NEWARK, Del.--(BUSINESS WIRE)--This month, students and families begin receiving financial aid offers, also referred to as financial aid award letters. Financial aid offers vary from school to school, and different formats and terminology can leave students questioning which offer is best for them. In fact, Sallie Mae’s “How America Pays for College 2019” shows that just 42% of families say they completely understand their financial aid offers.
Financial aid offers are sent by each school’s financial aid office to current and prospective college students who filed the Free Application for Federal Student Aid (FAFSA). The offers illustrate the amount of financial aid that the student will be eligible to receive in the upcoming academic year. The timing of financial aid offers will depend on when the FAFSA was filed, and when schools send out acceptance letters.
To help families evaluate their options, Sallie Mae® is providing tips and resources for reviewing and comparing financial aid offers:
- Create a spreadsheet and get organized. To help choose the best offer, create a spreadsheet so you can compare and keep track of a school’s cost of attendance (COA), the Expected Family Contribution (EFC), and the details of the financial aid offer, including any scholarships, grants, work-study, or federal student loans.
- Understand the terminology. Recent research shows financial aid offers lack consistency in format and overall transparency, which could make it difficult for families to compare them. For example, you might see federal loans listed as a “federal direct unsubsidized loan,” “federal loan,” a “direct loan,” “direct unsub,” or even just “L.” Take the time to understand exactly what is being offered, and if you have questions, don’t hesitate to contact the school’s financial aid office.
- Bigger isn’t always better. The biggest financial aid offer may not be the best. The key to success is to dive deeper and look beyond the total dollar amount. Establish how much of what’s listed is “free money,” like scholarships and grants, and how much is money that needs to paid back, like federal student loans. In some circumstances, it may make sense to accept a smaller financial aid offer that offers more scholarships and grants, over a larger award containing more loans.
- It’s okay to negotiate. If your family’s financial situation has changed, pick up the phone and call your school’s financial aid office. They may be able to consider a reevaluation of your financial aid offer.
- You don’t need to accept the entire offer. You are not required to accept everything that’s included within your financial aid offer. After you’ve established your plan to pay for college, only accept the types and amounts of aid you need, and make sure to respond to your school before the deadline.
- Read the fine print. Even after you’ve accepted your financial aid offer, it’s important to pay attention to the fine print. Note which parts of the award are renewable and which are for just one year, and be mindful of grade point average requirements. Additionally, make sure you complete and submit any required documents promptly. Missing a deadline could negatively affect aid eligibility.
“College is often one of the first investments young adults make in themselves, and choosing the right financial aid offer is an important part of that journey,” said Martha Holler, senior vice president, Sallie Mae. “Starting with a strong foundation of financial know-how will empower students and families to take on what’s next with confidence.”
Tips on understanding and evaluating financial aid offers are available at SallieMae.com.
Sallie Mae (Nasdaq: SLM) believes education and life-long learning, in all forms, help people achieve great things. As the leader in private student lending, we provide financing and know-how to support access to college and offer products and resources to help customers make new goals and experiences, beyond college, happen. Learn more at SallieMae.com. Commonly known as Sallie Mae, SLM Corporation and its subsidiaries are not sponsored by or agencies of the United States of America.