College Grants: Decoding a Financial Aid Letter Part II

This is my second post on deciphering college financial aid packages. Yesterday, I explained what sort of federal financial aid assistance you might find in your financial aid award.

How To Decode a Financial Aid Letter

Today, I’m going to cover the types of college grants that parents typically find in a financial aid letter.

College Grants

Many families believe that the biggest source of college cash is private scholarships, which is absolutely untrue. You can find the biggest pile of scholarships at the schools themselves. And that’s why you want to pay close attention to whether a student financial aid award letter contains college grants.

Studying for College Scholarships

A Primer on College Scholarships

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Colleges dispense their grants in two main ways.   Almost all colleges and universities, state and private, award merit scholarships without regard to financial need. You often don’t need to be an “A” student to receive a generous scholarship. In fact, at some schools everybody pockets something.

Often colleges will notify students that they won a merit scholarship in their letters of acceptance. The acceptance letter could arrive weeks before the financial aid package shows up.

When the financial aid letter arrives….

You want to see if the school is providing any additional grant money. The schools dispense this extra grant money based on need. How generous the school is with the second round of grants will not just depend on the family’s income. The grant awards will also depend on whether a college really wants a child.

A student who has barely gotten into a “reach” school will often get a package loaded with loans rather than grants. In contrast, a student, whose parents make the same income as the reach applicant, could receive a big need-based grant if he or she is someone who the admission office wants to entice to its campus.

Obviously, you want a financial aid package that’s stuffed mostly or exclusively with grants because these don’t have to be repaid.

Financial aid award mistake….

Sometimes parents mistakenly believe that a financial aid award is more generous than it really is because plenty of schools don’t do a good job of differentiating the grants from the loans.

If you aren’t sure what your financial aid award contains, call the school’s financial aid office. Ask how much grant money is in the package versus loans. Only then will you begin to understand whether the school is affordable.

If the package doesn’t contain enough grants, you can always appeal.

How to Negotiate for a Better Financial Aid Package

Lynn O’Shaughnessy is the author of The College Solution and she also writes a college blog for CBSMoneyWatch. Follow her on Twitter.

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  1. I posted on a couple of your other articles. This is a nice site and you have very solid advice. One other thing, some schools have a no loan policy for different income ranges. This may help some students. Of course, that is for gap amount not the EFC amount.