Comparing Student Financial Aid Packages

When selecting a college, one factor to consider is the availability of student financial aid. Unfortunately, comparing student financial aid packages from different schools can be tricky. Here are eight tips to help ensure that you are comparing apples to apples when making this important decision.

1. Break down each school's student financial aid package into three parts: money that doesn't have to be repaid; loans that, of course, do have to be repaid; and work-related aid.

2. Check the repayment terms on any loans, including when loan repayment begins, how long you will have to repay the loan, and the interest rate on the loan.

3. Investigate the details of any work-related aid since it usually comes with strings attached. Be sure that you will be able to complete the required work or, in some cases, this aid may become a loan.

4. Determine whether each student financial aid package is renewable annually and, if so, for how many years. Also, identify any other requirements attached to each aid package, such as maintaining a minimum grade point average or graduating with a particular major.

5. Look at the cost of attending each college. Start with the cost of attendance figure that is usually provided along with the details of the student financial aid package. Find out how this figure is calculated and what is included and then make necessary adjustments or additions. Be sure to include all expenses, not just tuition, books and room and board. Take into account supplies, transportation (including to and from college), fees, entertainment, clothing, and personal items.

6. Now set up a table with the name of each college across the top of the page. On the left, list the following line items for financial aid revenue; non-repayable aid, loans, and work-related aid. Below that list the following line items for the cost of attendance (add or delete items as you desire): tuition, books, room and board, supplies, fees, entertainment, clothing, personal items, and total cost of attendance (which is the sum of the cost-of-attendance line items). And below that, add a line item for the funds that you and your parents can provide. Also, note whether each financial aid package is renewable and any other requirements attached to the aid. Fill in the figures for each line item for each school.

7. Total the cost-of-attendance line items for each school and subtract the funds that you and your parents can provide to arrive at an "aid needed" figure for each school.

8. Compare the aid needed figure for each school to the total student financial aid package offered by the school. Be sure to consider the aid breakdown, especially how much won't have to be repaid since this is more desirable than loans. Also, estimate how much debt you will have at graduation at each school and how the debt terms compare.

Obviously, financial aid is only one factor to be considered as you choose your college. Other factors must be given equal or, perhaps, more weight. Nevertheless, taking a clear-eyed look at the available aid can pay off in the long run.

Sources:

Christina Couch, www.bankrate.com, Comparing college financial aid packages

www.princetonreview.com, Comparing Award Packages

Duane Van Bergen, www.nasfaa.org, Comparing Financial Aid Packages