Read the Fine Print
It is that
time of year again where impatient seniors are waiting to cross that stage and
grab their diploma! These young people
see their graduation as the end of childhood while actually it is the beginning
of real life, real adult life, because decisions are being made that are going
to affect them for years or even decades to come. One crucial decision that is being made on
their behalf is financial aid. Parents
all around the country have applied for financial aid for their child’s college
of choice and by now have received a response.
Each college or university have their own form to fill out as well as
their own award letter that they send back to each family and because every
school is different some families end up being confused about the amount of “free”
money that is actually being given.
When parents
receive the financial aid letter a lot of times they see the final number which
might say for a $32,000 a year tuition they were awarded $22,000, but if they
read the FINE PRINT the parents actually
still have to borrow $15,000 in loans.
The $22K they tend to see as the award usually has the amount of loans
needed on behalf of the student in order for them to attend that
university. When parents figure this out
sometimes it is too late to make an adjustment and the parents end up borrowing
tens of thousands of dollars in the student’s name. This is why the national student loan debt is
topping $1 trillion dollars. There is
not enough financial aid available like in the past so more students are going
into debt to go to their dream school.
Parents do
have a few options if they are stuck with sticker shock when the award letter
arrives. First they can appeal the
university for more financial aid, because most schools keep an appeal fund on
the side for just that purpose. They are
more likely to accept the parent’s appeal if there is a comparable college
offering the student more money. Also
make sure that when filling out the financial aid that you provide as much
information as possible so that your child receives the best possible offer
from the university. The other option
that is probably the best option and that is have your child choose a college
that you the parent can afford without too much financial aid and if the child
receives financial aid it is just icing on the cake. One side note when I say a college you can
afford I mean that the money has already been saved and you don’t have to tap
credit cards, home equity, or any retirement funds. Remember always read the fine print, it could
save your child a future with debt!
Have you ran into sticker shock when dealing with financial aid?
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