May is quickly approaching, which means that you need to send in a sizeable down payment to reserve your spot at a college stat. But because it’s kind of last minute, you’re struggling like Britney Spears in 2007. Your financial aid letters are a little more complicated than you thought they’d be. Can you actually afford to go to any of the schools that accepted you? Thankfully, we have an entire section that breaks down the financial aid letter for you, but why not get some extra advice, courtesy of Justin Bieber?
If student loan debt were your boyfriend, it’d never let you go. That’s why it’s important to understand what you’re signing up for when you accept your financial aid offer. If you know what you’re getting yourself into, you can probably shake your debt, a classic stage five clinger, before you reach retirement.
First things first, all awards are not created equal. Colleges aren’t required to follow a specific format for their financial aid letters, so they look different from college to college. Once you finally figure out where the offer is on the page, there’s a ton of unfamiliar terminology that has you like...
Before trying to decipher your financial aid letter, you should first calculate the school’s total cost of attendance (COA). This figure represents how much it would cost you to attend the school for a year. Some schools will estimate the COA for you and include it on your financial aid letter. If your school does this, take into account that the figure may not actually include all costs (transportation to and from college, for example), and it might not be an exact estimate.
The COA should include tuition, room and board, estimated book costs, travel fees, and living expenses. You’ll have to calculate your own COA, whether you received one on your financial aid letter or not, according to your lifestyle and needs. Some fees may not apply to you. If you’re planning on living at home, for example, you don’t need to pay room and board. You might not need a meal plan either.
Some students, on the other hand, have additional costs. If you’re expecting to spend money on leisure activities or other expenses, add them into your COA. If you’re going away to college, for example, are you planning on flying home a lot? Maybe you hope to purchase a pet monkey? Are you trying to impress the next Selena Gomez with fancy dinners?
When you calculate your COA, don’t freak out right away, even if it seems expensive. Your financial aid offer will probably help you pay your college bills. Your next step is to look for the total amount of aid that was offered to you. You can find that figure on your financial aid letter. Subtract your financial aid award from the COA to find out the net cost of a school, or how much you need to pay out of pocket. If the net cost is sizeable, the high life might not be attainable for you at this college. It might be wise to pick a school with a lower net cost.
But not so fast. Don’t nod your head yes when you want to say no.
Even if you have calculated your COA and net cost, it’s best to really examine your financial aid offer and read the fine print on your award letter. Financial aid letters divide their total offers up so that you can see where the money comes from. Sources include the federal government, state government, and the school itself. Some of this money is given to you, no strings attached. Some of it may need to be paid back. It’s important to learn the difference before you realize that after graduation, you could be starving, you could be homeless, you could be broke. Okay, okay, so that’s a little dramatic. The point is, understand the types of financial aid you’ve been offered.
Federal loans need to be paid back as soon as you leave school or drop below half-time enrollment. Some may come back to you with a vengeance. Standard monthly payments are tough to make on time if you don’t get a job right out of college.
And hey yo, interest rates. My mama don’t like you, and she likes everyone.
Scholarships and grants, on the other hand, don’t need to be paid back. Ever.
Where are you now that I need you?
Work-study is the best of both worlds. This program allows you to gain work experience and money for midnight pizza runs. Most positions are on campus. Ideally, they prepare you for jobs in the field you are interested in. If your financial aid letter indicates you are eligible for federal work-study, act quickly before on-campus positions fill up.
If you have more than one admissions offer, compare your financial aid offers side by side. If your first-choice school isn’t meeting your needs as much as your other options, there are actions you can take. You might be able to make an appeal to the financial aid office. Otherwise, it’s important to choose the school that is best for you academically and financially.
National Decision Day is May 1st. As soon as you have made the final decision on the offer that is best for you, send in a deposit. College is calling. You’ve got this. We belieb in you.