04/01/2014 11:54 am ET Updated Jun 01, 2014

Review Your Offer of Financial Aid With an Eye On Your Future

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.

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