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Kids and Money: What financial aid awards letters tell you [The Kansas City Star :: BC-PFP-KIDSANDMONEY:KC]

Families fretting over the size of college financial aid packages they are hoping to receive and how much of their own money they'll have to shell out are starting to get answers.

More college admittance letters are going out to high school seniors, meaning that financial-aid awards letters are not far behind. The awards letters detail how much the school will cost to attend and what kind of financial assistance you'll receive for the coming school year, including grants, scholarships, federal loans and work-study benefits.

While the letters contain the same general information on aid packages, they don't all look the same. That can make it difficult for apples-to-apples comparisons.

Here are some common financial aid award letter mistakes and advice from college experts.

- Be organized and weigh the pros and cons of each offer. Sallie Mae, the higher education financial services company, recommends creating a spreadsheet so you can compare offers side by side.

- Awards letters will refer to "net cost" and "net price."

Net price is the discounted bottom line from the sticker price after subtracting grants, scholarships and other aid that does not need to be repaid with interest.

Some schools emphasize net cost in their letter, which subtracts the entire financial aid package from the sticker price. But net cost generally includes loans, which don't cut college costs because they need to be repaid, with interest.

Net price is the "much better" number to lock in on, according to Edvisors.com, a student loan resource site.

- Review the total cost of attendance. This is the college's estimate of what one full year will cost, including tuition, room and board, fees and even some personal expenses. But the depth of this disclosure can vary - lab fees, books, average travel costs and extra-curriculars aren't always included.

- Don't assume you must borrow the entire amount being offered. An award letter may show the maximum the student or parent can borrow. But it is possible to borrow less.

Sallie Mae's advice: Don't take it if you don't need it.

- Don't make the mistake that the financial aid package is good for the next four years. It's good for the coming year only. You will have to start the process all over again in the fall by filling out the FAFSA, the Free Application for Federal Student Aid.

Likewise don't expect your financial aid package necessarily to keep up with rising college costs. It's been my experience that many schools front-load aid packages particularly with free money for incoming freshmen to entice them onto campus, but are not nearly as generous in subsequent years.

- Appeal to the college for additional financial aid if there have been any unusual circumstances in recent months that could change your family financial situation, things like high medical expenses or a job loss. Colleges all have appeal protocols to follow, but be prepared to present hard documentation of any change in your household finances.

- Look beyond the numbers. Campus culture, sports teams, location and social scene also are part of the equation. But, this still boils down to making the best financial decision - and an expensive one at that.

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ABOUT THE WRITER

Steve Rosen is assistant business editor at The Kansas City Star. To reach him, call 816-234-4879 or send email to srosen@kcstar.com.

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(c)2017 The Kansas City Star

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