comparing college financial aid offers

In April, many colleges and universities begin sending offer letters to students who have been accepted for their incoming freshman class and have applied for financial assistance. Offer letters list the cost of tuition and fees plus the amount of financial aid available through the school. When you've been accepted and receive financial aid offers from more than one school, you need to compare the offers, make a choice, and accept the offer that best fits your needs - and your budget.

How do you compare offers? Follow these guidelines and make a list of pros and cons of each school and the key reasons for your decisions. Most families need to consider the annual net cost of attending each school and the annual cash outlay required of the family. To figure these out, you can make a chart listing each school and include the following:

(A) Estimated Annual Expenses

• Tuition
• Fees
• Room
• Board/meal plan
• Travel
• Estimated price of books and supplies
• Personal expenses

(B) Total Gift Aid (aid that does not need to be repaid)

• Grants and scholarships
• Other gift aid

(C) Net Price = A - B

(D) Work Study / Job Offers

(E) Loans to be Repaid

• Stafford Loans
• Perkins Loan
• Other student loans

(F) Cash Outflow = (C - [D + E])

Once you've completed the chart, consider the pros and cons of each school along with the financial considerations. Consider the nontangible factors (your feelings about the school and the environment) as well as the tangible factors (cost, course offerings). Listen to your parents but realize that the decision is ultimately yours.

Source: ACT's News You Can Use
Posted: 3/31/2009