How to understand your financial aid package

How to understand your financial aid package

There’s a lot to consider when weighing financial aid offers from different schools. Here's how to understand what you're getting.

Above, photo by Robert Kinlaw. 

This post is by Eric Johnson, the assistant director for policy analysis and communications in UNC’s Office of Scholarships and Student Aid. 

There’s a lot to consider when weighing financial aid offers from different schools. Take your time with the decision, and don’t be afraid to ask questions.

You’re making a big investment in both time and money, so get all of the information you need before making a commitment. Schools should be happy to answer your questions — they’re asking you to enroll, after all!

Focus on the bottom line

The price tag for different schools can vary a lot, and there are different kinds of money included in your financial aid. So it’s important to stay focused on the bottom line: how much are you going to pay, and how much debt will you be taking on?

Sometimes, a high-cost school might offer you a great scholarship, but still end up charging more than a low-cost public university. Or a college may promise generous aid, but include mostly loans that have to be paid back later.

Do the math and see how much you’re still expected to pay after aid and scholarships, and then compare the bottom-line cost at different schools.

Pay attention to the type of aid

Financial aid comes in different forms — grants, loans, scholarships, and work-study funding. Make sure you know the difference.

Grants and scholarships are free money; you don’t have to pay them back. Loans have to be repaid later, and the terms can vary a lot depending on the kind of loan. Work-study involves a campus job during your college term, letting you earn some of the money for school based on how many hours you work.

Most aid offers will label the different types, so pay close attention to the details. The more grants and scholarships, the better!

Know the real cost of school

College is more than just tuition and fees — there’s also housing, meals, books, and extra travel expenses. Some schools include all of these things in their financial aid budgets, and some don’t.

Likewise, each student’s personal costs may differ. If you live nearby, your travel budget might be lower than the school’s estimate. If you’re sharing an apartment with two roommates, your housing may be cheaper than the on-campus option.

Take all of that into account when looking at your aid offer. How much do you really need, and how much do you really need to borrow?

Cost matters, but so does value

Choosing the best value doesn’t always mean picking the cheapest option. You want to be at a school where you have strong odds of graduating, and where your degree will help you achieve long-term life goals.

There are times when spending more to attend a higher-value school may be a good idea. Looking at statistics across the country, students who struggle the most to repay college debt aren’t those who borrowed a lot to graduate from an expensive school, but those who borrowed a little and then dropped out without a degree.

Every accredited college is required to publish graduation rates. While these aren’t perfect predictors — statistics are not destiny, after all — they do give you some idea of how likely you are to successfully complete your degree.

Reapply for aid every year

Financial aid is recalculated every year, so you’ll need to fill out the FAFSA and any other paperwork your school requires each year. That’s so the aid office can keep up with any changes in your finances that might impact aid.

If things change, aid can change

Schools are trying to get an accurate picture of your financial circumstances, so if something big has changed — parental divorce, a major income shift, big medical bills — contact the financial aid office and let them know right away.

They can’t always make adjustments, but it’s always best to ask.

Ask questions!

Financial aid is complicated, and college is a big investment of time and money. Don’t be afraid to ask questions.

You can call or email the aid offices at any school you’re considering; they have counselors on staff dedicated to answering student and parent questions. They want to hear from you!

Here’s how you can contact the financial aid offices at UNC, Duke, N.C. Central and N.C. State.

Pressley Baird

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