The first thing to look for is how much is grant and how much is loan. The Stafford and Perkins loans are considered part of the financial aid package because the interest is subsidized by the federal government. But it’s still a loan that will need to be paid back. I generally advise parents to have their students take the Stafford and Perkins loans if they qualify, even if the parents don’t want the student to have college loans. The government is paying the interest, and you can always pay off the debt for the student as a graduation present. Students do better when they have some skin in the game, and knowing they will have to start paying back the loans keeps some students in school. . Some colleges will also list non-subsidized loans as part of the “student’s” portion, making the “parent’s” portion seem smaller. They will also list Parent PLUS loans as part of the “package”. This is how they appear to bridge the gap between what they are offering and the EFC, but neither of these are financial aid. In reality, non-subsidized student loans and parent PLUS loans are only suggestions. The school plays no role in qualifying you for, or administering, these loans, and you don’t have to take them.
Some of the wealthiest schools, such as Harvard and Swarthmore, no longer consider even subsidized loans as part of the package. They give extra grant aid in place of the Stafford and Perkins amounts. A nice perk of getting into a top school! Keep in mind, however, that just because they choose to give you extra aid, your student is still eligible for, and may take out the loans. The college might take this into consideration the following year, though.
Once considering the loans and grants, find out whether the grant aid is for all four years, especially if it is merit-based, and what the conditions are for continuation. In general, unless your financial circumstances change significantly one way or the other, your aid stays approximately the same all four years. It doesn’t do the college any good to lure you in freshman year just to have you drop out sophomore year because you can’t afford it — they are judged on their four-year graduation rate.
If money is very tight, consider whether schools require that students live on campus all four years. Living off campus with roommates can be cheaper, if there is sufficient housing available nearby (if not, needing a car cancels out the benefit).
Our rude awakening was when the substantial merit scholarship did not increase each year with the 4% annual tuition increase. So with the compounding, our portion had increased by 12.5% by graduation.
Books turned out to be more affordable than expected. Some books were rented, and some were purchased for cash from friends/acquaintances. Just be aware that if you are counting on a tax deduction for books, it won’t be available for anything purchased “under the table” for cash. The net effect of this on your taxes is probably negligible.
A non-subsidized Stafford loan is money that the student, not a parent, borrows. Why wouldn’t the college list it as part of the student’s portion?
Because if a school is meeting all need without loans, adding the loans on the financial aid list would mean that some other form of aid would have to be eliminated.
I agree that a school would always list the student loans first and then the parent loans. The loans to the student are a better deal with a lower origination fee and lower interest rate.
You might also see what is included in student fees (and how much they are). My kids both ended up at schools where practically everything is included with their fees - football and all other sports admission, athletic facilities, some things at the student health center. One kid is at a school with a lot of activities that are free (every Friday night concerts, movies, entertainers, activities like ice skating at the student union) and very reduced prices for other activities like mountain bike rental, camping trips, kayaking. It’s also in a town were everything is cheap (movies, eating out, etc). The other has less included (that she’s interested in) but can also get a discount on many regional activities.
Not as exciting as LA or Boston, but a lot cheaper.
The thing to watch with loans is whether the college pretends they’re free money, like grants. Some will show, eg, the Parent Plus and how it reduces your out of pocket bottom line- but it doesn’t. It’s not free.
My kids rented textbooks and never came near the college’s projection. But they were humanities. And when D2 took violin lessons (not a music major,) ours added that cost to her grant. Likewise, for study abroad, they threw in some money (the kids had to request that, an easy form.) At one point, if D1 had needed college health insurance, they would have reflected that in the grant, too.
So yes, some of these are ways you need to scour the actual award wording and some are follow-up questions.
@MFHP96 I estimated actual costs and requested that amount. They considered it reasonable and it was awarded. If your student is traveling coast to coast, in a different climate, I consider it a reasonable ask, just like asking for job perks. Gauge your packages and how the school values your student. (I work from the base idea that almost evertything is negotiable. LOL!)
Some colleges do include a higher “travel & personal” when you come from afar and they calculate need. I think you’d have to estimate, as TQ says, then maybe compare notes on CC.
That might work at a ‘meets full needs’ school, but I doubt many schools awarding only a portion of need will be able to make adjustments.