Reading Financial Aid Offers

Colleges that have accepted your student and received your family’s application for financial aid should hopefully be sending their financial aid offers soon, letting you know what aid your student can expect to receive during the first year in college. However, the delayed release of the 2024-2025 FAFSA consequently means a delay in processing and sending the FAFSA results to financial aid offices. Your patience and understanding are needed while schools manage this process in a significantly reduced timeframe.

Why It Matters

You need to know the bottom line.
The financial aid offer contains important information: the actual costs for your student and the actual aid being offered. Remember that financial aid can include private and institutional scholarships and grants, federal and institutional loans, and other awards.
It’s important to compare similar costs and aid between institutions.
When thinking about a final college decision, cost may be one of the most important factors. Comparing the financial aid offers is the best way to get a true idea of which institution is the best financial fit for your family.
There is still time to make adjustments.
Whether or not plans have been solidified, your student has time to review and possibly alter them before the fall term, if necessary.

What Your Student Can Do Now

Create or find a comparison tool.
Not all financial aid offers look alike. Your student will need to develop a way to compare costs and aid if more than one institution is under consideration. Online calculators are available, including our College Funding Forecaster that may be useful. Some families may prefer to create a spreadsheet where various college costs and financial aid can be compared at a glance. Schools have a responsibility to create a clear understanding of the financial fit between the institution and the student. Be sure to thoroughly read all of the material and contact the school’s financial aid office with any questions.
Understand the different types of financial aid.
Your student should be sure to understand the different types of financial aid being offered, especially because schools typically do not label them in the same way. A Federal Supplemental Educational Opportunity Grant may be referenced with its full name at one school, while another may simply label it “Fed SEOG.” Some scholarships may be one-time only, meaning it’s received only the first year; others may be renewable for subsequent academic years based on maintaining a certain grade point average or other qualifications. Work-study awards may give a dollar amount but are not immediately applied to a university account; your student will need to find a work-study job and work the hours, then the money will come in the form of a paycheck over time. Loans need to be repaid with interest, and some types will accrue interest while your student is in school; you or another credit-worthy adult may need to cosign before your student qualifies for a private student loan. Some loans are parent loans, meaning the debt will be in your name rather than your student’s.
Take a mental health check.
Similar to adults, teenagers are impacted by social, environmental, political and health issues happening around the globe. While you are not able to replace professional services, the best option is to listen compassionately without disagreeing or offering solutions. Teenagers appreciate knowing someone is actually listening and acknowledging their feelings. Be sure to seek a mental health professional’s help if your watchful eye detects extreme moodiness or uncharacteristic irritability in your student. Explore the option of using telemental health care services. Honest and open discussions about mental wellness should take place before your senior heads to college with its additional stress and increased expectations.

What Your Student Can Do Later

Calculate the estimated total cost of college.
While considering the bottom line for each institution, your student should also determine estimated total cost before graduation. Will some scholarships expire, resulting in higher costs in years 2, 3 or 4? Is on-campus housing required for one or more years, or is the campus in a high-cost area for off-campus housing? How does travel to and from campus affect cost? Our College Funding Forecaster tool allows you to use the information from a financial aid offer to project total cost until graduation.
Make a decision that considers finances.
Using the financial information gathered, your student will be able to rank institutions based on cost. Some factors, such as a college’s reputation in a certain field or connections to desirable employers, may make additional cost worthwhile if it’s in the family’s budget. Generally, though, taking on a high level of debt to finance an education is not advisable if a lower-cost option is available.
Be prepared to decline some or all aid in the form of loans.
If your student will not need all the loans listed in the financial aid offer, there is an option to decline all or part of a loan. Since all borrowed funds will need to be repaid with interest, it’s worth the effort to understand how to do this. Once your student has made a decision on where to attend, the financial aid office should be able to assist if it’s not clear how or when to decline part of a loan.

What You Can Do

Be clear about your financial situation.
While it may be tempting to say you’ll find a way to make a bad financial situation work, it won’t do your family or your student any favors to seek extensive loans or be forced to make an undesired transfer later due to lack of funds. You will see a remaining balance to pay on the financial aid offers. If this number simply isn’t realistic for your family, an honest conversation now will set expectations for later .
Stand by to assist.
Be ready to help your student think about future college expenses and changing circumstances that may occur before graduation. If your student needs help understanding a financial aid offer, consider reviewing it with a school counselor. Iowans have the option of setting up an appointment with ICAN to go over the information with experts. If your situation has changed since the FAFSA, CSS Profile or other application for financial aid was filed, be ready to contact the financial aid offices of the schools your student is considering.

Registration is open now for a scholarship for Iowa high school students, not just seniors. The scholarship awards $1,000 College Savings Iowa deposits, which can be used when your student is ready to pay educational expenses. Register at www.IowaStudentLoan.org/ScholarshipSignUp.

Next Steps

Be sure to complete the survey questions at the end of this article to be entered into the 529 deposit giveaway!

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