By May first, many high school seniors will have to plunk down a deposit on the college of their choice. As they make their decisions, an important factor is the school’s financial aid offer. Consumer Reports has advice on how to understand your student’s financial aid package and avoid excessive debt.
First check what’s being offered in grants and scholarships. Those don’t need to be paid back. A caution?—the letter often covers only the first year and you want to access your costs for all four years. Contact the financial aid office to ask questions like, is a grant renewable? Does a scholarship require a certain GPA for it to continue into another year?
The letter also details how much money you can get in federal loans. They are better than private loans because they have fixed interest rates and more flexible repayment options.
Also check whether the federal loans are subsidized. Those are preferable because you’re not responsible for any interest that accrues until you leave school. The government has a helpful tool for comparing costs and financial aid at the schools you’re considering: http://www.consumerfinance.gov/paying-for-college/compare-financial-aid-and-college-cost/.
Occasionally, it may be possible to negotiate with a school for a better financial aid package, especially if your family’s circumstances have changed due to events like a job loss or a divorce.
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