By Dan Fenyo
So, you’ve gotten your financial aid package in the mail and tore it open only to find a sheet of paper so densely cluttered with verbiage that you nearly fainted. Sound familiar? If so, I thought today would be a good time to break down what some of the lingo you’ll encounter on a financial aid package means for you (and your wallet!) I’ll be referencing our financial aid letter specifically, but much of the language I discuss will be common to any school your child applies to.
Right off the bat, the first two big numbers you’ll see are Resident Cost and With Parent/Commuter Cost. These values represent the overall cost of tuition plus residency if applicable. Resident Cost, obviously, is a significantly higher sum as a result of Housing and Meals; these are what we call Direct Costs – that is, the costs directly associated with your student attending college. You might also see a series of Indirect Costs such as Books and Supplies, Transportation, and Personal Expenses. These values are estimates and based on what a student will likely spend in the course of a year. If a commuter student is eating filet mignon and oysters Rockefeller for lunch every day, you can bet their Indirect Cost is going to increase quite a bit! On the other hand, students who buy used textbooks and opt for more cost-effective supplies may see those expenses decrease. It’s generally safer to budget too much over too little, so estimates tend to err on the higher side. Direct and Indirect Costs combine to create a student’s Estimated Cost of Attendance which, as I mentioned, is probably slightly higher than the real cost.
Next up, we’ve got information about Grants, Scholarships, and Loans. Grants and Scholarships are, in short, free money! Those monies are disbursed to your account and never need to be paid back. MSMC offers our accepted students a merit scholarship worth between $6,000 and $18,000, a residency grant of $2,000 for students who reside on campus, as well as several other types of grant. To find out what you’re eligible for, contact your student’s Admissions Counselor! The grants and scholarships from the Mount are generally conditional or merit based, but you may also qualify for state or federal need-based grants such as a Federal Pell Grant. Those awards are based on the information you submitted as part of the FAFSA.
Below grant and scholarship information, you’ll finally get to the big, bad, 4-letter word of Financial Aid: LOAN. In particular, your package will list three different types of loans: Subsidized, Unsubsidized, and Parent Loan. Unlike scholarships and grants, loans do need to be repaid and each has its own terms. Federal Direct Subsidized Loans will not accrue interest on their principal until after your student graduates. Federal Direct Unsubsidized Loans will begin accruing interest as soon as they’re disbursed. To keep compound interest from piling up, it may be wise to manage that accrual while your student is still in school. They might even apply for a loan from the Bank of Mom and Dad to help stave off that Unsubsidized interest! The Federal Direct Parent Loan is the final and biggest chunk of change you’ll see on a financial aid package. This value is derived from the Estimated Cost of Attendance minus the other forms of aid offered. Payment of the principal of all three types of loan can be deferred until six months after your student graduates from college. Either you or your child are able to make payments against any loan earlier than six months after graduation, of course.
Wow! That was a lot of information! If you’ve got questions (and you should!), you’re always welcome to direct them to your child’s Admissions Counselor, or the Office of Student Financial Services directly. When you’ve got entire teams of people ready to help, there’s no reason to go at it alone! Now, wasn’t that interesting?
Daniel Fenyo has been an admissions counselor at the Mount since September 2018. A lifelong Hudson Valley resident, he enjoys reading, writing, and all things nerdy in his free time.
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