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The Attorney General’s Student Loan Assistance Unit gets hundreds of calls each year from students and parents who are struggling with student loan debt. Often, these borrowers report that they did not understand how much they would owe until after they graduated from college.

It’s not surprising that many students and parents don’t know how much they will borrow to pay for college.  Financial aid award letters can be hard to decode, analyze and compare, and costs for subsequent academic years are not always easy to pin down.

In an effort to help students and parents better understand and compare financial aid award letters, the Attorney General’s Office and its Student Debt Working Group with the Greater Boston Chamber of Commerce have partnered with uAspire, a nonprofit organization that provides students with counseling and tools to find an affordable path to and through college.

1. Celebrate, then decide.

Celebrate your college acceptances, but wait to decide where to attend until after you review your award letters and understand the financial cost of your decision. Award letters come in different formats and can be confusing! Use this glossary pdf format of uAspire Terminology 101.pdf
that explains common award letter terms. Click here for an FAQ pdf format of uAspire Award Letter FAQs.pdf
on understanding your award letter.

2. Know the difference between scholarships, grants, and loans.

Many award letters do not clearly separate types of financial aid. See a sample award letter explained here. pdf format of uAspire-Annotated-Award-Letter.pdf
Scholarships and grants are free money and never need to be repaid. Loans must be paid back with interest. While it might be tempting to pick a school that offers a large scholarship, don’t let the scholarship money drive your decision. A school that awards a large scholarship might also charge significantly more for tuition, fees, or room and board. Free money is just one piece of the overall picture. Learn more about the different types of financial aid here.

3. Estimate what each school will actually cost.

The most important number to your decision is the amount you will actually have to pay—either now (the bill) or later (the loans). This is sometimes called the “net cost.” But this number may not appear anywhere on your award letter. To calculate it for yourself, subtract all the free money shown in the award letter (grants and scholarships) from the total cost of attendance. If the total cost of attendance is not listed on your award letter, find it on the school’s website or call the school. Some schools offer a link in your online school account to a Financial Aid Shopping Sheet. Use this standardized U.S. Department of Education form to access simplified and streamlined information about your award letter, including your actual estimated cost.

4. Compare award letters based on the actual cost. 

Keep in mind that the school offering the most financial aid is not necessarily the most affordable. Be sure you are making an apples-to-apples comparison. For example, while some schools may include personal expenses and transportation costs in award letters, another may not. Use online tools such as the Consumer Financial Protection Bureau’s award letter comparison tool to help you identify and compare costs. 

5. Explore and fully understand your loan options.

Award letters typically include student loans from the government, including federal Direct Subsidized and/or Unsubsidized student loans, state loans, and Perkins loans. These federal and state loans are usually the least expensive loan types and often come with flexible income-driven repayment options. As a general rule, you should exhaust these student loan options before resorting to private loans. Make sure you understand the details of the loans, such as interest rate, fees, and when you will need to begin repayment.   

6. Don’t borrow more than you need. 

Keep in mind that you do not have to borrow the full amount of loans offered and can ask the financial aid office to reduce the loans to whatever amount you actually need. You may be able to save money and reduce your total cost of attendance by buying used books, commuting or living off campus with roommates. Be aware that checks provided by your school’s financial aid office for living expenses are often loans that will need to be paid back later with interest.

7. Be cautious with the Parent PLUS and private loan options.

Although some schools may include federal Direct Parent PLUS loans on award letters, the parent is the borrower and must be approved for the loan. It’s not guaranteed that your parent will be approved. If additional loans are needed to help cover the remaining cost of college, explore all of your loan options, including federal Parent PLUS loans and private loans. Keep in mind what is affordable for you and your family, who will be responsible for paying it back, the cumulative amount you expect to borrow, and how big the monthly payments will be. Check out this resource by the Consumer Financial Protection Bureau that provides some great advice on considering additional loans.

8. Add up the total amount you are borrowing and MULTIPLY!

Once you determine the amount you will need to borrow, multiply that by the number of years you will be in school. That is minimum amount you will owe.  Grant and scholarship funding may decrease, tuition and fees may increase, and it may take you longer than expected to graduate. You can use the U.S. Department of Education’s Repayment Estimator to estimate your monthly federal student loan payments under various repayment plans, including income-driven plans. But don’t forget to also consider the monthly costs of any Parent PLUS or private loans that you and/or your family will be borrowing.

9. Plan how you will pay the rest of the bill.   

Remember that you will get a bill from the school for any part of the actual cost that is not paid for with scholarships, grants or loans. Typically, half of this payment is due in August and half is due in January. Keep in mind that if your award letter includes a work study job, that money is not guaranteed and will not be available to pay your bill! First you need to be hired for a work study job and then earn the money over time. Often, work-study funds are most realistically applied towards expenses like transportation, personal living expenses, or books.

10. Take action complete your next steps to unlock the aid you are offered.  

Look for instructions in the award letter about deadlines or next steps to accept or decline the financial aid. If any part of the financial aid is listed as tentative, estimated or pending, make sure to follow up with the school’s financial aid office. Once you have made your decision, be sure to send in a tuition deposit to reserve your spot!

You are not alone! There are resources available to help students and their families as they make the important decision of where to go to college and how they will pay for it. You can get individual help by bringing your award letters to a workshop hosted by MEFA or by calling or visiting an American Student Assistance College Planning Center in Boston or Brockton where counselors are available to help you. You can also visit MEFA’s website or American Student Assistance’s website for additional helpful resources.

Have questions? Need help?  Call the Attorney General’s Student Loan Assistance hotline at 1-888-830-6277 or submit an online Award Letter Help Request for assistance.

College is a major investment of your time and money. It’s important to understand what you’re getting. If you haven’t already done so, use to learn more about each school, including the costs of attendance, graduation rates, and the average earnings of their graduates. Pay particular attention to graduation and retention rates, as these are strong predictors of how likely you are to complete your degree. If you are considering a for-profit school, first read this important information .