Sure, writing college essays, asking for teacher recommendations, getting the grades, and everything else that goes into your college applications is a pain. But at least it’s a pain point you can precisely target and attack by submitting your applications before the deadlines.
Financial aid, on the other hand, is a much more challenging beast to tame. Getting and understanding your financial aid award is so gosh darn confusing. And it’s not even your fault! It’s the way colleges have traditionally illustrated a student’s financial aid award that’s the problem (one of them at least).
The College Solution‘s Lynn O’Shaughnessy explains that award letters are misleading. They often make parents think that their student received a big scholarship to help pay for college when in fact, the award letter is padded with loans. When it comes time to figure out how much out of pocket a family will have to pay for college by subtracting the awarded aid, students’ families don’t realize that some of that aid includes loans that will accrue interest and push up costs in the longer run.
Yes. This is a bummer. But if you’re in the know, you can make a better decision on where you should enroll if cost is a big factor in your choice. Read in between the lines. Compare your college financial aid awards and make sure you know which includes loans and not just all scholarships and grants.
Don’t not fret (too much). This issue has not gone unnoticed by the Consumer Financial Protection Bureau and the Department of Education, which announced a plan to simplify the aid letters so that families can assess a school’s true cost and make comparisons more easily and knowledgeably. In fact, they want YOUR feedback on the draft of the form.
You can give your feedback here: http://tinyurl.com/3ve57mt
Here is the draft of the proposed financial aid letter. Notice that it provides the total cost of attendance, which is often an evasive subject, the loans are separate from the scholarships and grants, and monthly loan payments following graduation are included.
Would knowing what kind of monthly payments graduation help you make a more informed choice on which college you should enroll in? Leave a comment below on what you think about this issue!