Archive for April 16th, 2012

April 16, 2012

A new tool for comparing college financial aid award letters

by Grace

If you’re at the point where you have several college acceptances in hand accompanied by financial aid award letters, what is the best way to compare the bottom-line net cost of attending?

A new tool for comparing college financial aid award letters was recently introduced by the Consumer Financial Protection Bureau.

For each school you select, the “Sticker Price” first-year Cost of Attendance (COA) that includes average tuition & fees, room & board, books & supplies, and other expenses,  is provided.  Then you can enter the actual financial aid amounts from your award letters to see your personalized net costs.  The worksheet allows you to compare up to three schools at one time.

Here’s an example of a worksheet.  (Click on image to enlarge.)

Keep in mind there are only three types of financial aid, as explained by Kalman A. Chany, author of “Paying for College Without Going Broke”

While the descriptions of the various aid programs will vary tremendously from college to college, there are really only three categories of assistance that will be in the award letter: gift aid (grants and/or scholarships), work-study job opportunities, and loans.

Be careful because the terminology can be confusing.

Sometimes the terms are confusing. Even the word “scholarship” can mean different things. Traditionally, a scholarship is based on merit; grants are based on need. Some schools, however, change the name of grants to scholarships to make you feel better about the award. Ask each college if the gift aid you have been offered is based on merit, need or a combination to determine the likelihood of getting such assistance in later years. Need-based aid is likely to vary from year to year, especially if a family does something to harm its chances of eligibility.

Even with the ever-increasing tools as well as the many sources of advice and facts, figuring out the college financial aid landscape for your own child can be a minefield of misinformation.

You can try using the new tool here:  Paying for College Cost Comparison Worksheet

Related:  When is an ‘award’ really a loan?

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