This is the time of year when high school seniors begin receiving financial aid award letters.
It is also the time of year when I get many phone calls from parents who are utterly confused by what exactly the schools are offering them.
There is a reason why financial aid letters are extremely confusing: there is no national, standardized approach to how these letters are supposed to be formatted. I have seen universities that provide very easy-to-read award letters, and some created by colleges that seem as though they were written in Esperanto.
The most important things that you have to remember are that financial aid comes in two basic categories: free money and loaned money. The “loaned” financial aid should be fairly obvious, because families will usually find a combination of federal loans and perhaps recommended private loans. Regarding free money, it becomes a bit more complicated. Schools sometimes call their free money awards “scholarships,” “grants,” “fellowships,” or other terms that don’t necessarily immediately scream free money.
My recommendation to all parents is to always feel free to contact the financial aid office and have them explain, item by item, what is in your letter. There are no dumb questions, and having worked in a financial aid office, I can tell you that the people who work at financial aid offices expect you to have many questions once you receive your offer.