Factoring in financial aid before making decisions
As you know, financial aid — institutional, state or federal — often doesn’t just determine IF a student can go to college, but it also affects WHERE the student will go to college. But too often families will eliminate a college based solely on the perceived cost without factoring in financial aid. Or worse, families may assume they won’t qualify of any aid so they don’t fill out the Free Application for Federal Student Aid (FAFSA), which is also often used to determine institutional aid.
“The important thing is for students not to look at the ‘sticker price’ for college, as only a very small percentage of students actually pay this amount,” said Wade Peterson, a college counselor at Breakthrough Twin Cities. “I always tell my students that a theoretically more expensive college can actually be less expensive in reality.”
And that is why it’s vital for families to learn how much financial aid a college will offer before dismissing the school entirely. The following are a few approaches that may help encourage them to keep their options open.
Net price calculators at our institutions:
- Augsburg College
- Bethany Lutheran College
- Bethel University
- Carleton College
- College of Saint Benedict
- The College of St. Scholastica
- Concordia College, Moorhead
- Concordia University, St. Paul
- Gustavus Adolphus College
- Hamline University
- Macalester College
- Minneapolis College of Art and Design
- Saint John's University
- Saint Mary's University of Minnesota
- St. Catherine University
- St. Olaf College
- University of St. Thomas
Net price calculators
One place to start is with net price calculators. They help families estimate how much aid they might be eligible to receive.
“I always recommend using the net price calculators on college websites to help students and families project the actual vs. ‘sticker’ price of colleges under consideration,” said Lisa Rydeski Pederson, director of college counseling at Mounds Park Academy. “Early on, I find that we can work to develop the college list in a more helpful way once they’ve gotten an idea of what they will be expected to pay.”
Peterson echoed this assessment: “It is important to use net price calculators and talk to financial aid offices before you stop considering a school.”
Free Application for Federal Student Aid
The next step is (unsurprisingly) to complete the FAFSA. Beginning in 2016, the FAFSA could be filed as early as Oct. 1 (instead of Jan. 1) and can pull in the previous tax year’s information to help colleges determine financial aid packages earlier. Students do however still need to apply to the college in order to trigger that estimate; simply applying for aid isn’t enough.
“With the early FAFSA, families in some cases will receive official financial aid packages earlier than in previous years,” Peterson said, “and depending on their college lists, some students will have all admission and financial aid offers to compare earlier in the year. This could enable them to make the final college choice earlier as well.”
It is important to keep in mind that colleges may provide only an estimate of aid until decisions are made at the state and federal level that could impact aid and tuition. When a college sets its tuition for the upcoming year also may have an impact, although many are deciding this earlier, in response to the earlier FAFSA.
Evaluating aid packages
Once a family knows how much financial aid colleges are offering a student, the next step is to compare the packages. Each award letter is a little bit different — and not just in terms of the amount of aid offered. Carly Eichhorst, director of financial aid at St. Olaf College, recommends using a spreadsheet to organize the information. There are many ways you can set up a spreadsheet, but she suggested breaking it down into categories. Here’s one way to do it:
- Cost of attendance: This includes tuition and fees, room and board, books and supplies, personal expenses and transportation. “It is especially important to note that fees vary significantly by institution,” Eichhorst said. She also advised families to research if students are charged a comprehensive tuition rate if they take a specific number of credits or if they are charged a per credit rate.
- Grants and scholarships: Grants typically comes from state and federal governments in the form of need-based aid or from the institution itself, where the aid may be need- or merit-based. Scholarships mostly come from the institution or other private sources. For non-government aid, Eichhorst emphasized that there may be other factors to weigh including a credit enrollment minimum as well as if the aid is renewable and, if so, what the renewal process entails (such as completing the FAFSA).
- Work study: Some colleges will place students in on-campus jobs while others require students to find a job themselves. Families should find out what the average hourly wage is for work-study jobs. This will help them estimate how many hours their student may need to work during a week to earn enough to cover expenses. Eichhorst also recommended that families ask what the average first-year student earns in a year.
- Loans: Families should note whether the student loan amount is subsidized or unsubsidized. “Federal Direct Loan amounts offered will be identical from school to school,” Eichhorst said. “However, the loan may be subsidized at one school and unsubsidized at another.” Families should also pay attention to whether expected parent loans, such as the PLUS loan, are also listed to cover the cost of attendance.
Balancing cost and “fit”
Organizing aid information across colleges will help families truly understand what each college is offering. But Eichhorst points out that while cost is an important consideration, it’s not the only one that families need to factor in. “Once the details on the cost of attending a college are organized, it is much easier to have a real discussion about finding the right college fit.”
And while list prices are higher at our 17 member colleges than at the state’s public institutions, our colleges also award substantially more institutional aid than the publics — nearly $564 million in aid that students never have to pay back. So it pays to factor in financial aid — and to weigh the value of a private college education.