Now is the time of the year when prospective students across the country are receiving their financial aid award offers.
Most students will likely have two or three or more varying awards in front of them from different colleges and universities. But not all awards are created equal. How are a student and his or her family supposed to tell the good from the bad?
"There are three key steps to evaluate college awards and making sure you are comparing apples to apples," said Scott Anderson or www.RealCollegeSavings . Com and author of "STOP! Everything You Thought You Knew About Paying for College in Wrong!"
These three steps are
n Get a third party objective evaluation of the costs for your college in question. Some colleges report costs as tuition, room and board. Some colleges will add books and fees. Some colleges will add transportation and personal expenses.
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It is very important that you are starting with a consistent standard for cost of attendance. Web sites such as collegeboard.com can provide students with a realistic expectation of average costs.
n Eliminate PLUS loans and third party loans (non-Stafford, non-Perkins and other non-student favored loans) from the comparison. Those types of loans are credit-based loans offered to the parents, often have little more benefit than bank loans you could qualify for, and often inflate the appearance of a student's award.
n Compute your real out of the pocket costs. Subtract the total student award from the school costs of attendance. This will tell you how much you can expect to actually see in a bill from the school.
Families may also find it helpful to look up the colleges' financial track records to see what they can realistically expect from individual schools in free money (grants and scholarships) and self-help (work study and loans).
"All colleges do not treat all students the same," Anderson said. "A college's financial track record can let you know whether the offer you just received is good or if it's a load of junk."
Once you have an effective comparison of the colleges' offers, you can identify how to appeal to those schools. Don't be afraid to negotiate. Only those who ask and make a case will ever have the opportunity to improve their awards.
Don't assume the financial awards you received this year indicate what you will receive next year. Changes in your financial situation can mean more or less financial assistance in the years to come.
For this reason alone, it makes sense to educate yourself now on the finer points of the financial aid process. Proper planning could mean saving thousands of dollars next year or the year after.
