It's that time of year. Some of my students are already getting their final award letters in the mail. College award letters are not very easy to decipher and can be quite misleading. I received a few frantic calls today from parents and students looking for help, as if these letters were written in a foreign language. In a way, they are. 

Let's look at a few letters to see if I can lend some insight. Before we dive-in, here are a few basic things you need to know.

1. Cost of attendance (COA) - Believe it or not, some colleges do not include this number in the award letter. Can you imagine shopping in a car dealership advertising discounts and rebates, but no sticker prices on the cars? A $20K discount sounds great but is that $20K off the COA of a $40K college or a $60K college? Attached below is an award letter from Santa Clara University that fails to disclose the cost of attendance. When you find out the COA is close to $64,000 per year, this discount seems less appealing.

Also note the Stafford Loans that are included as part of the "award." Pay no attention to the loans when calculating costs since these loans need to be paid back.

So this family is basically getting a $24K discount from a $64K college. In the end, this college comes to a true cost of about $40K per year. That's more than double in-state cost (with the HOPE Scholarship here in Georgia).

2. Grants - Whether merit-based or need-based, this is the number where families really need to pay attention. This is a simple discount taken off of the COA. Attached below is an award letter from Furman University emailed to the same family.

The "Bell Tower Scholarship" and "Furman Grant" are of special note. These are the discounts. Together this brings a total discount of about $36K per year. Fortunately, Furman discloses the COA in this award letter of $59,600 per year. Let's round that up to about $60K per year. With the $36K discount, this brings the true cost of Furman down to about $24K per year for this family. That amount brings the cost very close to in-state pricing. This is a great offer.

3. Loans - In these award letters you will find abbreviations for the Federal Stafford Loan broken down as subsidized or unsubsidized. These are federal loans from the government that are in the student's name. With subsidized loans, the accrued interest is paid for by the government while the student is in college. Why are these loans part of the "award?" We may never know, but be sure to account for these loans since they need to be paid back. These loans do not represent discounts or true awards.

4. True Cost - This is the true bottom-line cost of the college. I wish colleges could just present the award letter this way so families don't have to decipher so much jargon. This is how I prefer to present college costs to a family. Attached below is an award letter from The University of Georgia. Can you calculate the true cost?

So Santa Clara comes to $40K per year, Furman at $24K and UGA at about $17K per year. So where should we go? Wouldn't that be an easier way of looking at these costs?

Please note that these award letters have been modified for brevity and to remove any identifying and personal information.

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