Financial Aid Packages Are Out Early This Year. Here's What You Need to Know.
This weekend, in mid-December, 10,000 students who've been accepted to Michigan State University received their financial aid letters in the mail.
That’s roughly 12 weeks earlier than ever before.
Thanks to a new timeline this year for the Free Application for Federal Student Aid, college-bound students were able to start filling out financial aid forms in October. And now many colleges are able to begin releasing their financial aid letters to admitted students months earlier as well.
A recent survey from EAB, an education research firm, found that 26% of colleges are releasing financial aid offers four to eight weeks earlier than last year, and 31% plan to release offers two to three weeks earlier.
Yet as the first of your financial aid packages arrive in the coming weeks, know that in many cases, those packages will be based on estimated costs and estimated award totals. That's not entirely different than in previous years, especially at public colleges—there are always some estimates because states' budget-setting calendars don't line up well with the financial aid calendar—but it's likely that more students will be receiving estimated packages this year than previously.
In Michigan, universities don't know their exact funding until June, says Rick Shipman, the university's financial aid director. In place of exact funding, the university uses a projection the board of trustees made last year, as well as estimates for housing expenses and state grant funding. This year, that process will be the same, just three months earlier.
“I don’t have any reason to believe that it’s more or less valid doing it now than it would have been in March,” Shipman says.
Colleges are only allowed to give financial aid packages to admitted students, so the ones who are getting letters this month and next month are largely early decision or early action applicants or applicants at colleges with rolling admissions.
Private universities tend to have more flexibility in their tuition-setting calendar than public colleges. At Sewanee: The University of the South, Beth Cragar, associate dean for financial aid, successfully lobbied for the Tennessee private university’s board of trustees to take up tuition setting at its December meeting rather than its February meeting so she'd have solid numbers to send out in earlier financial aid letters. Cragar expected to get approved costs this week, and she’s planning to quickly turnout the first aid letters before the end of the year.
What an Estimated Award Means
Some expenses in a college's total cost of attendance are always estimates. The amount spent on books and transportation depend on an individual's course load and where she travels home to, so colleges generally use averages for those budget lines.
Less intuitive for students and parents is the direct expenses that are estimated—tuition, fees and room and board—and grants that are contingent on still-to-be-approved state and federal funding. Even when tuition is approved, costs at public colleges aren’t permanent until the bursar bill arrives. In the fall of 2015, for example, Iowa's Board of Regents decided to increase tuition at two public colleges for the upcoming spring semester, after originally freezing it.
"It's like buying a car, but not knowing how much the car will cost you until months after you drive the car off of the dealer's lot," says Mark Kantrowitz, an expert on financial aid and student loans.
There aren't any statistics on how much tentative award packages differ from finalized costs, Kantrowitz says. But the changes are relatively small, generally less than a couple hundred for in-state students, officials at public colleges say. And in cases where aid budgets are larger than anticipated, your net costs could actually drop.
While estimated costs and awards may be common this year, the bright side is the other half of financial aid packages—a family's finances—should be more finalized. In the past, families had to rush to fill out their FAFSA as quickly as possible after the form became available in January, often before they'd filed their taxes. Now, families are able to use completed tax forms. As a result, Glendi Gaddis, assistant vice president of Student Financial Services at Trinity University in Texas, says she’s confident the information in the applications she’s received so far won't need as many revisions.
“That will help us with providing families with a more accurate assessment of their eligibility,” Gaddis says.
What You Should Do About It
Be on the lookout for terms such as tentative, estimated, or projected as you're reviewing your packages, recommends MorraLee Keller, director of technical assistance at the National College Access Network. Some colleges may explain why a number is estimated, but others will simply write that the amount is subject to change.
If it’s not clear what specific part of the cost or award is estimated, ask the financial aid office, says Karen McCarthy, senior policy analyst at the National Association of Student Financial Aid Advisors. You should also ask when the college expects to send finalized letters. One of the purposes of moving up the financial aid calendar was so families would have more time to evaluate offers and ask question, so don't be shy.
Along with your financial aid cost breakdown, you’ll also receive some documents or instructions to go to a website to learn more about the offer and the different types of scholarships and loans. Make sure you read everything that accompanies the letter.
Most importantly, financial aid experts say, is that students should remember they have until May 1 to make a decisions. In past years, most students applying for the fall have received aid packages in the same mid-February to mid-March window. Now that window could last for four months instead of one, says Chris Lucier, vice president of enrollment at the University of Delaware. Depending on where you’re applying and when, you may receive some aid packages before the new year and others in March.
"Don't just jump on the first letter you have," Lucier says. "Make sure you understand your full range of options."