Comparing Financial Packages in the College Choice Process
If your child will soon be making the final college choice, it’s time to prepare to compare financial offers. That is, of course, unless you don’t need to worry about the price difference between schools.
As you review acceptances, scholarship offers, and financial aid offers, here are some tips:
- Make sure you know what you can afford. How much college savings do you have? How much can you afford out of cash flow? Is anyone else, like a grandparent, providing money for college? What do you expect your child to pay for?
- Determine your stance on student loans. Are you ok with your child taking out student loans or are you against them? Do you feel like student loans are a last resort or a necessary part of funding your child’s college education?
- Don’t be afraid to negotiate with the schools. Many schools will listen to your reasons for needing more money and will respond with a better package. Here’s a great story about how one family negotiated for more merit aid: Asking for Better Merit Aid Scholarships. Always be humble and polite when asking for a larger package. Never be demanding. Let the school lead the conversation. For example, I mentioned to the financial aid director of one school that another school was at the top of my daughter’s list and offered more merit aid, but I didn’t elaborate until he asked me to.
- Involve your child in the evaluation process. Compare the financial packages with your child involved. It’s important for kids to understand how much college money you have compared to each school’s cost. Explain why it would make sense to pay less. If your child is anything like my oldest daughter, cost will weigh into his or her final decision if the schools seem comparable otherwise.
- Plan for future tuition increases. If it is a tight squeeze to afford the first year of tuition at a school, keep in mind that the average yearly tuition increase is up to 5% and schools do not increase merit aid packages accordingly. That means you will probably pay more out of pocket each year.
- Make sure you understand all components of each financial package. Each one can be tricky to decipher and it can be very hard to compare them, especially if different types of loans are included. Finaid.org offers a good Guide to Financial Aid Award Letters.
Good luck! If you find yourself struggling to decide what is a good offer or what to do to get a better offer, contact me. I’d be happy to help!