the next year. Since 50% of earned income for a student is added to the EFC, this job has better benefits than a regular job during college.

I have added a few samples of Financial Aid Award letters so you can see how they layout their aid package and see how far apart some can be.

Example 1:

Example 2:

Example 1 describes the award very well. A family knows what amount are scholarships and grants that do not require repayment, and what amount are loans that will need to be repaid. You are on your own to know which loan does not accrue interest and which does. There is no mention of a Federal-Work-Study job so a call to

the financial aid office is in order. The Expected Family Contribution is listed so you know the amount that used when coming up with the aid package. One thing not listed is the Cost of Attendance for the 2015-2016 year ($47,340). Your net cost is not known.

Example 2 describes things even better but not perfect. They have included all the financial aid categories in Example 1 plus the Federal-Work-Study category. The only thing missing is the Expected Family Contribution.

Lastly, here is the best layout of financial aid that we have received. The University of Dayton has a unique way of assigning financial aid. They calculate a “level” tuition amount so it makes comparisons difficult. Here is their award letter.

Page 1 lets you know your total billable cost for the first year without loans or FWS job. They also let you know what your net tuition cost will be for all four years. Other costs will go up but the tuition is set. In addition, they remind you that you earned a

textbook scholarship worth an additional $4,000 over 4 years and a $3,000 Study Abroad scholarship. (It needs to be taken into account when comparing total cost with other schools.)

Page 2 gives further details. They lay out your 4 year costs assuming on campus for the first 2 years. Two drawbacks are the lack of detail on Federal Loan options available and FWS job information for your specific case.

To summarize, each award layout you get will be different. The key is coming up with the following numbers at each school:

1. Net cost of attendance without loans or Federal Work Study job. In this case, Dallas is $17,740, Saint Louis is $24,126 and Dayton is $25,430 (right off the sheet, no calculation needed). If you can, determine what all four year’s costs will be for future planning…

2. Decide what other financial aid your family will use. If loans, make sure of the details. How much is subsidized? What is total amount available? If Federal-Work-Study, is it guaranteed employment? How many hours?

3. Lastly, given add or subtract other costs like books and study abroad to see what that ends up costing the family.

This is only one part of the information needed to a complete decision. Many other

factors may play a bigger role is college selection. In our case, we ended up wanting a school with Chemical Engineering and Dayton was the only one that had that option. The college tour iced it and not because we visited on a frigid February morning…

Dayton will be home for our youngest for the next 5 years (One year of Co-ops).