How To Understand Financial Aid When Choosing Your College

College admissions season is here, which means that college decision day is approaching. As students navigate college decisions, financial aid plays a big part in their decision. When thinking about financial aid, it is important to understand the difference between need-based vs need-blind schools. Additionally, consider the impact they have on your ability to afford tuition. Similarly, it is important to take into account factors such as scholarships, grants, and loan eligibility. Let this be a guide towards selecting the most fiscally efficient plan for you.

How Financial Aid Is Calculated

Before evaluating your financial aid plan, make sure you know if a school is need-based or need-blind. According to the Federal Student Aid, “need-based aid is financial aid you can receive if you have financial need and meet other eligibility criteria. You can’t receive more need-based aid than the amount of your financial need.” To calculate need-based aid, you subtract one’s Student Aid Index (SAI) from an institution’s Cost of Attendance (COA). Need-based schools consider financial need when admitting students. On the other hand, need-blind admission considers financial need after the admission decision.

For students who come from low-income households, sometimes need-blind institutions are best. This is due to the fact that their financial needs aren’t a factor in the admissions process. No one wants to be denied admission to an institution solely because the school is unable to meet their financial needs. In most cases, schools that are need-blind are well-endowed, such as larger, prestigious institutions. Due to having the resources, need-blind schools do not have to factor in a student’s financial needs. It is unfortunate, but it is our reality.

Breaking Down Financial Aid Packages

In addition to learning if a school is need-based or need-blind, it is important to consider scholarship awards, grant offers, work-study and loan qualifications. These are all factors that may be listed in your package based on eligibility. For example, some of you may qualify to receive a federal Pell Grant, which is money provided by the government that does not need to be paid back. Similarly, if you meet certain criteria based on grades or leadership qualities, you may qualify to receive scholarship awards funded by your institution that do not have to be paid back.

On the other hand, your package may also list a variety of loans including Parent-Plus loans and subsidized and unsubsidized loans.

When choosing your college take into account all of the components in your financial aid package. If affordability is important to you, choose loans with the least interest, and consider applying for scholarships outside of those provided by your school. Additionally, don’t be afraid to appeal your financial aid package. You are not guaranteed a better offer, but it never hurts to ask.

It may all feel complicated processing all the numbers. Take advantage of your resources. Speak to people who are currently in college. Reach out to your college counselors and mentors. And most importantly, do as much research as possible.

Do not rush your decision. At the end of the day, all of the pieces will come together, so that you can attend the school that is best academically and fiscally for you and your family.