Compare Student Loans and Determine What Financial Aid Package Is Best For Your Education Situation
Students in need of money for college will file their FAFSA form to find out what they qualify for. Once this is done, they’ll need to compare student loans to determine which financial aid packages are best for them. However, it’s important to know what kinds of monies and loans are available to students, as there is so many out there. Education is key to learning more about the kinds of monies that are available for obtaining a higher education degree. It’s time to learn them for your college education.
Now, you’ve applied for college and been accepted. You’ve sent off for your financial aid, waited patiently and now your award letters have come back for the schools you’ve been accepted to attend. Now what do you need to do? Look at your letters and see what kind of financial aid is being offered to you. With so many available, which ones are right for you? What do the package terms mean? This is the time to compare college loans.
There are seven main components you will find in the majority of college financial aid award letters. They are:
- Attendance Cost
- Family Contribution Expectation
- Federal Grant
- Institutional Scholarships and Grants
- Needs Not Met (Unmet Needs)
- Subsidized Federal Loan Offer
- Unsubsidized Federal Loan Offer
What you’ll need to do is compare those letters; learn what each means and assess and identify the differences and strengths.
Attendance Cost
When you get your college award letter, you’ll see the true cost of attending the college at the bottom; this is not your tuition cost. Tuition is just one part to attending college. Attendance cost looks at five things:
- Books (estimated costs for them)
- Other fees that must be paid to attend
- Room and board
- Student activity fees
- Tuition
Make sure to compare college loans when you’re reviewing those award letters. If you have questions, speak to your financial aid officer if you have questions.
Family Contribution Expectation (Expected Family Contribution)
What the EFC amount boils down to is what the government has determined your family needs to be financially responsible for when it comes to your college expenses. That dollar figure is located on the SAR after you submitted your FAFSA form. Yet, the majority of college award letters will itemize this part on the financial aid package or award letter.
Federal Grant
One thing you’ll see on the award letter is the money that you are qualified for. Grant money is not what you pay back. Keep in mind that Pell Grants are reserved for the most cash strapped students.
Federal Loans and Work Study Offers
When you compare student loans, you’re going to come across several types including the subsidized Stafford Loans, unsubsidized Stafford Loans and the Federal Perkins Loans. Some parents may even qualify for a Parent PLUS Loan. Keep in mind that you can qualify for all four in different amounts. Subsidized Stafford Loans are based on monetary needs and you’ll qualify based on that need. However, you may be able to have an Unsubsidized Stafford Loan as well.
Perkins Loans are based on the campus aid. This means that funds come from the campus coffers, not the federal government. If you’re offered the Perkins Loan, keep in mind that the money is on a first come, first served basis. This means you’ll need to make your decision soon about this loan.
Work-study means the government has accepted that you want to work part time on the campus to pay for your college education.
Make sure to compare college loans before you make any decision regarding your financial future.
Institutional Scholarships and Grants
When colleges/universities want to entice a student to come to their campus, they’ll look for ways to make it attractive. One such way is grants and scholarships. These are awarded based on many factors including but not limited to: athletics, academics, field of study, minority status, etc. These monies are free and don’t need to be paid back.
Needs Not Met (Unmet Need)
The “Needs Not Met” figure is going to be quite important in your award letter. After everything above is itemized, the college/university will determine what the amount is for not meeting your needs. Are they are any financial options available that you can help you meet that need?
Compare College Loans To Help You Make Your Decision
Each award letter you get is going to itemize all your financial needs and each time, it’s going to be different. You’ll need to determine two things.
- First, what award letter gives you the best reasonable financial option?
- Second, is your top college choice the most affordable option?
When you’re weighing your options, there are at least four things you need to consider:
- Give more weight to the offers that present you with higher grants and scholarship offers; after all, this is free money.
- Stick with subsidized federal loans, as they are more affordable than the unsubsidized loans; the government pays the interest that’s being accrued while you’re going to college.
- If you have a serious gap in unmet needs, can you handle a private loan?
- Compare college loans carefully because schools that present you with more loans than grants and scholarships will cost you in the long run.
When you’re comparing your award letters, make sure you to take into account the interest rates that are attached to the loans and understand all the terms that come with the scholarships and grants. Bear in mind that some can be renewed but only if you meet certain guidelines.
Once you have gotten through all the financial differences, then the ultimate decision is going to rest on what loan is going to be right for you. Thus, you need to ensure that you compare college loans very carefully.
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