If you’re lucky enough to secure an offer to play your sport in college, it's important you fully understand the costs associated with attending that school. In this article, we’ll walk you through how to determine the total cost of college after financial aid is applied, the different types of aid you can use to reduce these costs, and how to compare different offers to find the best college fit for you and your family.
Analyzing Your Financial Aid Package
As you progress through recruiting conversations with a college or university, there may come a point where you are given a financial pre-read from the admissions or financial aid office. This pre-read may include an initial assessment of your financial aid package offer, based on the information you've provided.
When you first look at your financial aid package offer, it is very easy to feel lost in all the numbers. A good place to start is by first familiarizing yourself with key concepts that will be referred to throughout the package offer, then identifying the terms associated with the different types of aid. From there, you can calculate the total costs your family is responsible for.
Understand the Key Concepts
- Cost of Attendance (COA): The total amount of money it typically costs a student to attend a particular college or university. It includes costs associated with tuition, fees, room and board, books, supplies, transportation, and personal expenses.
- Estimated Family Contribution (EFC): This is how much the family is expected to contribute toward the student's education, based on factors like income, assets, family size, and the number of family members attending college. It is calculated in the FAFSA application using the information you provide about your family. It is a key component used by FAFSA to determine a student's eligibility for federal student aid. Many schools also use it to determine eligibility for additional aid provided through the institution, to supplement any federal aid you qualify for.
- Value of the Aid Package: The total financial assistance offered to a student by a college or university. It includes federal aid (i.e. Federal or State loans) as well as aid provided by the school through things like grants and scholarships.
- Unmet Financial Need: The gap between the Cost of Attendance (COA) for the school and the financial aid package offered. It represents the portion of expenses not covered by grants, scholarships, and other forms of financial aid. This gap may be closed by the family through funding provided separate from the government and school itself, such as private scholarships, private loans, or out-of-pocket payments (i.e. savings). Unmet financial need should be approached with caution, as a large number could mean your family is taking on significant debt, particularly if you choose to take out loans.
Identify the Types of Aid in Your Offer
- Grants and Scholarships: These are forms of financial aid that you don't need to repay. Grants are usually awarded based on financial need and are provided by governments or institutions. Scholarships, on the other hand, are often based on merit and can come from various sources.
- Loans: There are different types of loans, each with its own repayment terms. Need-based loans typically offer the most favorable terms and are often included in a student's financial aid package. Families can also apply for private loans from lenders like Sallie Mae, Citizens Bank, or SoFi. It's crucial to fully understand the terms of any loans you take out to know what's required for repayment.
- Need-Based Loans: This specific type of loan may be part of a student-athlete's financial aid package, based on demonstrated financial need. Need-based loans are sometimes subsidized and come with favorable repayment terms, such as lower interest rates and flexible repayment options. Unlike grants and scholarships, need-based loans must be repaid after graduation or leaving school.
- Work-Study: This is a type of need-based aid that involves the student working a certain number of hours during the semester. These students receive a paycheck for the hours worked and can be used to cover personal expenses or applied directly to college costs like tuition and fees. Unlike loans, work-study doesn't need to be repaid.
Confirm the Terms
Finally, make sure you can answer these 2 questions for each type of aid:
- Does this aid need to be re-applied for each year? For scholarships, loans, and grants, it's important to know whether the aid applies to all 4 years of college, or whether it needs to be re-applied for and renewed each year. Federal aid, including grants and federal loans, typically requires annual resubmission through FAFSA. Make sure you are aware of deadlines for reapplying if necessary.
- Does this aid need to be paid back? Make sure you know exactly what the terms are for any loans you decide to take out. Loans that are put towards education often have lower interest rates, but you'll want to know exactly what that equates to and whether your family is comfortable making those future payments.
Comparing Athletic Scholarship Offers
While you may receive an offer that includes a large sum of athletic scholarship money, it may not actually be the best financial option at the end of the day. When evaluating your offers, it’s important to remember there are types of financial aid beyond athletic scholarships, and each school will have different attendance costs.
Consider the following example:
- College A offers you an athletic scholarship totaling $10,000 a year in addition to other forms of financial aid worth $15,000. This means you have $25,000 a year to pay for College A. If the cost of attendance for this school is $40,000 each year, your family will be expected to contribute $15,000 each year.
- Now consider College B. This school offers you $20,000 in athletic scholarship money on top of other forms of financial aid worth $10,000. This means you have a total of $30,000 to cover the costs of College B. If the cost of attendance for College B is $60,000, your family is expected to contribute a total of $30,000 each year.
While College B has offered you more athletic scholarship money, College A will be the less expensive option of the two.
Cost of Attendance vs. Estimated Family Contribution
EFC - A Measurement Used to Determine Eligibility for Aid
The Estimated Family Contribution measures your family's financial strength and how much the family is expected to contribute to the student's education. This number is calculated based on the information you provide in the FASFA application, such as your family's assets, how many family members are in college, family income, and family size.
It’s important to note this number is not the final amount your family will need to pay. Instead, this number helps colleges determine the amount of financial need you are eligible to apply for.
COA - The Total Cost of College (Including Direct and Indirect Costs)
The cost of attendance for colleges and universities is a comprehensive overview of all expenses associated with attending a specific college, meaning it depends on a variety of factors. Is it a state school? Or is it a private institution? Is it a 4-year program? Or a two-year program? Private institutions are usually more expensive than public universities, especially if the public university is in your home state.
Other expenses beyond tuition are room and board, textbooks, and food. For example, a city's room and board will be more expensive than a rural area. Another thing to consider is the distance from home. Is a school you are looking at a plane ride away? If so, this is another cost you must add each year if you intend to make any trips home.
Calculating Unmet Financial Need
While the Estimated Family Contribution (EFC) assesses a family's financial strength and ability to contribute to a student's education, the Cost of Attendance (COA) represents the total expenses associated with attending a particular college or university. While EFC informs financial aid decisions by indicating financial need, COA encompasses explicit costs like tuition and fees, as well as implicit costs such as room and board, textbooks, and transportation, providing a comprehensive understanding of the financial obligations associated with attending a school.
Consider the following example:
- The cost of attendance for College A is $50,000, while College B's is $60,000.
- Based on Sarah's family's estimated family contribution of $5,000 per year, she has qualified for $10,000 in annual grants.
- At College A, Sarah's unmet financial need is $35,000 ($50,000 - $15,000), whereas at College B it is $45,000 ($60,000 - $15,000).
- Sarah's family has a $10,000 greater unmet financial need each year ($45,000 - $35,000) if she attends College B.
Adding Other Forms of Financial Aid
In summary, it's important to know that you can receive other forms of financial aid beyond your athletic scholarships. Make sure to consider all the options provided in your package, like grants, scholarships, need-based loans, and work-study. It is important to consider your options carefully to make sure you're maximizing your offer and minimizing the amount of unmet need that may need to be addressed through money out of pocket or loans with interest.
Lastly, keep in mind many forms of aid and scholarships apply to only one year, meaning they must be reapplied for and renewed annually. This means just because you have one offer for your Freshman Year, that does not necessarily mean it will be the same every year. Make sure you understand any renewal requirements when you consider financial aid.