When making a college decision based on scholarship or grant offers, it’s also important to consider the type of scholarships awarded. While a large grant or scholarship may seem amazing at first glance, it’s important to apply it to the “sticker” to determine a school’s net cost price (price without a scholarship minus the scholarship amount).
For example, consider a college offering you $10,000 in aid. Seems great, right? While that’s a large amount, consider the school’s “sticker” tuition price of $50,000. Once this aid is applied, your net cost of tuition will be $40,000. That means you’d saved more if you had attended another school with the “sticker” price of $39,000 or under without any
aid – and you can always apply for scholarships and grants outside of your college to get that cost reduced even more.
Also, think about the type of aid that’s being offered. Is it an opportunity that’s renewable or a one-time scholarship? Is the award merit or need-based?
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These factors can help determine the net cost of a college (the amount you’ll actually have to pay in tuition) and fluctuate based on your individual circumstances, so it’s important to calculate all potential factors in determining a college’s affordability.
Here’s a breakdown of what both types of aid awarded by schools can mean for you:
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Merit aid –
This type of aid is awarded without taking a student’s financial situation into account. While this can be useful for students, especially those coming from families with a higher income, it’s important to read the fine print.
There are different types of merit aid, some of which will be rescinded if the student’s grades aren’t maintained. However, some merit grants and scholarships only require a student to pass courses.
While there’s no assumption your grades will falter, it’s important to be aware of the expectations outlined for each opportunity.
Need-based aid –
This is the type of aid for which you’d typically fill out your FAFSA. That way, the school is able to adjust your grant amount based on your financial needs each year.
While this can be a positive aspect awarding you more aid as your needs rise, it can also mean less aid if they determine your needs decline.
Ask potential schools about these policies, as some schools have a policy where they won’t cut the amount of your merit and need-based grants as long as you pass your courses. This is the best type of policy to look for because you’ll have more leeway in case any of your circumstances change.
Remember, you never want to assume your grades won’t slip or circumstances won’t change because life happens. There are sometimes factors out of your control which occur through no fault of your own. You want to be certain that you can afford whichever college you decide upon, even if things happen to change in your life.