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Financial Aid for Parents

It is a great joy to every parent to see their child accepted to several colleges, but figuring out how to pay for their education can be quite difficult. In most cases, financial aid will cover at least a certain amount of the overall costs. The award letters differ in the way the present the information since they are not standardized, and parents or students who are not familiar with the terminology involved may get confused, finding it difficult to evaluate and compare the various offers.

The amount of the aids is different from school to school, and so is their composition. There are a few key elements that have to be compared in order to find the most suitable aid for you child. The first one of these is the cost of attendance. This is not just the tuition, it should include other items as well, like the room and board, student activity fees, the estimated cost of books, transportation, and any other fees that are required for attendance. You should carefully read through the award letters and any additional material you received with them to find all this information. Only by adding up all these sums will you get the true cost of attending to a particular college. Most award letters also include the expected family contribution, the part of college expenses that should be covered by the family. This is a sum determined by the government, and it is usually listed on the summary page of the aid package.

There are two main types of aids your child could be eligible for, gift aids and self-help. The first category includes scholarships and grants that don't have to be repaid, while the self-help consists of subsidized loans and work and study. The federal government provides several types of need-based aid like the Pell grant, or the Federal Supplemental Educational Opportunity Grant (FSEOG). After your child has filled in his application for financial aid, the government will decide based on the Expected Family Contribution whether he is eligible for this form of grant, and the amount he will receive. This will be indicated on the award letter. In addition to these, he may also be eligible for grants provided by the state government. The colleges and universities have their own aid offers that are often very attractive for the students and they can include both need-based and merit-based scholarships and grants.

The amount of the scholarships and grants you child can receive from the various colleges is the most important part of the offers, since this is basically free money. In addition to these, the students can also have access to federal loans like Perkins and Stafford (that comes in both subsidized and unsubsidized form) and work and study offers. While the latter will only cover a small amount of the overall costs, it is still worth considering because it doesn't count as income when calculating the next year's aid package. Besides, having a job that is related to the career the student wants to pursue will provide experience in that particular field, and help him connect to the college in the mean time. Some award letters will also list the Plus loan that parents can take out to help financing their children's studies. However, this loan is not need-based and it has a higher interest rate than the other available types with the parent being responsible for its repayment, so it shouldn't be considered as part of the actual need-based financial aid offer. After all these components are listed, most award letters will also indicate the unmet need, the part of the overall cost that is not covered by aid or family contribution. This is an important figure, and you will have to consider whether you or your child will have the funds to cover it if necessary, and from what sources.

When comparing the different aid offers, you should focus most of all on the content, not on their size. You should take first the overall cost of attendance for each college, then the amount that the family or the student has to cover out of their own pockets, that would include the expected family contribution, the Plus loans as well as the unmet need and lastly the loans you will have to take out, and compare each of these items. The best offer is the one that leaves you and your child with the least amount of debt, so naturally the aid packages that are mostly made up of scholarships and grants will weigh more in the balance. You may find that the biggest offer is not actually the best one, because it is mostly made up of loans, and leaves your child with large amounts of debt he will have to repay.

Every student should understand the terms and conditions that come with the various forms of aid before accepting them. Many of these require a certain level of GPA to be maintained, so make sure your child knows about this and is comfortable with it, otherwise it might be wise to choose a less demanding form of aid. Asides form the financial considerations, you should also make sure that the college or university you decide upon will be one where your child is happy, and that offers him or her a good start in the career he wishes to pursue.

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