Financial Aid Award Letters: The Deceptive Practices Colleges Don't Want You to Know
Every year, thousands of families are faced with the daunting task of making crucial decisions about their children's college education. One of the most critical pieces of information in this process is the financial aid award letter. Unfortunately, many of these letters are poorly written, difficult to understand, and misleading, making it challenging for families to make informed decisions. In this article, we will explore the importance of analyzing financial aid award letters and offer tips for families to make informed decisions.
Understanding the Importance of Financial Aid Award Letters
Financial aid award letters are crucial because they provide essential information about the total cost of attendance, the amount of financial aid offered, and the expected family contribution (EFC). These pieces of information help families compare different colleges and make informed decisions about which one is right for them.
Manipulating the Total Cost of College
Unfortunately, some colleges manipulate the total cost of college in their award letters, making it challenging for families to compare the true cost of attending different colleges. They may not include all of the costs associated with attending college, such as books, supplies, transportation, computer, health care, and other personal expenses. As a result, families may underestimate the true cost of attendance and make decisions based on incomplete information.
Not Showing the Expected Family Contribution (EFC)
The expected family contribution (EFC) is the amount of money that a family is expected to contribute towards college expenses. Some colleges do not show the EFC on their award letters, which can make it difficult for families to compare the financial aid offered by different colleges. As a result, families may end up making decisions based on incomplete information and may miss out on opportunities for financial assistance.
Giving a Grant or Scholarship in the First Year and then Removing it in Subsequent Years
Some colleges offer grants or scholarships in the first year and then remove them in subsequent years. This can be misleading for families, as they may not realize that the financial aid they are receiving is not guaranteed for all four years of college. As a result, families may end up with unexpected expenses in subsequent years, which can be difficult to manage.
High-Cost College PLUS Loan Maneuvering
Some colleges offer high-cost college PLUS loan maneuvering. This means that they offer families a PLUS loan of “up to” a certain amount, which can result in families borrowing more than they need to pay for college. This can lead to high levels of debt for families, which can be difficult to manage after graduation.
Analyzing Financial Aid Award Letters
Analyzing financial aid award letters is crucial for families in making informed decisions about college attendance. Families should look for the total cost of attendance, the amount of financial aid offered, and the expected family contribution (EFC) on the award letter. They should also look for any grants or scholarships that may not be guaranteed for all four years of college, and any PLUS loans that may be offered.
Tips for Analyzing Financial Aid Award Letters
When analyzing financial aid award letters, families should keep the following tips in mind:
- Look for the total cost of attendance, including all costs associated with attending college
- Look for the amount of financial aid offered, including grants, scholarships, and loans
- Look for the expected family contribution (EFC)
- Look for any grants or scholarships that may not be guaranteed for all four years of college
- Look for any PLUS loans that may be offered
- Compare financial aid award letters from different colleges to make an informed decision.
Financial aid award letters are a critical source of information for families in making decisions about college attendance. Families should analyze these letters carefully to make informed decisions. Families should look for the total cost of attendance.