TO HIGH SCHOOL seniors, getting accepted by a college is half the battle. The other half is now arriving in mailboxes.
Colleges are sending out financial aid award letters that list the cost of a freshman year and how of much of it will be covered by grants, loans and work study or come out of the family's pocket.
The information can be confusing. A recent Harvard University study of top high school seniors found that some had "self-defeating" responses to aid. For example, students were "excessively attracted" to loans and work-study, although those have less value than grants.
Families usually have until May 1 to respond. That leaves just a few weeks to compare aid packages and make a decision that could have financial repercussions for years beyond college. Students leave college with an average of $18,900 in loan debt, according to Nellie Mae, which provides loans.
Jamees McGeever, a 19-year-old college freshman, weighed aid offers from eight schools a year ago. "It was really a roller-coaster ride. I was going to one college one second and the next second I was going somewhere else," McGeever said. "I was at the point of tears so many times."
At the start, her heart was set on George Washington University. After attending a small private high school in Atlanta, the Georgia native relished the idea of a big school in Washington.
The freshman year price tag was $40,000 with housing and other expenses, and the school's aid package totaled $17,225. That left a $22,775 shortfall.
Her mother, a single parent who is retired, wasn't in a financial position to help, McGeever said. The teen would have to make up the difference in loans, something she didn't want to do.
She also turned down offers from two other Washington schools, each with an annual cost of about $40,000. One offered only loans; the other's aid covered just half the cost.
As McGeever was resigning herself to staying in Georgia, where she could attend a state university tuition-free, she received offers from Skidmore College in upstate New York and Goucher College in Towson.
Skidmore's package of a loan, work-study and grant covered $27,100 of the $37,500 school-year costs, and the college courted McGeever by flying her in for a visit. But Goucher's offer required less borrowing. In response, Skidmore sweetened its offer, and Goucher countered.
McGeever chose Goucher, whose aid package of $24,725 package is mostly grants and scholarships. The school year costs $31,000, leaving McGeever with about $7,000 in loans.
"It's not bad at all compared to what it could be," she said.
Award letters typically list the cost of the freshman year, including tuition, housing, books and transportation, and say how much families are expected to kick in. They also list the aid the college is offering, such as:
Gift aid: This includes grants and scholarships, and is the best kind because students don't have to repay it. Students should find out if there are any terms to maintain this aid. For example, some can lose a scholarship if their grades fall too low.
Work-study: You don't have to pay this money back, but you have to work to get it. Under this federally subsidized program, students typically work 10 to 15 hours a week on campus. Some freshmen, though, find juggling a job and classes is too much, experts said.
Student loans. These must be repaid, but the terms vary.
Federal Stafford loans, for example, permit a freshman to borrow up to $2,625. A subsidized Stafford loan is based on need, with the federal government paying the interest on the loan while the student is in school and during a six-month grace period after graduation.
An unsubsidized Stafford loan is available to all students, regardless of income. Interest is charged immediately, but students can let it accrue and be added to principal, with repayment beginning after college.
Federal Perkins loans are subsidized and based on need. Repayment begins after college.
Aid and the family contribution may not be enough to cover all costs. "The reality is, 90 percent of colleges don't meet the full need," said David Gibson, a college adviser with Baltimore City College.
Parents can cover a shortfall by borrowing. A Parent Loan for Undergraduate Students, for example, allows parents to borrow the cost of attending college after financial aid is subtracted. Repayment begins while the student is in school.
Private loans are available, but be careful of the terms, warns Gina Lee, financial aid officer for St. John's College in Annapolis. Some lenders bump up the interest rate if a payment is missed, she said.
Students also can appeal an aid package. Schools often revise their offer if a family's finances take a downturn, such as a job loss, experts said.
"The largest offer may not be the best," said Mark Lindenmeyer, director of financial aid for Loyola College in Maryland. "You don't look at the total amount, you look at the components."
A big aid package that consists mostly of loans may be worth less than a smaller package with more gift aid, he said.
Help in evaluating financial aid is available at www.collegeboard.com and www.wiredscholar.com.
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