How to Help Your Child Interpret Their College Financial Aid Award

Posted by IPFW Admissions Team on 8/2/16 7:30 AM

Financial aid staff explaining awardSo your son or daughter just received financial aid award letters from the colleges he or she applied to—and with all the acronyms and confusing terminology, it could very well be in another language.

What does it all mean? How do you determine how much your family has to pay? How can you understand the financial obligations your child might be taking on so you can help them make smart decisions about their education and future?

Let’s break this down together.

 

Financial Aid Award Terminology: Explained

For reference as we go through some terms—in case you’ve not yet received one—here’s a sample financial aid award letter.

  • COA — Total Cost of Attendance
    This is simply the total cost of attendance, which is the total cost (not including grants, scholarships, loans, etc.) for your son or daughter to attend this college for one year. It can include tuition and fees, room and board, books and supplies, and personal expenses.
  • EFC — Expected Family Contribution
    This is the amount the government has calculated (based on your FAFSA) your family is able to pay for college.
  • Grants and Scholarships
    These are sources of “free money” for college. Grants are usually awarded according to financial need. Scholarships can be need-based, merit-based, or a mix of both.
  • Loans
    There are many different kinds of loans. You might see subsidized loans, unsubsidized loans, Perkins loans, and so on. Loans are money (usually provided through a government program) to pay for school that your child will have to eventually pay back.
    The terms of the loan—interest rate, repayment schedule, etc.—depend on the kinds of loans. Learn more about the loans included on your award letters in this helpful guide.
  • Work-study
    This is money your child will earn for working in a part-time job for the college.

What do I have to pay?

The total amount you’ll owe is calculated by subtracting your total award from the total cost of attendance (COA).

If there is any gap between that number and what your family can pay (EFC), you’ll have to make it up another way. Consider private loans (but be careful of the downsides) and read more about them here.

Is this money good for all four years?

No. You’ll have to resubmit the FAFSA every year. Here’s a quick guide that will help you complete the FAFSA correctly.

Some scholarships are only good for a year or they require your son or daughter to maintain certain academic standards. Check with your college’s financial aid office and/or the department issuing the scholarship for more details.

Who can I ask for more information?

The financial aid department at each college you’re communicating with would be glad to help. IPFW’s Office of Financial Aid can  be contacted here.

If you’re looking for an easy way to explain scholarships, loans, and grants to your son or daughter, take a look at some of our two-page quick guides. These short guides break down what you need to know about the most common types of financial aid:

Download the Financial Aid Quick Guide: Student Loans      Download the Financial Aid Quick Guide: Grants

Download the Financial Aid Quick Guide: Scholarships      New Call-to-action

Topics: Financial Aid, Scholarships


 

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