It’s not necessarily a public/private school thing. I was director at a private school, and I used the federal “shopping sheet” award letter format. This format clearly separates types of aid, in addition to including things like the school’s loan default rate. I am a firm believer in doing whatever I can to make financial aid easier to understand. Although use of the shopping sheet is not mandatory, I felt that if more schools would use the federal format, it might be easier for students to compare awards.
Thank you for your valuable input. I regret implying that our experience was representative of what all the private schools do.
I had no idea that the friendly format was called the federal “shopping sheet” format, or even that such format was a product of the federal government.
Now that you have explained that, I see that “In July 2012, the U.S. Department of Education (Department) released the College Financing Plan (formerly known as the Financial Aid Shopping Sheet) and asked institutions to voluntarily commit to using it to supply financial aid information to students in a way that could be understood and compared easily.”
The concept is great. Why do the institutions only have to voluntarily commit to using that format? I think that this format should be made mandatory.
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@NJEngineerDad, I agree with you that it should be mandatory. My school agreed to certain things for veterans benefit recipients, which included using the shopping sheet. I chose to use it for all students because I thought it was a good format. It’s not perfect, but if all schools used it, it would help people compare apples to apples.
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I tend to agree with you. Financial aid in my opinion is money that will not have to be paid back.The balance after scholarships and grants should be a subtotal showing the amount still owed. This could be paid through savings, current earnings, outside scholarships, or one can finance the balance. They could at the bottom show the Stafford subsidized and unsubsidized loans and perhaps suggest other options for loans. However, loans are not financial aid. You owe it to the university.
No, you owe it to the federal government. Loans are available courtesy of the US taxpayers.
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I understand that I may have been a bit unclear. You owe the balance of what is not covered by grants and scholarships to the university. How you finance it is up to you. You can use government loans, private loans, loans from relatives etc.
I know this thread is a couple weeks old, but as I was searching for information on Stafford loans, I read through it. This year was our first experience with college applications and financial aid. After looking at many financial aid packages from several colleges, I’m sorry, I agree they can be very confusing. I’m a business owner, so we deal with financials every day. However, the way different colleges presented their final cost of attendance was completely random. If you are going through this for the first time, it can be very confusing to have the federal loans and work study listed with grants and scholarships. I’m pretty sure everyone gets that the loans are a type of financial aid, but to put it in with a long list of scholarships/grants/etc gets confusing. For example, one college even included a $4000 parent plus loan as financial aid. Then under the list they will give you a line that says “amount you owe”, that doesn’t include all the federally subsidized loans. Well that is not an accurate amount, because the amount my daughter will owe includes the Stafford loans any other federal loans and the amount they budgeted for work study (since she will get the work study dollars in the form of a paycheck over the duration of the semester). That was my greatest frustration. The amount they say you will owe should absolutely include the dollar value of the federal loans and the work study because you owe it some entity, even if it is subsidized. I found that I had to make my own spreadsheet to get apples to apples comparisons. If you are new to this process it can be overwhelming and frustrating until you figure it out. When students are looking at picking between colleges, I can see how easy it is to get sucked into a college you can’t afford. It’s very easy for your eyes to go to the bottom number and think “ I can afford that” while forgetting about the $7000 in work study and subsidized loans you have to cover as well. Just as an example, we had 2 private schools give us $55,000 in aid. Even with that it was still $15,000 to attend. That was simply too much, but they implied that we would only need to pay about $8,000, which doesn’t sound bad, until you add the loans back in. Many of you guys are a great source of information and experience, just remember, many of us are really new to the process
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I don’t understand why you are lumping work study in with loans. Yes, work study dollars are not free because you don’t get them unless you work the hours, but once you get paid for working the hours, you don’t owe anybody anything for the work study money (well, except for maybe the tax man).
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Work study dollars need to be completely left out when you compare. More on that after addressing loans …
If your child will borrow loans, it makes sense to subtract those … but the federal shopping sheet format gives the amount you owe without subtracting loans because they aren’t free money. Instead, they are aid available to pay the remaining cost if the student chooses to borrow. Not all students will borrow, but all will take the free money.
Work study, on the other hand, is the maximum amount that a student “may” earn in a work study job. The student has to apply for & get a work study job - this is not guaranteed, even though the student received a work study award. And the student may not earn the entire amount of the award, depending on how much they work. Finally, the money is earned through work and paid in regular paychecks, so it would not be deducted from what the student owes the school.
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As to work study, exactly what you said. It took me a fair amount of research to learn about and understand how the work study program works. That’s why I have a problem with I being included in with the grants and scholarships. It’s not even a given amount like loans are. None of the colleges my daughter applied to used the form you have talked about. All 6 colleges lumped everything together. To my point, if you are a student doing this on your own or a parent who doesn’t have a ton of time to devote to their child the way these packages are explained are very complicated. If I had let the whole process up to my daughter, I’m not sure what the end product would have been because she cert didn’t have the time to devote to research and understanding the financial end of it. She understands now, but only because I’ve thoroughly explained it to her. The kids most at risk to getting into loan trouble are the ones who have little to no parental help. I was honestly surprised how confusing the offers could be once we started getting them.
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I agree with you. When I was a financial aid director, I worked really hard to try to help my students understand the whole process. I was told that I didn’t need to do all of the extra things I did to help them, but I felt that it was my job. I think it’s really important to try to learn what it is students & families don’t understand, then work to help them understand. I hope that CC is helpful in this regard.
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How? The maximum loan a freshman can take in their own name is $5500. The total over four years is $27,000. That $27,000 would be about $300 a month in loan payments which honestly I don’t view as trouble if it’s the difference between being able to attend and not attend a college.
Parent Plus loans are parent loans. Your kid is not responsible for paying back Parent Plus loans….the parents are. And if the parents aren’t helping…they probably aren’t taking these Plus loans.
For a large number of students, the $5500 from the Stafford loans is a drop in the bucket of what they will need to go to college. Unless you are lucky enough to live in a state that has a really affordable state school. (Pa does not). Even with massive amounts of financial aid from several schools, we were looking at least a $15,000 cost to attend. Multiplied by 4 that’s $60,000. And that was for a relatively high stats student. If a student doesn’t have much parental help figuring out how to pay for college, it’s easy to see how they can get mired in debt. My original point is more about the way many colleges present the financial aid package and how it can be confusing to those that are not experienced at looking at it. Yes, it’s the family’s responsibility to closely examine it but there is merit in having it be broken down into different types of aid. I felt it was very disingenuous of schools to list Stafford loans, work study and parent plus loans in the same list of aid as the Pell grant and all merit scholarships. Why, because they totaled all those number together and then subtracted it from the total cost of attendance. Under that in large bold letters the then listed a final figure titled “Amount you owe”. That amount isn’t actually correct because one needs to go back and add in the Stafford loans, parent plus loan and work study to the total of what you owe. If a student doesn’t have much help, they really won’t understand that and when they see the artificially low number on the bottom, may actually think they can attend a school for less than the real costs.
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I completely agree about Parent Plus loans. These are parent loans and I do not think they should be lumped into student financial aid. At all.
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Exactly, I had no idea what they were until we scheduled a meeting with a financial aid counselor at one of the colleges. She basically said “well we just list that so you know it’s an option”. That’s perfectly fine to list it as an option, but it’s not ok to include it in the financial aid package like it’s a grant or merit aid and use that amount to lower the bottom number that you will owe.
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Parent Plus loans are probably the least desirable form of financial aid, but they ARE financial aid. Try to borrow that amount on your own without putting up any collateral and see what interest rate you’d have to pay even in this ultra low interest rate environment.
On the other hand, I agree that these educational loans should be highlighted and separated from grants in any financial aid offer.
Even for those who haven’t done any research on college costs and how to pay for them, I don’t see how a person could read the word “loan” on a financial aid award letter and think that those dollars come from a grant or merit award.
I do agree that using a standard format of financial aid award letters that clearly differentiates loans form other types of aid, such as the “shopping sheet” that kelsmom talks about, would be a big step in the right direction.
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Again, other than the hours worked before receiving pay from a work study job, how does a student on work study “owe” anything for that money after it’s been made available to them?
I have no problem with work study or even including it in a financial aid package. My concern is where it’s put. When we received different offers, it was listed with all the scholarships,grants and loans. This list of “aid” is totaled up to be deducted from the cost of attendance, which will give students the balance of what they owe. You can argue that subsidized loans can be considered aid. I don’t agree with where it’s listed, but at least it’s actually aid that would be dispersed to the school to cover tuition/ room and board etc. Work study is totally different. It’s unfair to list that as a form of aid to count against the cost of tuition. It’s a job, students, especially freshmen won’t have that money until after the start of the school year. Theoretically, if they save it all up, they can apply it to spring semester, but it’s not money dispersed upfront. On top of that, students have to actively seek out a job (which is a good thing) so it’s not even close to a guarantee of funds. In my opinion, it’s not honest of colleges to count that towards cost of attendance, unless they have a giant asterisk next to it explaining the caveats. We would have never known without me doing lots of research. It may seem obvious and easy to parents that aren’t doing this for the first time, but in the area in which I live with lots of children from low income families, these small things can be a huge issue
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Work study is not expected to count against the cost of tuition, or anything else that is directly billed by the school and needs to be paid before, at or soon after a semester starts. The school’s published Cost of Attendance includes expenses that are directly billed by the school (tuition, fees, room and board, etc.) and expenses that are not directly billed by the school but that most students will still incur in the course of the year (books, other school supplies, transportation, personal expenses, etc.). It is this second category of costs that work study is meant to defray. In other words, expenses that are not paid in a lump sum at the beginning of a semester but that normally occur over the course of a semester and can be paid as work study hours are worked and the student receives paychecks.
You are right, a work study job is not guaranteed. But in my experience (I, know, only one data point so a very small sample size), when work study is offered as part of a financial aid package, the jobs are not hard to find for a student who takes an early initiative to find a work study job. Will it always be a fun job that meshes well with a student’s academic interest or career aspiration? No. It might be working in the cafeteria dish room. But the hours are designed to be flexible so that an academic schedule can be accommodated, and there’s generally an added bonus that the pay is not subject to FICA deductions.
Schools do not have to offer work study, but for those that do, it’s a nice kind of part-time job to have for a full-time student. It’s not money that has to be paid back, so it’s not like a loan. It’s not money given to the student for free, so it’s not like a grant or merit aid. But because of the way it differs from a “normal” job out on the local economy and a school’s discretion in making it available, it is financial aid.