High school seniors, you filed your FAFSA, and your top college choices each awarded you various financial aid packages. But now what?
Compare colleges’ net prices
Find out which one offers you the most affordable net price and look at the numbers closely to be sure you aren’t comparing apples to oranges. Find the cost of attendance (COA) on the financial aid award letters, which includes direct costs—tuition, housing and dining, if you plan to live on campus—and estimated indirect costs—textbooks, a computer, supplies, living expenses and transportation.
Add up the scholarships and grants each school offered you and subtract that amount from the direct costs. Then add in the indirect costs to get the net cost for that school. Compare these amounts for each college you are considering.
Don’t include student loan amounts in your net price calculations. Unlike scholarships and grants (“free money” gifted to you), student loans are funds you will have to pay back later, usually with interest. The more money you get in scholarships and grants, the less money you will have to earn or borrow.
Plan how you’ll pay for all four years (not just one)
Find out whether colleges will offer you the same scholarships and grants for all four years—see if the award letter says aid is renewable. If so, you may have to maintain a certain minimum GPA or meet other requirements to keep that money.
You may also want to ask each college how much they have raised tuition for the past few years, to help you estimate any future increases you’ll have to take into account. Immaculata’s comprehensive undergraduate tuition has remained essentially the same for the past four years, with one modest increase of just $400.
Be choosy about student loans
Do your homework on your borrowing options and obligations. Figure out how much debt you can take on and repay responsibly. The U.S. Consumer Financial Protection Bureau provides an online tool that can help you understand your financial aid offers from various colleges and create a plan to pay for any left-over costs. Use this tool to estimate how much you will need to borrow and decide what you can afford.
You can also use the U.S. Department of Education’s Loan Simulator to estimate the amount you may need to borrow and what your student loan payments might be like. The tool can’t predict exactly what you’ll pay, but it can help you plan your financial future.
Student loans are not all created equal. Here are your best options, ranked:
- Federal subsidized loans are interest-free while you are in college. Uncle Sam pays the interest as long as you are enrolled at least half-time. Subsidized loans are awarded based on financial need, so your family may not qualify for subsidized loans.
- Federal unsubsidized loans do accrue interest, but at a lower rate than other types of loans. They also provide certain protections for you as the borrower and offer better repayment terms.
- Federal Parent PLUS loans are for your parents to take out for your educational expenses. Parent loans have higher interest rates than loans for students, but they can help fill any gaps between your family’s means and your education costs.
- Loans from state-based or nonprofit organizations typically have fixed interest rates and good consumer protections.
- Private student loans can sometimes be financially risky, so use them only as a last resort. Read the fine print carefully, and make sure the repayment terms and interest rates are manageable. Lenders may require a credit check, or you may need to find a cosigner with good credit.
You are free to accept or decline different types and amounts of financial aid. If your award letter says you are eligible for both subsidized and unsubsidized federal loans, and you can afford to pay for your education just with subsidized loans, tell the school’s financial aid office that you want to reject the unsubsidized loans. Borrow only as much as you really need so that you keep your debt as low as possible.
You may be able to appeal for more financial aid
The FAFSA asks for your tax information from the previous year, and your situation in the current year may have changed. We know 2020 was a crazy year because of the pandemic and other hardships, so Immaculata’s financial aid staff will do what they can to help. If your family’s finances have changed significantly since the tax year reported on your FAFSA—because of divorce, job loss, decreased salaries, disability, high health care or dependent care expenses, for example—you can ask colleges for a professional judgment review and submit documentation of the extenuating circumstances your family is facing. The financial aid staff may be able to adjust your FAFSA to reflect your family’s finances more accurately, which may increase the aid you can receive.
And if you need any other help, contact IU’s financial aid staff at 484-323-3028 or firstname.lastname@example.org. They are happy to answer your questions and help you make sound financial decisions as you invest in your education and your future career potential.