Editor's Note: The scribe of this post is Samantha Kahn, a financial aid expert who has worked in a variety of institutional settings.
You're probably starting to receive award letters, or award notifications, from the Financial Aid Office at the colleges to which you've applied. These letters are automated and different programs print different information on them in varying styles, which can make them difficult to understand well enough to “compare and contrast.” Most colleges send the original letter via snail mail and post the award on their websites for you to access. When changes are made to your award, such as if you receive another scholarship or the name of an award is changed, those changes are usually only made online, though you may receive another award letter. The only one that is valid is the most recent.
The award letter includes all of the awards for which you are eligible at the time the letter was printed, including state and federal grants as well as institutional grants (that is, scholarships from the college), federal and institutional loans, and work-study. It may also include a category titled “PLUS Loan” or a line item titled “Finance amount.” However, the letter may not include anything like this category at all.
The first thing you must determine to really understand what your award is in relation to the expense of attending a college is the Cost of Attendance (COA). The COA is the total cost of attending the institution for one year, including tuition, room and board, books and supplies, transportation (between home and school), and miscellaneous expenses (ranging from a university t-shirt to toothpaste). The cost for each college will be different, and the COA for students living at home and commuting is different than for those living on campus or in off-campus housing (e.g. their own apartments). Note that the COA is a budget only and you may not spend as much as the budget allows. However, if you spend more, the college is not going to increase your budget just because you ask.
Note that not all universities' award letters include the COA on the letter itself. If that's the case, the booklet or brochure the college sends with the letter will list the COA and its elements, with the dollar amount estimated for each element (such as $600/semester for books). If they do not send a brochure, the cost of attendance will be listed on the financial aid pages of the website. Bear this in mind when it looks as though "Private" University #1 offers more aid than "State" University #1. The COA at "Private" is higher though it may cover less of the total cost.
After you have figured out what the COA at each university is, you can start looking at the awards. You want to look at them on a per semester basis. This is particularly the case when costs are skewed toward one semester in colleges that offer an “interim term,” between semesters, and bills for housing accordingly.
Some schools send award letters that list by category and some that list by term. A letter could look like this:
Award FA '07 SP '08 TOTAL
Pell Grant $1200 $1200 $2400
Stafford Subsidized Loan $1750 $1750 $3500
Federal Work Study $1500 $1500 $3000
Finance Amount $2500 $2500 $5000
GRAND TOTAL $13900
It could also look like this:
Award
Pell Grant FA07 $1200
Pell Grant SP08 $1200
STAFSUB FA07 $1750
STAFSUB SP08 $1750
FWS FA07 $1500
FWS SP08 $1500
Finance Amount $5000
GRAND TOTAL $13900
If you can't figure out the codes, they should be explained in the booklet/brochure or on the Financial Aid Office's website. Make sure you understand which awards are grants, which need to be paid back, which need to be earned through work. You may have to take additional steps to accept certain awards to actually receive the funds.
The difference between your awards and the total cost of attendance is what you and your family will need to either pay out of pocket or borrow, like with a PLUS (parent) loan. The college doesn't care how you pay the bill, and you can borrow some and pay the rest, either all at once or in payments if they have a payment plan (most do, with the first payment due in July or August before the first term begins). Questions about payment plans are usually handled by a third-party biller or by the college's Business Office. The phone number and website should be listed in the brochure and/or on the college's website.
At most colleges you can go online to accept or decline awards. Accept all of the grants; it's up to you whether you wish to accept the loans and work-study, if offered to you. One thing to understand about work-study, by the way: You're being offered wages for work, but you are responsible for finding a job and working the hours. If you do not find a job, you will not get those funds. Furthermore, make sure you understand whether or not your college will accept your work-study to pay for tuition, room, and board. I've worked at colleges that don't, so students with work-study had to come up with that amount to pay for tuition upfront, using their work-study earnings for the miscellaneous expenses.
I would suggest that you make a chart for yourself to compare awards at different schools. Make sure the chart includes the total Cost of Attendance as well as any amount not covered by grants, loans, or work-study, particularly if it means that you or your parents will have to borrow the difference. Do not expect that you will be able to cut corners on the COA. With the exception of off-campus housing, which can vary depending on how close you live to the college and how many housemates you have, the budget reflects the actual costs very well.
If a decision deadline is approaching and you have not received award letters from all the colleges to which you were admitted, contact the college with the approaching deadline and request an extension, explaining that you don't have information you need from another college. You'll probably get a week at the most. Then, after checking your account at the other college, contact them and ask when you might expect their award letter, explaining that you have a deadline at another college and you need their information so you can make an informed decision.
FinAid has good explanations of the different kinds of awards (such as Pell Grants, Federal Work-Study, and Stafford, Perkins, and PLUS loans) and how they work. To learn about awards specific to the institutions you're considering, you need to go to the websites for those colleges. If you have questions about an athletic scholarship, you should contact the coach. If you have questions about a scholarship that's based on your SAT or ACT scores and your GPA, you should contact Admissions.
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