Most college admission decisions will be released by the end of this month, and with an impending reply date in early May, a projected 3.3 million future freshmen and their families are evaluating financial aid packages. Sallie Mae, the nation’s No. 1 financial services company specializing in education, offers tips and tools to help meet the decision deadline. The financial aid award letter provides a determination of financial aid eligibility and the type, amount and source of aid for the upcoming year. Families can then figure out how much they will need to finance — not just for next year, but for the next four years. “Students and parents should weigh the cost and affordability of college as a family,” said Charlie Rocha, senior vice president, Sallie Mae. “There are a number of options available and it’s important that they do their homework together in order to best realize their return on the educational investment.” According to a national study from Sallie Mae and Ipsos Public Affairs, collaboration on college choice was rare: only 15 percent of families said parents and students shared in the decision on where the student will attend. Further, while three-quarters of students and parents agreed they should share responsibility to pay for college, only one-quarter made joint decisions on how to do so. Evaluating college costs takes more than a side-by-side analysis of financial aid letters, but that’s now easier with a new tool. More than 600 colleges and universities nationwide are offering a financial aid “Shopping Sheet” for the 2013-14 school year. Introduced last summer by the U.S. Department of Education and the Consumer Financial Protection Bureau, the Shopping Sheet presents information about the cost of attendance, financial aid options, graduation rates, and other data in a standardized format. The Federal Pell Grant is usually awarded to undergraduates who have a high degree of unmet financial need. For the new award year, the maximum Pell award will be $5,645, an increase of $95 from the current maximum of $5,550.
Also new this season are slightly higher origination fees on the William D. Ford Federal Direct Loan Program. For students, the fee rose from 1 percent of the principal to 1.05 percent for Subsidized or Unsubsidized Federal Stafford Loans. Parents and graduate students taking out a Direct PLUS Loan will now pay 4.20 percent instead of 4 percent.To help families pay the expenses the aid package won’t cover, here are some practical funding options:
- Continue to apply for scholarships. Using Sallie Mae’s free online Scholarship Search, students and parents can quickly identify scholarships still available for the upcoming school year, including many with deadlines between now and the end of summer. The scholarship search is available at www.SallieMae.com/scholarships.
- Call the financial aid office to discuss special circumstances. Colleges may be able to adjust their award packages if a family’s financial situation has changed significantly.
- Consider a private education loan to supplement financial aid. A private education loan may be right for those who still have a gap after exploring federal financial aid or who want to investigate whether they qualify for a lower interest rate based on good credit. Students should consider interest rates, fees, repayment terms and borrower benefits of various loan products. With Sallie Mae’s Smart Option Student Loan, students can graduate with less student loan debt by opting to make payments while in school. To learn more, visit www.SallieMae.com/ChooseSmart.
- Earn extra money for college through Upromise by Sallie Mae. Upromise members can earn cash back when they make eligible purchases while shopping at Upromise with hundreds of participating companies or when they use their Upromise credit card.
- Budget with a payment plan. Besides financing an education with grants and loans, families can pay as they go by enrolling in a payment plan. Available at hundreds of college campuses, Sallie Mae administers tuition payment plans that let families spread tuition payments over a number of months instead of making a large lump-sum payment. Visit www.SallieMae.com/tuitionpay for more information.