What to Know About the FAFSA Changes

Each year, families seeking need-based financial aid to help pay for college fill out the Free Application for Federal Student Aid (FAFSA). Typically, this form opens on October 1st—right around fall application deadlines—but the FAFSA is undergoing some substantial changes for the 2024-2025 award year. 

These changes are due to the FAFSA Simplification Act enacted in 2022 and will go into effect beginning in the 2024-2025 award year. 

Overall, there will be fewer questions on the new, simplified FAFSA (the old FAFSA had more than 100 questions, and the new FAFSA will have less than 50), and the formulas that determine a family’s eligibility for aid have been updated for the first time in a long while. Other changes and adjustments throughout may impact your family’s experience of filling out the FAFSA as well as financial planning for college. 

When filling out the FAFSA for next school year, here are 8 changes to have on your radar:

A Later Timeline

This year, the FAFSA is scheduled to open by December 31, 2023. This is expected to be a temporary change for this award year only, but the timing might impact this financial aid cycle. 

College financial aid offices will receive the FAFSA much later this year than in previous years, so families might receive their financial aid award offers later than anticipated. Everyone should have their financial aid results in hand ahead of May 1, 2024, but families might not have a lot of time to compare all of their options before making a final decision.

Because the timeline is later than usual, families should plan to fill out the FAFSA as soon as it opens. Some needs-based aid may only be available on a first-come, first-served basis. Submitting your FAFSA quickly can increase your chances of qualifying for more funding.  

Everyone Needs an FSA ID

An FSA ID is the username and password needed to log into studentaid.gov, where the FAFSA can be filled out. Previously, only the student and the parent filling out the FAFSA needed to register for an FSA ID before accessing the FAFSA. 

Now, anyone who is required to provide information on the FAFSA form will need their own FSA ID to access and complete their portion of the form. The Student Aid website lists these contributors as “the student, the student's spouse, a biological or adoptive parent, or the parent's spouse.”

Students will not be able to submit the FAFSA until every contributor has their FSA ID. 

The EFC is now the SAI 

Important FAFSA terminology and formulas are changing. 

The Student Aid Index (SAI) is replacing Expected Family Contribution (EFC). This calculation determines the amount of financial aid a student can receive based on their household’s ability to afford the cost of college.  

Like the EFC before it, the SAI is used to calculate need-based financial aid. A family’s need is determined by:

SCHOOL’S COST OF ATTENDANCE (COA) - STUDENT AID INDEX (SAI) = FINANCIAL NEED

The SAI and EFC are similar, but the SAI differs in key ways for many families. To learn more about the new SAI methodology, check out this guide from the Department of Education. 

Students Can Send the FAFSA to 20 Colleges

Students can list more institutions, up to 20 schools, on their online FAFSA form. (Those filling out the paper PDF version of the form are still limited to 10.) 

Do you need to apply to 20 schools? Most likely not! If you’re curious about how to build your college list or how many schools you should apply to, check out our blog post on Building a Balanced College List.

The FAFSA is now available in more languages

This is a huge win for accessibility! Previously, the FAFSA was only available in English and Spanish. Moving forward, families can access the FAFSA in the 11 most commonly spoken languages in the US. 

Pell Grant Expansion

The Pell Grant is need-based financial aid determined by poverty guidelines, family size, and household income. Different from a loan, the Pell Grant does not need to be repaid. 

Under the new FAFSA, more students will qualify for the Pell Grant depending on their family circumstances and their SAI. 

If a student’s SAI exceeds the maximum Pell Grant award, they can still receive a partial grant depending on how their family size and household income relate to poverty guidelines. Additionally, the minimum possible SAI is now  -$1,500 where the old EFC metric stopped at a minimum of $0. 

Changes for families with more than one child IN college 

Previously, families would receive a “sibling discount” in instances where more than one child attended college simultaneously. The new methodology no longer considers the number of family members attending college at the same time when determining financial aid. 

This change means that families with multiple college students could receive less aid for the 2024-25 school year—even if those students are not filling out the FAFSA for the first time. However, schools can use their own institutional funds to adjust financial aid packages at their discretion to offset these new costs.

Changes for divorced families

The new FAFSA will use the income of the parent who provides the most financial support in divorced households. Previously, families reported the income of the parent the student lived with for most of the year.

Action Steps

While families wait for the FAFSA to open, here are some steps you can take to prepare. 

• Have a family conversation about financial fit - Make sure everyone is on the same page about your family’s budget for college to avoid unpleasant surprises later on. Here are some blog posts on financial fit to help inform your discussion:

• The Scoop on Outside Scholarships

• How Can I Get More Merit Aid from Colleges?

• Measuring a College’s Financial Generosity

• Create your FSA ID - Everyone contributing to the FAFSA can set up their FSA ID account before the FAFSA even opens. It can take a few days for the FSA ID to process, so setting this up ahead of time will save you time once the FAFSA opens.

• Fill out the CSS Profile (if necessary) - The CSS Profile is a separate financial aid application in addition to the FAFSA. More than 200 colleges require the CSS Profile to distribute institutional aid. Some colleges will need both the FAFSA and the CSS Profile to be considered for financial aid. Note: there is a fee for each college (the irony of paying to apply for financial aid is not lost on us).

FAFSA Tips & Tricks

There are many steps to completing a college application: writing essays, filling out application questions, creating the activity list, asking for letters of recommendation, setting up an application portal after submitting… and we haven’t even gotten to financial aid!

The financial aid application season runs at the same time as the college application season, beginning on October 1st of each year with the opening of the FAFSA (Free Application for Federal Student Aid). While students are keeping up with their college applications, there are also a lot of steps for students and parents to follow to complete the financial aid process.

Here are some answers to commonly asked questions to help simplify the FAFSA process:

WHAT DO I NEED TO FILL OUT THE FAFSA?

Get organized before you file your financial aid documents. Here’s a list of the items parents and students will need to successfully fill out the FAFSA:

• Your FSA ID - An FSA ID is a username and password that allows students and parents to sign the FAFSA electronically. Both the student and the parent filling out the FAFSA must create an FSA ID, and you will need these before completing the FAFSA. You can create an FSA ID before the FAFSA opens in October. You will use the same FSA ID every year the student files the FAFSA, so make sure to keep up with it!

• Your SSN - If you are not a US Citizen, but meet certain eligibility requirements for federal financial aid, you will need your Alien Registration Number.

• Your Federal Income Tax Return - Parents and students (if the student filed federal income taxes) will use tax information from two years prior to the fall the student plans to enroll in college. For example, if a student plans to begin college in Fall 2023, their family will use tax information from their 2021 tax return.

• Records of any untaxed income - For example, child support, interest income, or veterans’ non-education benefits.

• Records of your assets - For example, savings and checking account balances, records of investments, stocks, bonds, and real estate (excluding your primary residence).

• List of schools you are applying to - You should go ahead and send the FAFSA to colleges even if you haven’t been accepted (or even applied) yet. You can always remove a school if you decide not to apply, but you could miss out on financial aid opportunities if you wait too late to add a school.

WHEN IS THE FAFSA DEADLINE?

Just like colleges set their own application deadlines—and one college can have multiple application deadlines—financial aid deadlines can also vary by college. Check with each school’s financial aid office to see their FAFSA deadline. Keep an eye out for any early “priority” deadlines or FAFSA deadlines associated with different application types like Early Decision or Early Action. Some deadlines can be as early as November 1st!

Make a list of all the financial aid deadlines and determine which college has the earliest. Aim to file the FAFSA and submit it to all colleges on your list by that date. Or, better yet, try to file your FAFSA by Halloween to get it out of the way!

WHAT IF I AM APPLYING TO MORE THAN 10 COLLEGES?

You can only list up to 10 schools at a time on the FAFSA, but there is a workaround for students with longer college lists. Within a few days of filing the FAFSA, you will receive an emailed copy of your Student Aid Report (SAR). The SAR is also sent to the colleges listed on the FAFSA.

To send the SAR to additional schools, log back into your FAFSA and select “Add/Update Schools.” Remove schools from your list—don’t worry, they’ve already received your SAR—and add new schools. Submit the corrections, and the new schools will then receive your SAR. Just remember that if you had to make any corrections to your actual FAFSA that you add back the schools you deleted so they get the updated version as well!

WHAT IS VERIFICATION?

About one-third of FAFSA applicants are chosen for verification to determine the accuracy of what’s reported in their FAFSA. Don’t assume you’ve done anything incorrectly! You will be notified in your SAR about verification and contacted by the individual colleges to provide documentation like items from the list above. Be sure to follow instructions by the college’s deadline!

WHAT IS THE CSS PROFILE?

The CSS Profile is an additional financial aid application that is different from the FAFSA. It is required by more than 200 colleges and is used for institutional aid rather than federal aid. Some colleges will require both the FAFSA and the CSS Profile to be considered for financial aid. You complete the CSS Profile through College Board (yes, the SAT and AP people). There is no limit to the number of colleges you can list on the CSS Profile, but there is a small fee for each college (the irony of paying to submit an application for financial aid is not lost on us).

WHAT ABOUT FINANCIAL CHANGES?

If your financial situation has decreased since the 2021 tax year, you will still use your 2021 income tax returns when filing the FAFSA. Then, contact the colleges where you have sent the SAR to explain and document your change in income. The college may have a process in place, like an additional form for you to fill out. Officials in the financial aid offices can assess your situation and may adjust your FAFSA form or financial aid award.

If your situation changes after you file the FAFSA, you cannot update the FAFSA itself with new information. Similar to above, contact the colleges on your list to explain your family’s situation and follow any steps to request an adjustment to your FAFSA.

Don’t let the FAFSA process intimidate you! Check out our other free resources to simplify financial aid:

• Regular webinars on the 10 Keys to College Affordability

• The Inside Scoop Blog - All Financial Aid Posts

• College Planning Simplified Podcast

  • Episode - Financial Aid & Affordability with Jeff Levy

Scholarships 101: Measuring A College's Financial Generosity

This is Part 3 of our 3-part Scholarships 101 series. In Part 1, we covered our thoughts on private scholarships. In Part 2, we covered how students can position themselves to earn more merit-based financial aid.

At Advantage College Planning, we have a thriving work book club. Together, we read about 6 books a year (yes, even during application season). Most are related to college admissions, but some aren’t (we all enjoyed Glennon Doyle’s Untamed), and right now, we’re reading Mindful Admissions by Laurén Carter.

One of our book club picks in 2020 was Jeff Selingo’s Who Gets In and Why. In his book, he coins the idea of colleges as “buyers” or “sellers.” Summarizing from his website, colleges that are “sellers” have plenty of competitive applications to choose from to fill a class. They don’t need to use financial aid as any sort of incentive to attract admitted students into accepting their acceptance. These schools may still offer financial aid, but maybe it’s need-based only or to a very small percentage of students. Simply put: they can be generous with their financial aid (especially when we’re talking about need-based aid), but they may not be generous to all families or to your family.

Colleges that Selingo terms as “buyers,” on the other hand, take a different approach to awarding financial aid. They may award larger scholarships to attract competitive students to attend their college. Or maybe they award generous merit aid to students with little or no financial need, which can be a welcome relief to families who won’t qualify for much or any need-based financial aid but are still facing a hefty tuition bill.

Whether or not you like Selingo’s terminology, an important piece to understanding the financial aid puzzle is understanding a college’s financial generosity. Knowing which colleges award financial aid generously to which students will help your family determine if a college is a good overall financial fit.

Here are some tools for measuring a college’s financial generosity:

NET PRICE CALCULATOR

Any college or university participating in a federal financial aid program is required to have a Net Price Calculator accessible on their website. Filling out this calculator will give you an estimate of what your family can expect to pay for one year of college at that institution based on individual factors like your family’s income and your student’s GPA and/or test scores.

A net price calculator only gives an estimate, but it’s a personalized one. That’s important because the definition of financial generosity will vary from family to family. Harvard, for example, awards full financial aid packages to students whose families earn less than $65,000 per year. That’s extremely generous for those families and life-changing for those students. Filling out Harvard’s Net Price Calculator would let you see if Harvard is a financial fit for your family too—provided it is also an academic and social fit!

Pro Tip: Sometimes, a Net Price Calculator will let you skip a lot of the financial data entry if you know your Expected Family Contribution (EFC). You can get this number through the Federal Student Aid Estimator.

COLLEGEDATA.COM

A college profile’s “Financials” tab on CollegeData.com is my favorite tool for understanding how a college awards financial aid. This page is packed with information and clues about a college’s financial generosity. Here’s just a snippet of the profile for Wofford College, a private liberal arts college in South Carolina:

Let’s look at what we can learn from Wofford’s profile. Around 85% of applicants in the 2020-2021 cycle applied for financial need and around 72% were found to have financial need (meaning their EFC was less than the total cost of attendance a Wofford).

100% of applicants who had demonstrated need received financial aid. That’s great!

Wofford met the full need (not the same as the full cost of attendance!) of around 44% of students. Hmm. Is that good or bad? Let’s see… On the one hand, it could be higher, but if we look at schools that are similar to Wofford, it’s not too bad (Elon University - 19.7%, Furman University - 51.4%, Presbyterian College - 34.4%).

Average percent of need met is 90%. That’s very good! But remember—this doesn’t mean 90% of the total cost of attendance is met. It’s an average of 90% of each family’s demonstrated need (that’s the total cost of attendance minus the EFC).

College Data lists out the average award and breaks it down a step further so you can see how much of it is need-based gift (scholarships, grants, etc… based on financial need) and how much of it is self-help or work-study.

Finally, the profile lists merit-based gift awards so you can see if the college awards merit-based financial aid to students, even students who do not qualify for any need-based aid. And if they do award non-need-based merit aid, how much and how frequently. Compared to many colleges, Wofford does pretty well here!

Further down the page, College Data breaks down the same information for the entire school instead of just freshmen. It also shows the percentage of students taking out loans and the average student loan debt of a recent graduating class.

Like I said, my favorite tool!

COLLEGE FINANCIAL AID OFFICE

I’ve mentioned it in every part. of this series so far, but a college’s financial aid website and their office are a great tool for getting any additional questions answered about financial generosity at any point during the college planning or application process. Here are some financial generosity markers to look out for as you’re learning more:

• Outside Scholarship Policy - I covered this in Part 1, but some colleges will reduce a student’s financial aid package if that student is bringing private outside scholarships with them. It’s important to know this information ahead of time! And if the college does reduce a financial aid award, it’s important to know how the package will change. Ideally, they would reduce loans first before grants and other gift aid.

• Loan Limits - Some colleges are starting to limit or even eliminate loans from their financial aid packages. If that’s an important factor for you, look for language indicating some kind of policy around loan limitations.

• College Financial Health - Understanding the financial health of colleges in an underrated part of the college search process (it’s a lot less fun than seeing the dorms on a college visit or picturing yourself in the student stands on game day!). But a college generally has to have a healthy endowment in order to afford to be financially generous. In recent years, there have been major studies into the financial health of universities.

  • Edmit does a deep, deep dive for those of you who love data (for those of you feeling a little overwhelmed, it’s a lot of the same information as College Data, but let me direct your attention to the bar graph labeled Average Cost where you’ll see an average yearly cost of attendance by family income range. The section right below it, Financial Health, also gives a nice snapshot.

  • If I lost you with “bar graph,” Forbes has simplified things and given colleges a Financial Health Grade. Scroll down, and you can search by college name.

COLLEGE CONSULTANT

Your last tool for understanding a college’s financial generosity—and financial fit as a whole—is to speak with a college consultant. We have years of experience with the financial aid process and can help guide your family through the process from beginning to end.

If you want to take what you’ve learned in our Scholarships 101 series to the next level, look for one of our free 10 Keys to College Affordability webinars!

Scholarships 101: How Can I Get More Merit Aid From Colleges?

This is Part 2 of our Scholarships 101 series. In Part 1, we covered our thoughts on private scholarships. In Part 3, we’ll cover how to research the financial generosity of colleges.

College is expensive. Like really expensive. And while there are headlines in the news all the time about tuition costs rising or the student debt crisis, many families don’t think too closely about the cost of college until far too late in the college planning process.

Anyone in this industry will tell you that the hardest conversations about financial fit are with families whose students have been admitted to their dream school only to realize that they cannot afford it. We all wish for a time machine at that moment so we can go back and make financial fit a larger part of that student’s college search.

We begin the conversation around financial fit early because we want families to be prepared and to be preparing! Part of the conversation revolves around need-based financial aid, which is a separate process determined by a family’s income. But part of the conversation is about merit-based aid.

Merit-based aid is not tied to a family’s income but is instead awarded based on something that the student is bringing to the college, such as high performance in academics, athletics, the arts, or other extracurricular involvement. For the sake of this blog post, I’m going to be talking about merit aid determined by academic achievement. Sometimes referred to as “scholarships,” these are the types of scholarships we encourage our students to pursue as opposed to the private scholarships covered in Part 1 of this series. Here are a few reasons why:

1. Institutional Scholarships are often renewable for up to 4 years—As long as the recipient maintains certain requirements like a minimum GPA

2. Institutional Scholarships can be for much larger amounts—Up to full tuition, though larger awards will be more competitive

3. Institutional Scholarships are usually worth the time investment to apply—And many have no application at all because students are automatically considered when they apply to the college

We’re often asked how students can maximize their opportunities for institutional merit aid. Simply put: How can students get more scholarship money from colleges? Here are 4 tips to help students in their scholarship search:

RESEARCH COLLEGE FINANCIAL AID POLICIES

When researching college websites, students and families generally visit the Admissions page, the departmental pages for any majors they’re interested in, the Residence Life page, and so on… but don’t forget the Financial Aid page!

Colleges provide a lot of information about their school’s financial aid policies—including how they award merit aid and scholarships—on this section of the website, and families can learn a lot!

For example, some colleges are very clear that they do not award merit scholarships (like Georgetown with a total cost of attendance of $82,080 for 2021-2022) or only award merit aid to a very small amount of students (like Vanderbilt—2021-2022 cost of attendance of $79,538—whose merit scholarship recipients “represent the top 1% of all freshman applicants”). They focus funds on need-based aid instead.

Other colleges are more transparent about the way they award their merit scholarships. The University of Alabama (2021-2022 cost of attendance for an out-of-state student: $51,398) has a chart showing the automatic award out-of-state applicants can expect to receive based on their test scores and GPA, as do a number of other colleges.

If a college’s policies are not clear from their financial aid webpage, reach out to their financial aid office by phone or email. These knowledgeable staff members can be a huge help to families throughout the application process and during a student’s time at the college.

APPLY TO MORE “LIKELY” COLLEGES

We recommend students apply to a balanced list of colleges. That means there is a balance of likely schools, target schools, and reach schools in terms of college selectivity and the student’s academic profile.

A well-balanced list is important all the time, but few lists are perfectly balanced. More often, students will add more reach schools onto their lists, and as long as they are applying to enough likely and target schools that are a good fit for them, that’s usually okay! But if the question is “how can I get more merit aid from colleges?”, the college list needs to shift in the other direction.

Merit aid is hard to come by at colleges that are reach or even target schools for a student because the student is generally not in the top of that college’s applicant pool. If financial fit is a driving factor in your student’s college search process, encourage them to consider adding more likely colleges to their list. They have a better chance of being a more competitive applicant for institutional merit aid.

EARN STRONG GRADES AND TEST SCORES

For merit aid awarded based on academic achievement, colleges are looking at academic factors like GPA and standardized test scores. Students hoping to earn merit aid should work hard in the classroom throughout high school, and test prep for the SAT and ACT certainly won’t hurt their chances.

With the rise of test-optional policies, some colleges are not using standardized scores as a factor in merit aid, but other colleges either consider test scores or give students the option to have their scores considered for an opportunity to potentially earn more scholarship money. For example, at the University of Tennessee, an out-of-state student without test scores can earn an award starting at $4,000 per year, but a student with test scores can earn a minimum of $6,000 per year.

Colleges that are more transparent with their merit aid policies (like Alabama mentioned above, Tennessee, and the University of South Carolina) show that hard work can pay! Slight increases in GPA or standardized test scores can earn students several thousand more dollars per year to help pay for college.

FILL OUT SCHOLARSHIP APPLICATIONS

For some colleges, students are automatically considered for merit scholarships just by submitting an application for admission, or the scholarship application may be included in the general application. But other colleges have an additional scholarship application that is only accessible once a student has submitted an application or maybe even once they’ve been admitted.

Many students never bother to fill out a college’s scholarship application. It’s easy to skip this extra step because it comes along once a student is out of “application mode.” Students may not want to put in more time and effort if they haven't been admitted to a college yet. Even if they have been admitted, they may not be certain that’s where they want to attend. But this can be a missed opportunity!

Students should also review their college’s scholarship portal each year because their college might offer departmental scholarships to returning students. Students may be able to find additional funding after their freshman year!

DETERMINE GENEROSITY

The last tip is to look into which colleges are generous with their institutional dollars… and which colleges aren’t. Some colleges, like the ones I’ve mentioned above, put handy charts on their websites, but that’s not exactly the norm. Stay tuned for Part 3 of our Scholarships 101 series as we dive into how to determine the financial generosity of a college!

Scholarships 101: The Scoop On Outside Scholarships

This is Part 1 of our Scholarships 101 series. In Part 2, we’ll cover How Students Can Maximize Institutional Financial Aid. In Part 3, we’ll cover How to Research the Financial Generosity of Colleges

There’s a ton of college misinformation out there, and a lot of it has to do with how to pay for college.

Haven't we all heard stories about a neighbor’s cousin’s kid who got a full-ride scholarship just for being left handed or being a twin? Do those low effort/maximum reward scholarships really exist? 

And each year, new websites pop up promising "exclusive access to millions of dollars in unclaimed scholarship money!" For a fee, of course. 

Many families new to the college planning process think their student can apply for private or outside scholarships (that is: scholarships not coming from third-party organizations rather than the college itself or the state or federal government) to make up the difference between a college’s total cost of attendance and the amount financial aid doesn't cover. But it would be a mistake to ignore Financial Fit or rely on outside scholarships to cover that gap.

In our Scholarships 101 series, we’ll cover:

• Why applying for outside scholarships may not be worth a student’s time

• How students can maximize merit-based aid and institutional scholarships

• How to research the financial generosity of colleges

Today, we’ll answer:

Is applying for outside scholarships worth it?

Depending on the student, it probably isn’t. Here are a few reasons why:

The Time Commitment (part 1)

Embarking on an outside scholarship search is no small feat! Students have to comb through thousands of scholarships to determine: whether a scholarship is legitimate or spam, whether it is still active, and whether the student meets the eligibility requirements.

The Odds

Let’s mythbust the “millions of dollars in unclaimed scholarship money” claim. While there may be some scholarships that receive few (if any!) applications in a given year, they are often local scholarships for small amounts. More well-known scholarships or scholarships for large amounts of money often receive tens of thousands of applications each year, making them extremely competitive. In some cases, more competitive than your most competitive colleges! The Coca-Cola Scholarship, for example, receives around 100,000 applications but only awards 150 scholarships for an “acceptance rate” of around 0.15%!

The Time Commitment (part 2)

Say a student has already devoted hours to their scholarship search and built the perfect balanced list of competitive and less competitive scholarships to apply to. They still have to fill out the applications. That means filling out activity lists, writing multiple essays, sometimes conducting interviews, and… wait a minute… Doesn’t this sound a lot like the college application process?! Applying for scholarships can take as much time, work, and energy as applying to college!

The Return on Investment

After all the time and effort that goes into the scholarship search and application process, most scholarships are for fairly small amounts (a few hundred to a few thousand dollars) compared to tuition costs and most are not renewable after a student’s first year of college. So even if a student earns several scholarships for their first year, that student will need to “find” that money again for the following years. And there aren't as many scholarships available to returning students. Colleges may also alter a student’s financial aid package based on outside scholarships, so don’t assume that students can “make up the difference” with outside scholarships! Colleges and universities require students to disclose any private scholarships they receive, and many institutions then reduce their financial aid award by the scholarship amount. Every college is different, and some will first reduce loans before reducing grants/scholarships. Families will need to ask each college about their policy.

For the majority of students, outside scholarships are not the best way to pay for college. But for students who are tackling a scholarship search, here’s some advice:

• Use trusted scholarship search databases like Fastweb, CFNC (for NC students), or check with the high school counseling department to see if they keep a list. Your school counselor can be a great resource!

• Students have a greater probability of being awarded scholarships when they keep the scholarship search local. These awards can often be smaller but just remember: if you’re seeing that website banner flashing with Unigo’s $50,000 No Essay scholarship, so are thousands of other high school seniors.

• Check with a parent or guardian’s place of employment to see if they offer any scholarship programs for employees’ children.

• Study hard! Doing well in school and even on standardized tests can increase your eligibility for some outside scholarships as well as make you more competitive for merit scholarships coming from colleges and universities!

• Before putting in time and energy into applying for scholarships, check with the financial aid offices of each college on your list to see how they handle outside scholarships!

And for the record, from what I can find, there was once a scholarship for left-handed students… but even it was an institutional scholarship!

Decoding Your Financial Aid Package

We spend a lot of time talking with our students about finding the right fit. We encourage students to look for a college environment that fits them socially and academically. And we talk about which colleges have a price tag that fits their family’s financial situation. 

This is the time of year when all those conversations come to life. Most acceptance letters have flowed in and, with them, financial aid award letters. Award letters reveal a student’s financial aid package, showing the full cost of one year’s attendance, as well as any grants, scholarships, and loans that can be applied to a student.

Financial aid award letters can be confusing. It isn’t always easy to tell what is free money (scholarships and grants) and what is borrowed money (loans that will have to be paid back). And because few letters look exactly the same, it can be difficult to look at all of your options and be sure you’re comparing apples to apples instead of oranges.

Let’s take a look at what’s usually included in a financial aid award letter, clear up some confusion about types of money, and address steps you can take if your financial situation has changed.

DECODING THE AWARD LETTER

Most financial aid award letters include the following information:

• Cost of Attendance (COA) - The price of one full year of school. This includes tuition and fees, room and board, and even estimates of other expenses like books and transportation. If the COA is not listed, try to find it on the college’s financial aid website.

• Institutional Grants - Free money that does not have to be paid back. Usually need-based.

• Institutional Scholarships - Free money that does not need to be paid back. Can be need-based or merit-based 

  • While students can apply for outside scholarships, these will not appear in a financial aid award letter from a college.

• Federal Work-Study - Earned money in the form of a part-time job on campus. It does not need to be paid back but is not paid upfront. 

• Federal Student Loans - Money borrowed from the federal government that is paid back with interest. Federal Student Aid explains the different types of loans and the amount you can borrow per year.

So what do you do with all of this information? 

You’re looking to determine the college’s Net Price.

The Net Price for one year of college is the full COA minus any free money. Remember, student loan amounts lower the COA in the short term, but you will have to pay them back over time and earned money (work-study) is paid to students over time to supplement their income.

COA - FREE MONEY (IE: GRANTS & SCHOLARSHIPS) = NET PRICE

The easiest way to compare financial aid award letters is to make a spreadsheet that compares each college and the types of aid offered. Make a copy of our template to use for yourself.

The difference between COA and any financial aid leaves families with an uncovered amount of money called a gap. This is the amount a family will have to pay from savings, outside scholarships, and/or private loans.

APPEALING YOUR FINANCIAL AID PACKAGE

If your financial aid package is insufficient or if your family’s financial situation has changed, you might consider appealing your financial aid package. It’s important to communicate these changes to colleges as soon as possible because they may be able to offer more money.

To appeal your financial aid package, you’ll want to contact each financial aid office to learn their appeals process. In many cases, parents will write a concise, polite letter that explains the special circumstances your family is now in.

How can we help?

We see our students through the entire college planning process, including navigating the waters after being admitted. If you have questions about your financial aid offers, get in touch with us so we can help!