He had worked so hard. The essay had taken a lot of energy and worry. The response
finally came: ADMITTED to his favorite school. And it was a stretch school so he and
his family were even more excited. He insisted Dad send the deposit that day. In the
euphoria of success, the non-refundable deposit was sent. But the family didn’t know
how much the college would cost. Neither did they know what the financial aid
package offered. This family bought a close to one hundred and fifty thousand dollar
product without seeing the price tag.
The financial aid award letters list the money the college is willing to contribute to
your student’s education. This money comes from the federal government, the state
government, and/or the college itself.
Any money with the word “grant” or “scholarship” next to it is money that doesn’t
have to be paid back. This can be a Pell grant, a state grant, or even a college grant.
Any money with the word “loan” will have to be paid back. The most common loans
are the Direct Stafford loan (which comes in Subsidized and Unsubsidized) and the
PLUS loan (a loan for the parents). Families can find additional loans at private lenders
like Sallie Mae or Wells Fargo.
Direct Stafford loans are in the student’s name only and need to be paid back beginning
6 months after the student leaves college. If the student drops out of college, the loans
still have to be paid back. The PLUS loan is in the parent’s name. Payments start about
30 days after all the money is sent to the college (usually about February of the school year).
This means parents are making payments while the student is in college and for many
years after graduation.
Our excited student received his financial aid letter AFTER committing and paying
his deposit. Unfortunately, after he was given the grants and loans for which the college
felt he qualified, his family was left with $25,000 per year to finance. The family decided
they could not manage over $100,000 cost over four years. The young man lost his deposit.
He lost his heart which was already at the expensive college. He was miserable (and
miserable to live with) for the next several months.
See the process through. Know you cannot decide until you know the true cost to the family.
Don’t get caught choosing on emotion only, setting yourself up for disappointment. Don’t get
caught attending a “caviar college” on a “tuna fish budget,” otherwise you may never finish
college and be stuck with an insurmountable debt.
Susan Teerlink is the accountability and admissions coach for College Funding Advisors, LLC,
located in Harrisonburg, VA. She was also a co-author on the book Secrets Of How To Avoid
Overpaying For College and is involved with GRASP, the Great Aspirations Scholarship
Program, a non-profit based in Richmond, Virginia. You can read her other articles at