Making Sense of Your Financial Aid Offer Letter

Getting an affordable college education with minimal debt is a priority for many high school students and their families. Once you complete the FAFSA, you’ll start to receive financial aid offers from your top college choices. But how do you know if one college’s financial aid offer stands out from the rest? Here are three tips from a financial aid expert:

1. Take note of grant and scholarship amounts.

While loans from the federal government or a private bank need to be repaid, grants and scholarships are gifts to you! If you have good grades and/or strong test scores, you may receive an academic scholarship. Many private schools also award scholarships to students who participate in athletics, music, theatre or other extracurricular activities. Students with significant financial need may be awarded a Federal Pell Grant. Iowa residents who attend an eligible private school—like Northwestern College—may also receive an Iowa Tuition Grant. (Iowa has one of the most generous state grants in the nation!)

2. Net price is the best comparison tool.

Calculating a college’s net price—total costs minus grants and scholarships—is your best tool for comparison, because it’s the price you will actually pay. The total costs at one school might seem higher at first glance, but depending on the amount of grants and scholarships you receive, it may be more affordable than you think. It’s also true that just because one school offers a bigger scholarship, it doesn’t mean it will have a lower cost overall.

For example, College A’s total cost might be $30,000 compared to College B’s $40,000 price tag. But if College A offers just $10,000 in scholarships and grants and College B offers $25,000, College B will cost you less. Likewise, an impressive $35,000 scholarships-and-grants offer from College C becomes less impressive if College C’s total costs are $60,000. So be patient. Wait for your financial aid offers and then do the math to help determine which college is offering you the best value.

3. Look for loan options and work-study as part of your financial aid offer.

Some schools include work-study earnings and loan options like Parent PLUS and private bank loans in their financial aid offers, but others don’t include them. If College A includes these funds but College B doesn’t, it might give you the false perception that College A is more cost effective. Work-study earnings and loans are available at most schools, even if they’re not included in your offer letter. Keep in mind that, unlike grants and scholarships, Parent PLUS and private bank loans need to be repaid after graduation (or when you leave school).

A college’s financial aid office is your best resource if you have questions. Whatever school you attend, earning a college education will be one of the best investments of your life—both for your career and for your future.

Looking for an affordable Christian education? At Northwestern College, you’ll receive a guaranteed $12,500/year in grants and scholarships. Depending on your high school GPA and test scores, you may be eligible for even more! Visit our website to learn why we’re one of the “best colleges for the money.”