Understanding Your Financial Aid Offer

Financial aid offers have begun arriving in mailboxes across the country. If you’re planning on considering costs as you choose a college, it is important to be able to accurately compare those aid offers. While the federal government requires aid offers to be formatted one way, years of experience tells me that there’s a simpler way to compare school costs. Here is my simple two-step process for comparing aid offers. 

First, identify the direct costs (and know the difference between indirect costs)

Every aid offer should have costs split into two major categories. Those categories are:

1. Direct costs—tuition, housing and food, and mandatory fees

• These are an estimate of the costs that would be charged by the college or university.

2. Indirect costs—personal expenses, transportation, books, supplies, equipment, etc.

• These are an estimate of the costs that would be paid to someone other than the college or university.

Pro tip #1: Indirect costs are heavily influenced by the student’s habits and choices. These costs are not typically all that different from institution to institution, unless the campus is located in a high-cost city, or your student will be traveling longer distances to and from one campus as compared to another. So, when comparing costs, I highly encourage families to just consider the direct costs.

Pro tip #2: Pay attention to the tuition calculation that each school is using. CMU bases our tuition estimate on 15 credits per semester, which is what is needed to graduate in 4 years. Most schools use a similar figure, but occasionally a college will estimate based on 12 credits per semester to make their costs appear lower...keep those eyes open!

Pro tip #3: Make sure you know what the housing costs are based upon. They may be based on living on campus, or they may be based on living off campus. At CMU, initial aid offers for all incoming freshmen are based on living on campus, while aid offers for transfers are based on living off campus.

Once you know the direct costs, subtract the scholarships and grants being offered

Scholarships and grants will appear on your aid offer. They are also called gift aid, meaning they never have to be paid back. Since most students will happily accept this free money, you can subtract that total from the direct costs to give you a good idea of the cost your family will have to manage for the first year of college. This is a basic and pretty accurate way to compare costs across schools.

While this simple two-step equation (direct costs – gift aid) allows you to compare costs among schools, there are several additional steps to take if you want to know more about what your bill might be. Will your student be taking any student loans? Have they received any outside scholarships, like a community foundation award? Will they be working on campus in a work-study job? Do you have a college savings plan account? How many credits do they plan to take? What meal plan or housing option will they choose?

The college search process may be nearing an end for your students. We want to help you be equipped to make your decision with confidence.

Have a great day, and Fire Up Chips!

Bob Garcia

Executive Director of Admissions