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In my senior year of high school, as college decisions were released, opening the financial aid award letters was scarier than the decisions themselves: the final number, or net cost, could make or break my ability to attend university. To confuse matters, without an understanding of financial aid terms, award letters can be hard to read; each school’s letter can look different and are full of ambiguous terms and unexplained costs. No matter how well a particular award letter was laid out, I was unsure what exactly I would have to pay. If you are a senior in high school planning to go to college, becoming financially literate is incredibly important.

In June 2018, New America and uAspire published a report on financial aid stressing the need for greater transparency in financial aid award letters. Their primary findings show that not only is the financial aid often insufficient in meeting students’ needs, but award letters themselves are confusing, making it difficult to understand just how much college will cost. The lack of consistency and clarity makes comparing costs of attendance across colleges an enormous challenge.

As you begin to consider financial aid and college, keep in mind these three things:

1. Choose a college based on all the relevant financial information. This includes not just the net cost to you, but also the expected return on investment of your degree.
2. Weigh the options available to you, especially the question of borrowing money.
3. Know that financial aid is negotiable. Learn to become financially literate, communicate with the financial aid office, and be your own advocate. 

Analyzing Your Return on Investment

Many studies have shown that on average people who have college degrees will earn significantly more throughout their lifetimes than those who only have a high school education. Furthermore, jobs that require a college degree often come with better health care and retirement options, increased career flexibility, and job security. What you choose to study in college can also have an impact on your earnings after college and therefore on your return on investment. An Urban Institute report from 2018 found that future earnings can be dependent on the university and the major that a student chooses. Do research into your expected career earnings with your chosen program of study and the amount of debt students from the schools you are interested in usually incur (a great place to start is checking out the College Scorecards). From this information you can get a rough estimate of what your return on investment would be for each university.

Weighing Your Options

Borrowing money can be a scary decision, but with proper research and resources, it can be beneficial. Many sites, like Khan Academy, can help you weigh the pros and cons of taking out loans. There are many questions to ask yourself: Who is the loan provider? Is it a federal or private loan? What are the loan terms? If you choose to take out a loan, FSA provides a repayment estimator, which allows you to check on your loan status and determine a timeline for repaying the money you borrowed.

Becoming Financially Literate

There are a variety of no-cost opportunities to improve your understanding of financial aid. First, the Federal Student Aid office provides a variety of tools that explain terms on award letters, including information on how to compare letters. Furthermore, FSA just released the myStudentAid mobile app, which allows students to complete FAFSA applications, manage loans, and access all of FSA’s resources through one platform. Working for FSA I came across a tool from Next Generation Personal Finance that allows you to estimate how much college will cost based on your personal decisions. Using these and other resources is a good first step in learning how to advocate for yourself when it comes to paying for college.

Learning to Self-Advocate

After understanding your award letter and the process of taking out and repaying loans, you will be more prepared to advocate for yourself in the financial aid office at your chosen university. Many schools allow students to negotiate their financial aid packages by providing more information and explaining their financial situation in more detail.

Drawing on my own experience, sometimes obtaining the funding you need is dependent on your own initiative. While schools may say they will meet all demonstrated need, there are times when a little self-advocacy can go a long way to getting the funds you and your family need. For example, my financial aid package offered me work study, so in the fall of my freshman year I applied for a work study job and received an employment hire from a nonprofit. However, when the company attempted to process my hire request, the financial aid office told them I was not on the work-study list and therefore ineligible for this job. I spent the next few days calling the financial aid office and my future employer until the office determined they had indeed made a mistake.

There are many reasons to talk to the financial aid office throughout your college years. For instance, most universities have an emergency aid fund to help with many temporary financial stresses, such as housing problems, food assistance, and gap funding for between financial aid payment periods. You may never know about these resources unless you ask. In addition, funds often exist for study abroad and internship opportunities.

Over the last three years, my parents and I have reached out to the financial aid office time and again to explain our changing financial situation. Through our persistence, they have increased my aid and met my family’s needs. Without reaching out and asking for help, college could have ended up being an immense hardship for my family.

Perhaps the biggest lesson I have learned about paying for college is this: there is a way to make attending college affordable, but it is important to keep yourself educated at every step of the process, from analyzing your financial aid award letter, to managing your loans, to continuing to negotiate with the financial aid office once you have arrived at university.

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