Last month, I talked about the financial aid policies at different colleges and how those policies affect your financial aid. This month, let's look at the actual offer itself. There are a few things to keep in mind as you look at financial aid offers; you need to know what's included in your offer. Know that not all schools meet need equally and you need to know in advance how each school meets your need.
What a school includes as your total cost will be different from one school to another. Some schools include only direct costs like tuition and room and board. Other schools will include direct and indirect costs such as books, fees, transportation, and personal expenses to come up with the total cost of the school. This is important because all schools use the total cost number to determine your financial aid. If the indirect costs are not included in the total cost, then you are on your own for these expenses. Make sure you should include a dollar amount for these expenses as you consider if the school will be a good financial fit for your family.
Some schools will meet 100 percent of your need others as little as 15-20 percent. Knowing how much need a school meets ahead of time will help you to plan your high school career with more focus on gaining admittance to a top financial aid school, helps you decide if a school is a good financial fit for your family, and gives insight into how good the offer of financial aid you just received is.
How much of your need a school will meet is really based on how much money a school has. Most private universities have endowments and some portion of the profits from those endowments goes towards scholarship programs for students. The top private colleges like Harvard, Yale, or Stanford have very large endowments they use to help defray costs for their students.
As you could expect these colleges meet all of their student's need and it is met for the most part with gift aid, or scholarships. As students decide on which schools they will apply to how much need the school meets should be a consideration because it will have a huge impact on the bottom line for the student and their parents.
Most schools publish how much financial need they typically meet for the average incoming freshmen. These numbers are important because they give you an idea of what your net cost is going to be. You should also have those numbers on hand when you look over your offer of financial aid. The numbers you need are the percentage of need they meet, and the breakdown of how they meet that need.
For example, XYZ college meets 100 percent of need with 92 percent in scholarships and grants and 8 percent in the form of loans or jobs. So if your family had an EFC (Expected Family Contribution) of $5,000.00 then the average offer would look something like this:
$40,000.00 -- Total cost to attend
-$ 5,000.00 -- Your EFC
$35,000.00 -- Your need
So if XYZ college meets 100 percent of your need, the entire $35,000.00 will be met and 92 percent or $32,200.00 will be in the form of a grant or scholarship and $2,800.00 will be in the form of loans or a job. Let's take a look at what would happen if XYZ College only met 25 percent of your need. In that case of the $35,000.00 of need they would only meet $8,750.00 and the remaining $26,250.00 would have to be paid by the student's parents.
If your offer is 10 percent or more below the published percentage of need met, you should contact the college and find out why. Sometimes you will receive a poor offer because you missed a deadline, or because the funding has been already given away to other students and sometimes it's because the college isn't quite certain that you are the best candidate for their school. One thing to remember if you have received a poor offer -- it's up to you to decide how badly you want to attend that school. Are you willing to pay more than the average student to attend? Are you or your parents willing to go further into debt to attend? This is where students and parents need to do some soul searching to decide what will be best for their financial future.
For the colleges part, they are looking for ambassadors to their school. For years to come, in fact all through your life employers, colleagues, and friends will ask you where you went to college. In essence, you will become a living breathing advertisement of that school. How you conduct yourself before you apply to a school matters. How you present yourself in person and on social media can come into play as admissions and financial aid officers make decisions about your financial aid package and your future.
For your part review your offer carefully with your own financial future in mind, select a college that gives you what you need but won't make it hard for you to afford to be on your own after college.
Average tuition and fees for in-state student: $9,022 in 2011-12 Increased: 20.5% from a year prior and 98.3% from five years prior The worst could be yet to come for students in California's public universities. If California residents vote against state tax increases in the November elections, the school system will have to come up with money fast to fill the $375 million budget gap that would ensue, says Dianne Klein, a spokeswoman for the University of California's Office of the President, which is the headquarters for the 10 UC campuses. Under that scenario, tuition could rise 20.3% for the second semester of the upcoming academic year. Much of California's growing college-cost burden has been placed on out-of-state students. The 10 most expensive campuses for out-of-state students in the U.S. are all in California, where tuition, fees, room and board in total ran up to roughly $51,000 last year, according to the Chronicle for Higher Education. Klein says that despite the rising costs, overall applications to the UC system are going up; she also says that because of the system's financial aid programs, about half of all UC undergrads pay no tuition.
Average tuition and fees for in-state student: $9,428 in 2011-12 Increased: 16.8% from a year prior and 101.7% from five years prior Since 2008, Arizona's public universities have laid off faculty and staff and eliminated academic programs in order to make ends meet. This year, state funding will total $708 million, compared with nearly $1.1 billion for the 2007-08 academic year, says Katie Paquet, spokeswoman for the Arizona Board of Regents. As tuition costs have risen, the largest universities in the state have rolled out lower-cost ways that students can attain a Bachelor's degree. This fall, Arizona State University will open a new campus in Lake Havasu City, where annual tuition for state residents will cost $6,000, nearly 40% less than at its campus in Tempe. Also, Arizona's largest universities -- ASU, University of Arizona and Northern Arizona University -- are offering students who transfer from community colleges a lower-cost way to complete their Bachelor's degree; in some cases, students will be charged the cost of tuition during their freshman year in community college rather than the tuition the four-year school charges when they enter it. "Our goal is to provide more options to students across the state at varying price points," says Paquet. Separately, for the first time in two decades, Arizona State University and the University of Arizona have frozen tuition for in-state undergraduate students for the upcoming academic year. Tuition for out-of-state students will rise by roughly 3%.
Average tuition and fees for in-state student: $6,808 in 2011-12 Increased: 15.9% from a year prior and 74.2% from five years prior Beyond tuition hikes, Georgia college students are also facing cutbacks to a popular state scholarship program. Last year, the state reduced the amount of money it doled out to students through its merit-based Hope Scholarship, amid concerns that the program was underfunded. The program, which used to cover 100% of tuition costs at the state's public colleges for qualifying students, covered roughly 87% last year; this year, as tuition continues to rise, the scholarship will cover 81% to 85% of costs in the university system. The state is also looking at cutting direct funding to higher education. Georgia Governor Nathan Deal recently proposed a $54 million cut through June 2014, which if enacted would reduce spending over that period to roughly $1.7 billion. A decision is expected early next year. John Millsaps, spokesman for the University System of Georgia, says public institutions have had to shift much of the cost burden onto students as state funding dwindles. Over the past seven years, state funding went from covering 75% of the cost of educating students to 50%, he says.
Average tuition and fees for in-state student: $9,484 in 2011-12 Increased: 15.7% from a year prior and 67.3% from five years prior Unlike most states, Washington doesn't have an individual income tax; instead, it relies on sales taxes for much of its revenue. Income from that source slumped during the recession, leaving the state with less money to go around. To make up for the shortfall, the state granted permissions to its public universities to raise tuition, and students have felt the impact: Six years ago, it cost roughly $5,700 on average for an in-state student to attend a public college in Washington. That's hovering around $10,000 this year. In June, the University of Washington announced a 16% increase in tuition and fees for the upcoming year, following a 20% increase last year. The state is covering just 30% of the cost of educating its students, the lowest share ever, says Norm Arkans, a spokesman for the University of Washington. He says the institution's relatively low tuition and fees provided some leeway to raise costs, but adds that the strategy isn't sustainable in the long term.
Average tuition and fees for in-state student: $6,044 in 2011-12 Increased: 13.7% from a year prior and 65.8% from five years prior Few students have been immune to tuition spikes in Nevada. During the five academic years ending this past spring, Nevada raised tuition and fees at its community colleges by 48% on average, one of the highest increases in the country, according to the College Board. Costs at four-year public colleges rose 66% over the same period. And midway through the last academic year, the state approved an 8% tuition increase for all undergrads, which will kick in this fall. Still, despite the increases, the cost to attend a public college in Nevada remains lower than the national average, says Dan Klaich, chancellor of the Nevada System of Higher Education.