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5 Questions to Ask About Financial Aid Award Letters

Kelsey Sheehy

It's that time of year again. Acceptance letters have arrived and students have until May 1 to decide which college to attend.

Money is often a major factor in that decision, but deciphering financial aid award letters can be tricky. Financial aid experts suggest students ask the following questions to fully understand what each school is offering.

1. What type of aid is included?

Financial aid typically includes a combination of grants, scholarships, loans and work-study, but award letters rarely spell out which is which, says Heather McDonnell, associate dean of financial aid and admission at Sarah Lawrence College in New York.

"A lot of schools just run them all together," says McDonnell, who cautions students and parents to keep an eye out for suggested supplemental loans, such as the federal parent PLUS loan, or tuition payment plans, which may be buried in the award letter.

"It really muddies the water," she says. "My neighbors will show up and say 'Can you make sense out of this?' and I look at it and go, 'Oh, God. Even after 34 years, this looks messy.'"

[Find tools and tips to help pay for college.]

Students can call the school's financial aid office to have someone walk them through what is included in their award. If work-study is part of the offer, it is also important to determine the likelihood of a campus job being available, says Chris Hanlon, director of financial aid at Albright College in Pennsylvania.

When comparing offers from multiple schools, McDonnell advises students to home in on the grants and scholarships, as work-study and loans will be consistent from school to school, she says.

2. Are grants and scholarships renewable?

Don't assume scholarships and grants offered for freshman year will automatically be awarded in subsequent years, says Mio Perez, associate director for College Quest at the Harlem Educational Activities Fund, an after-school program focused on getting teens to college.

"A lot of times it's not really clear if it's just a one-year award," she says. If scholarships do continue into subsequent years, they may stipulate that students maintain a minimum GPA, stay enrolled in a specific program or compete with an athletic team.

Schools may use grants to entice first-year students, Perez cautions. But that funding may not follow them as upperclassmen, making their education more expensive as they continue.

3. Is there a gap?

Most colleges use the following equation to determine a student's financial need: total cost of education (tuition, fees, room and board and in some cases living expenses) minus Expected Family Contribution (typically determined through a student's FAFSA application) equals "demonstrated financial need."

While the formula is standard, how close schools come to meeting that need is not, says Sarah Lawrence's McDonnell.

"Families should be asking ... 'Have you met 100 percent of my need?' If not, then there's a gap," she says, noting that any mention of a gap is often buried in the fine print.

4. How are competitive scholarships awarded?

While most colleges follow the same path to determine need-based aid, the factors weighted for merit-based scholarships is a whole other ball game, says Hanlon, from Albright College.

"You could have two institutions of similar selectivity, similar cost, similar reputation, and how those students compete within the given scholarship pool might be completely different," he says.

One college may focus on high school curriculum and grades, while another leans more heavily on SAT scores, he says.

[Get college selection tips from students, alums.]

If students receive fewer merit scholarship dollars from one school, it's worth asking the admissions office how the awards are determined, Hanlon says.

"Most institutions can and will provide you very, very good specifics on how you did. Exactly what was strong about your application, what may have been weak about your application," he says.

This information can give students a chance to update their application and have it reconsidered for competitive scholarships, if their credentials have improved from when they were accepted, Hanlon says.

5. Is more money available?

FAFSA applications only give financial aid officers a snapshot into a family's financial situation, says McDonnell, at Sarah Lawrence.

"Often times there [are] so many other financial challenges families face that you can't put on a financial aid application," she says. "When they share that with me I can say, 'Whoa, wait a minute. This is important to you, this is important to us; let's see what we can do.'"

[Take these steps to increase your financial aid.]

Divorce, job loss, uncovered medical expenses and financial hits due to natural disasters can all be valid reasons to appeal a financial aid award, aid officials say.

If there is no change in your family's financial situation, it still doesn't hurt to talk to the school if you're coming up short, says McDonnell.

"While I get all kinds of appeals, the one that's most successful and most helpful, is the family that sat down and looked at their finances and says, 'If Sarah Lawrence could just squeeze out another X number of dollars, this is doable,'" she says. "But too often I'm not even given the chance to try to squeeze."

Trying to fund your education? Get tips and more in the U.S. News Paying for College center.

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