Understanding aid letters

In the spring, after the acceptances, the aid offers land, and they are hard to line up against each other. Different formats, different labels, and a "bottom line" that often hides a loan inside it. Here's how to see past the presentation to what each school will actually cost you, and how to push back when the number is wrong for your family.

The one number that matters: net price

An offer lists a cost of attendance and a pile of "aid." The only figure that tells you the truth is:

Cost of attendance − gift aid = what you actually pay.

Gift aid is money you never repay: grants and scholarships. That is the only aid that lowers your real cost. Once you have the figures off the letter, the borrowing gap calculator turns them into what a year would actually take. Everything else on the page - loans and work-study - is you paying, just later or by working. Many letters subtract the loans too, so the "net" looks smaller than it is. Do the math yourself with gift aid only.

Gift aid vs self-help aid

• Gift aid (lowers your cost): Pell Grants (the main federal grant) and state grants, merit scholarships, the school's own need-based grants.
• Self-help aid (does not lower your cost): federal student loans, Parent PLUS loans, and work-study (money your student has to earn, hours that may or may not materialize).

Sort every line on the letter into one of those two buckets before you compare anything.

Compare apples to apples

For each school, write down the same three lines: full cost of attendance, total gift aid, and the difference. That difference - the real yearly cost - is what you compare across schools, then roughly multiply by four (or five). Two more things to check while you're there:

• Is the scholarship renewable? Some merit awards are one year only, or require a GPA to keep. A big freshman number that vanishes sophomore year is not what it looks like.
• Is the grant "front-loaded"? A few schools weight aid toward year one to win the deposit, then step it down. Ask whether the offer holds for all four years.

For a sanity check on the number you just worked out, the College Finder shows each school's average net price after grant aid from federal data, broken down by family income. If your offer is far worse than that average, that could be one reason to make the call in the next section.

You are allowed to appeal

You can ask a school to reconsider. Two situations where it's worth doing:

• Your finances changed since the tax year used by the FAFSA, the Free Application for Federal Student Aid - a job loss, a medical event, a death in the family. Ask the financial-aid office for a professional judgment review and send documentation. This adjusts need-based aid.
• You have a stronger offer from a comparable school. It is fair to email the aid office, share the competing offer, and ask if they can match or close the gap. Merit aid especially sometimes has room. Be polite, be specific, put it in writing, and attach the other letter.

The worst they say is no, and you are no worse off. Plenty of families leave real money on the table simply because they didn't know asking was allowed.