Post by: COYD Staff
The May 1st deposit deadline is approaching, and many of you will be taking into consideration financial aid award letters to decide which university to attend this coming fall. In order to accurately compare the financial aid award letter, here are two things that so often get overlooked when comparing letters:
1. Double check the costs of attendance on the award letter.
Some financial aid award letters do not give accurate cost figures for each line item. Make sure to do some research and not accept every cost at face value. The biggest inaccuracy could be transportation costs. You can find out how much it would cost to go to and from your home and the university via Travelocity.com or Kayak.com. Also, consult the school’s website to get a more accurate description of the costs associated with attendance. The award letter rarely covers all costs that you will incur during the school year.
2. Know the difference between a scholarship/grant, loan, and work-study program.
– Grant: A type of financial aid based on financial need that the student does not have to repay. (i.e. Pell Grant)
– Scholarship: A form of financial aid given to undergraduate students to help pay for their education. Most scholarships are restricted to paying all or part of tuition expenses, though some scholarships also cover room and board. Scholarships are a form of gift aid and do not have to be repaid. Many scholarships are restricted to students in specific courses of study or with academic, athletic or artistic talent.
– Loan: A type of financial aid which must be repaid, with interest. The federal student loan programs (FFELP and FDSLP) are a good method of financing the costs of your college education. These loans are better than most consumer loans because they have lower interest rates and do not require a credit check or collateral. The Stafford Loans and Perkins Loans also provide a variety of deferment options and extended repayment terms.
– Work-study program: Program providing undergraduate and graduate students with part-time employment during the school year. The federal government pays a portion of the student’s salary, making it cheaper for departments and businesses to hire the student. For this reason, work-study students often find it easier to get a part-time job. Eligibility for FWS is based on need. Money earned from a FWS job is not counted as income for the subsequent year’s need analysis process.
**Definitions from www.FinAid.com.
Don’t give equal weight to the different types of aid when comparing the different letters. Obviously a scholarship is worth more to you than a loan.
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