Cracking The Code: How to read college financial aid letters

College financial aid is vital, and it is also confusing. When colleges send out financial aid letters, they can contain complicated terms and even grouped estimates that hide the true cost of the offer. Here’s how to unpack the offer letters.

Find The Net

The first step in figuring out the financial aid letter is to determine the net cost or net price of the school. The net cost includes tuition, books and supplies, transportation and estimated personal expenses. Once you have that number, subtract grants, loans and scholarships. This is the cost you’ll pay out-of-pocket for college.

Look It Up

College financial aid letters often contain a lot of jargon. Don’t be afraid to simply look up words and phrases to understand their meaning. Paying for college is no time to just wing it.

Compare Apples To Apples

Once you see the net cost of attending one college, compare it to the other school your kid is considering. As Money suggests, an easy way to do this is to create a spreadsheet that clearly shows the costs side-by-side.

Go Past Year One

Now that you’ve figured out how much one year of college is going to cost you, it’s time to look into the future. Yes, unfortunately, college is four or more years, not just one. Make sure you can afford the costs of college over time.

Call In

If you’re having a rough time with the letter, ask for help. Pick up the phone and call the school’s financial aid department. As you should already know, the only bad question is an unasked one.

Article distributed in partnership with SavvyMoney with reporting by Chris O'Shea