Figuring out financial aid awards
By Lucy Lazarony • Bankrate.com

After filling out forms, writing essays and enduring the long wait for that much-sought-after admissions letter, it's finally happened. Your son or daughter has made it into his or her dream college. Go ahead and celebrate, enjoy the moment -- you've earned it.

Now comes the really hard part -- paying the bill. Even as you and your teen are doing a victory dance around the acceptance letter, another piece of mail from the university is headed your way -- the all-important financial aid award letter.

Many American families will need help paying that college tuition bill. A financial aid award is a crucial element.

The total package
In a financial aid package, a college or university will try to make up the difference between the cost of attending its school and a family's expected contribution as determined by the federal government. A family's expected contribution is calculated from information submitted on a Free Application for Federal Student Aid. Experts urge families to file FAFSA forms in early January.

A financial aid award determines just how much your family is going to pay for the privilege of sending your son or daughter to a specific college or university.

Aid packages vary. Much depends on a student's academic record, a family's financial need and how much aid is available from a school. Private schools tend to have deeper pockets than state schools. They also tend to cost more.

Some schools send out acceptance and aid notifications on the same day. So the euphoria over getting into your dream school may be short-lived as you and your family delve into the number-crunching part.

Keys to keep in mind
The first thing to consider is how much of the financial aid award is from grants and scholarships and how much is from loans. Check out all the details.

Is the grant renewable? Is the scholarship contingent on maintaining a certain grade point average? Does a separate application need to be filed for the loan?

Another key thing to scrutinize is the cost-of-attendance estimate listed by the college or university. Does this figure cover all student expenses for a full nine months? Some schools include indirect college costs, such as transportation and living expenses in a cost-of-attendance estimate. Others don't. Some schools stick to tuition, books and room and board.

"If they are confused about anything, they shouldn't hesitate to call or e-mail," says Benny Walker, vice president for enrollment at Furman University in Greenville, S.C.

Several Web sites, including Peterson's and FinAid, offer tips for maneuvering through the financial aid process. Detailed information on loans and a calculator for comparing award letters are available on wiredscholar, Sallie Mae's planning for college Web site. The College Board site boasts numerous calculators, worksheets and online brochures.

Be sure to check a university's Web site as well. You may find the answer you're looking for in the financial aid section.

A simple question may be answered with a quick phone call to the school, but not always. At larger schools you may have a tough time getting through. Be as specific as possible in any voice mail messages. And be patient. Phone tag is common.

Making changes
Requests to modify a financial aid award because of a change in a family's financial situation or a student's academic standing should be put in writing. Most schools respond to these requests fairly quickly.

"When appeals come in, we usually turn them around in 48 hours," says Furman University's Walker.

Also realize that you don't have to accept all aspects of a financial aid package. For example, your teen may want to decline a loan in favor of joining a work-study program. But be prepared to stick with this decision. That loan money will likely go to another student and you won't be able to get it back.

-- Updated: March 10, 2004