Acceptance letters and aid award letters are rolling in while I write (and over the next few weeks). Informative article in WSJ recently detailed how these letters should be read with a "fine-tooth comb" to be sure that there are no gotchas. Here are the four keys:

1. Understand terms [NGPF has a Quiz Games Library that makes acquiring vocabulary fun!]
2. Evaluate the quality
3. Make apples-to-apples comparisons
4. Keep up on paperwork [NGPF created a Financial Aid Process Flow to assist in understanding various steps in the process]

The best element in the article was this chart below which has a summary of three aid packages.  

Questions:

• Is the EFC (expected family contribution) likely to be the ACTUAL amount that you and your family contribute to your college education in a given year? 
  • How would you figure out whether or not your family will be able to meet the EFC for your education? 
• What stands out in the Aid offered at school #1? Does this make their financial aid offer more or less attractive? 
• What is the most important element in the Aid Offered by school #2? Does this make it more/less attractive than School #1?
• Financial aid award packages are suggestions on how families might pay for college. Would you make any changes based on what you see for the Aid Offered by School #3? 
• From a strictly financial basis, which school provides the best aid package? Explain your reasoning. 

-----------------

Here's an NGPF lesson dedicated to Deciphering your Financial Aid Package!

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

More posts by Tim