How to understand your college financial aid offer

It’s as important as the college acceptance letter but rarely as black and white.

A school’s financial aid offer typically maps out your expected family contribution and what scholarships or need-based aid you qualify for, not only in the first year but throughout your college career.

Financially, a lot is at stake. With prices steadily rising, cost is a major concern when selecting a school for this year’s high school seniors.

At public, four-year institutions, tuition plus room and board for the current school year hit $21,370, according to the College Board. At four-year private universities, the cost was more than double that: $48,510, on average.

However, about two-thirds of all full-time students receive aid, which can bring a school’s sticker price significantly down.

Your net price is a college’s tuition and fees minus grants, scholarships and education tax benefits, according to the College Board.

The first thing families should do is take the time to understand the financial aid award letter — particularly the difference between scholarships and loans, said Ashley Boucher, a spokeswoman for Sallie Mae, which provides loans to students.

“It will show free money, like scholarships and grants, and borrowed money, like loans,” she said. “Not every offer is created equally.

“If you compare a package that has a higher percentage of loans, it might make sense to take a smaller package that has more money that doesn’t have to be repaid,” she added.