What's not in a financial aid award letter

a graduation cap and a pile of money
  • Some forms of aid aren't shown on your financial aid award letter.
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In spring, college students look forward to one thing -- receiving their financial aid packages. Outlining how much the school and federal government are willing to give, the financial aid award letter helps a family determine the affordability of a particular school. Before cheering or crying about your aid award, be aware that these letters don't tell you everything.

Not everything is shown

An award notification will explain what federal and school-sponsored grants, scholarships, student loans and work-study jobs you're eligible for, but some aid is left off, says Nicole Ferguson, director of financial aid for Sierra Nevada College in Incline Village, Nev.

"Students who get private scholarships on their own are required to let us know, but sometimes they don't," she says. "Once we find out, we usually adjust their aid package by reducing the least attractive loan offer."

Aside from scholarships and grants, Ferguson says that other forms of financial aid, such as private loans, loan forgiveness programs and educational tax credits, won't be included on the award notification either.

Your end of the bargain

Students who see free college cash on their award letter shouldn't start doing cartwheels yet. While schools are happy to show what grants and scholarships they're willing to give, they rarely list any grade point average, credit hour or income requirements necessary to keep the money, says Dan Davenport, director of student financial aid for the University of Idaho in Moscow, Idaho.

"When we give financial aid, we give it one year at a time and they need to reapply for it every year," says Davenport. "Award letters don't give multiyear information on Pell grants, federal or private loans, so you're not really seeing a full financial picture."

When it comes to scholarships and grants, Davenport advises students to ask whether the funds are renewable for all four years, what's required to keep the award and whether the award will increase with tuition hikes. While students are entitled to such need-based federal aid as the Pell grant, Supplemental Educational Opportunity & Grant, or SEOG, and Stafford loans as long as their family's financial circumstances remain about the same, school-sponsored and merit-based awards may not be renewable.


PLUS loan not a big plus

If you see a generous PLUS loan offer from one institution, but not from any others, don't be fooled, says Chris Vaughn, director of new student financial planning at Mansfield University in Mansfield, Pa. You're not getting a better deal.

"The PLUS loan is a federal loan all parents can take out if they pass a credit check," says Vaughn. "Some schools list it as financial aid and some don't. So if one school is offering a $20,000 PLUS loan and another isn't, it doesn't really mean you're getting more aid."


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