Critical Thinking: Which Financial Aid Package Would You Take?
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:
- Understand terms [NGPF has a Quiz Games Library that makes acquiring vocabulary fun!]
- Evaluate the quality
- Make apples-to-apples comparisons
- 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.
- 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'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.
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