Reviewing Your College Financial Aid Awards
Financial Aid Awards Are Confusing for a Reason.
Did you read the article that talked about how financial aid award letters can be very confusing to families, and how many colleges are borderline deceptive the way they structure their award letters:
- Manipulating the Total Cost Of College
- Not showing the Expected Family Contribution (EFC) on the award letter
- Giving a grant or scholarship in the first year, and then removing it in subsequent years
- High-cost college PLUS Loan maneuvering
Well, earlier this week I received a request from one of my clients to help him understand four award letters that he recently received.
He was quite adamant that these awards were beyond confusing.
Wow, was he right!
The four colleges in question: Furman University, Rollins College, College of Charleston, and the University of the South (Sewanee) together used all each of the above four deceptions; making it virtually impossible for any family to compare and make decisions.
As a matter of fact, without my trusty award letter analyzer, it would have been difficult for me to compare the schools to determine which one was giving the best deal.
To begin with, none of the four schools reported the family’s Expected Family Contribution (EFC) on the award letter. In this case, not having an EFC on any of the award letters was not such a big deal to me, but can you imagine a family trying to understand which award is best without an EFC?
Then to make it even worse, two of the colleges gave an itemized listing of their costs, while the other two only listed their tuition and room & board cost.
So let me scrutinize each college award to give you an idea why it’s so very important for families to have an expert analyze their financial aid award letters carefully to find which college is offering the best college deal.
Furman listed their awards appropriately for a total of $40,872, but neglected to detail their costs. They mention in the written paragraph below the awards that their tuition, fees, and room & board total $59,600, but neglect to itemize the other costs, such as books, supplies, transportation, computer, health care, and other personal expenses. How is a family supposed to know their true out-of-pocket cost (let alone compare other colleges) without these costs?
For a CCFS® (Certified College Funding Specialist) the answer is in the fine print. Furman goes on to mention that the family may also apply for a PLUS loan of “up to” $22,712. This is the family’s true out-of-pocket cost to attend Furman. A far cry from the family’s EFC of $4,460, so not a great deal, right? To arrive at Furman’s total cost of attendance, you merely add the award amount of $40,872 + $22,712 in PLUS loans, or $63,584. Now you can compare Furman’s cost and award with the other schools.
Rollins has a two-page award letter. Why, I have no idea. They could easily design it for one page, and make it easier to read at the same time. Both their costs and their awards are itemized appropriately, but spread over two pages in different formats and difficult at best for families to comprehend and compare. Again, there is no stated EFC, but we know from the above analysis that the family’s EFC is around $4,460. When you subtract Rollin’s total award amount of $36,866 from their total cost of attendance of $67,220, you arrive at the family’s true out-of-pocket cost is $30,354. Almost $8,000 more than Furman.
College of Charleston
Of all the award letters, the College of Charleston is the easiest to read. And their total cost of attendance is $27,944, which is the lowest of all four colleges. Whether the student really wants to attend the College of Charleston is a question that goes far beyond money, but the total cost of attendance is half the other colleges. However, so is the award offer. At $11,865 in total awards, the family’s true out-of-pocket cost is $16,079 ($27,944 - $11,865) to attend the College of Charleston. A better deal than Furman, or Rollins, but still a lot of money for a family with an EFC of $4,460.
University of the South (Sewanee)
Last, but not least is the University of the South (Sewanee, SC). Sewanee has a simple one-page award letter, but it is a bit difficult to comprehend at first glance, especially for families! Sewanee states that their total cost of attendance is $54,500, but again they neglect to itemize the other costs, such as books, supplies, transportation, computer, health care, and other personal expenses.
A quick trip to the University of the South website (http://admission.sewanee.edu/) reveals that their estimated annual indirect expenses are $3,200. This makes their total cost of attendance $57,700 ($54,500 + $3,200). When you subtract the total awards offered of $42,350, the family’s true out-of-pocket cost to attend Sewanee is $15,350.
The bottom line is the University of the South (Sewanee, SC) is the least cost to the family of all four colleges. But you tell me, how would any family be able to decipher that when comparing these four award letters side-by-side?
It’s apparent to me that college’s today may not actually want families to understand the bottom line. Right? They could very easily make standardized award letters that are easy to read, such as:
Total True Cost of Attendance
Total Scholarships & Grants
Family Cost to Attend
Stafford (student) loans
PLUS (parent) loans
How’s that for simple and easy? Anyway, families don’t know what they don’t know. If you received a college financial aid award letter that is confusing, and hard to understand, contact me immediately firstname.lastname@example.org.
Picking the right college at the right price can be a difficult decision, and could cost you a ton of money trying to do it yourself.
Award letters can be very confusing, there is no uniformity to them (until 2022) and not understanding your funding plan for all four years gets most families in trouble. This is one of the top reasons why 7 of 10 families have student loan debt and the numbers keeps climbing above the 1.6 TRILLION dollar amount from the latest report in 2020.
AND LEAVE TONS OF MONEY ON THE TABLE.
Great news, you always have options and I will outline two.
First, If you are the a veteran (sent 2 or more kids to school), and only applied to three in-state schools or someone who wants to spend 20+ hours researching each offer and double checking your financial aid paperwork, you can probably figure it out.
If you don't have the time or expertise, let our team or someone like us help you navigate your awards and probably get you more money.
If you have questions about your financial aid award, please email me and we can see if you are eligible to get more money!
Over 10 years, we have found about 50% of the families leave money on the table at their top 3 universities. Think about it...$1,000 is really worth $4,000.