Understanding College Acceptance Letters and Financial Aid

CHICOPEE, Mass. (Mass Appeal) – Now is the time of year when colleges send out award letters to accepted students informing them what financial aid they are receiving. But there are warning signs that parents don’t see in those letters. College expert, Paul Hemphill, told us what parents needs to look for.

What is the vocabulary in these letters that parents ought to be aware of?
Colleges are the grand masters of deception! They use the word “award,” “scholarship,” and “grants,” to make you feel warm and fuzzy inside that your child is the lucky recipient of gobs of money. The “award” is nothing more than the bill: here’s what we’re giving you, but here’s what you’re giving us. Scholarships and grants are nothing more than a discount off the price of the cost to attend the school. A college never gives you money. NEVER! It’s a discount!

Is there a sentence or phrase that parents should notice?
Yes. “This is your award amount.” If you look closely, you will see that god-awful 4-letter word that will send chills up your back when you grasp its meaning. That 4-letter word is – can I say it on TV?! – LOAN! It’s like hot-pepper sauce on top of your vanilla ice cream. It’s there purposefully to spoil your mood. How does anyone “award” you a loan? When a bank gives you a loan, does it call it an “award?” No! So you need to calculate what you can afford and what the college is giving you. If you want to attend BostonCollege for $62,000, and you were awarded a 30,000 scholarship, you still have to come up with 32,000! For most families, that figure is not doable. So many students will realize they should not applied to these high-priced colleges in the first place.

Do colleges give a student a lot of aid in the first year but reduce it in the following year?
Be on your guard for what is known as front-loading of grants. Before you even get the award letter, contact the school by email and ask if they front-load their grants and scholarships. Some will tell you they do, some will say they don’t, but you want to get an answer to this question: “Which of these awards will my student not receive the following year?” The answer will be very revealing, which may force you to get more clarification if you think their answer is vague. You need to know what you will be spending.

Should parents watch out for the term “work-study?”
Oh yes! Work-study is another one of those terms that makes you think you’re going to be paid to study because you’re working at it! No! Colleges will tell you there are plenty of jobs available, but no one is going to hand you a piece of paper and say, “Go to Building X and get your job.” It’s up to you to get the job, but the college doesn’t tell you that. Here’s my tip: Decline the work-study entry, and if you really want a job on campus, go over to the college’s food service office and you’re very likely to get a job there because students never think to apply for a job at the school’s food service office at 9 bucks an hour.

What do colleges say about a private local scholarship that’s given to a student by an organization like the Rotary Club, a church, or a Boy Scout troop?
Lots of colleges will salivate uncontrollably at the thought that you have a private scholarship. For example, you received a $5,000 scholarship or discount from the college – remember there’s no cash transacted. Your child received a $500 scholarship from the Rotary Club. The college will reduce their discount from 5000 to 45 hundred dollars and take your $500 of cash to bring the discount back up to $5,000 again. That’s highjacking a scholarship. They didn’t give you cash with their scholarship, but you’ll be forced to give them them the $500 in cash you received.  Some colleges will allow you to substitute your private scholarship for 500 dollars worth of loans. But get in writing the college’s policy on private scholarships.

Do the private colleges – the most expensive ones that are not state colleges -have anything parents ought to be aware of?
Yes! These colleges, which charge outrageous amounts of money, will assume that your child worked during the summer and earned $2,000. Then they subtract that amount from the college’s financial package. You will see no evidence of that subtraction anywhere, which means you will not be able to figure how they arrived at the financial aid amount they’re giving you. That’s like your employer telling you that we assume that you have a second job, so we’re deducting what we think you are earning in that second job from what we are paying you. If that happened to you, you would file a law suit against your employer and win the case. The college is immune to such a lawsuit. But for clarity, email the college and ask if they do this.

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