Your child has worked hard for years, and now the fruits of their labor are ready for harvest. March is the time when the scholarship offers begin to roll in for high school seniors across the nation. Mom and Dad are perhaps at their proudest and schools begin to woo your senior in earnest. It is a time of joy and celebration but it can also be a confusing time for those with multiple offers. How do you make sense of these offers? Let’s spend a few minutes talking about it.
Start by getting organized. The scholarship offers should all come in letter form, so collect all of those letters and sort them by school. Create a spreadsheet or a simple handwritten table with each school’s name at the top of each column. Then review each letter to determine the details of the award. Put the awards that are renewable each year at the top of the column and put the one-time awards next in the column. For all awards that are dependent on choosing a particular major or program, place those at the bottom of the column.
Some of the renewable awards might say “full tuition, books, and fees” instead of a specific amount. You can handle this by checking on the school website for the projected costs for each of these categories for the upcoming school year and using those values instead. Make sure that you understand if tuition includes in-state or out-of-state amounts and plug in the proper amount.
Next, we’ll annualize each school’s offer. What this means is that the recurring awards should be converted into the annual amount if not readily available. Divide the one-time awards by four to determine the annual amount for each of these scholarships. Finally, for the department-specific awards, convert those to an annual amount by determining if they are renewable or one-time and treating those like described previously. Sum up the annualized offers from each school and to find the total year-one award that the school is offering.
Your child might also receive scholarship offers from independent sources that can be used at any school. Those offers should also be converted to an annualized amount if not already in that form and added to each school’s total amount. This is because that amount needs to be factored in at all schools, although you will only use it at the one you attend. The alternative is to leave off these awards because they are the same wherever you go, but I like to include them so that you can determine the total out-of-pocket or surplus for each school.
On each school’s website you should be able to find the total first-year cost for an incoming freshman. Transfer that information to the table or spreadsheet below the total award amount for each school. Be sure that the expenses include everything that your child may spend, and be sure that you’re looking at the total yearly cost and not just the first semester. Also make sure that you pull the right number from the in-state or out-of-state student category as applicable to your child. Many schools now require first-year students to live on campus and have a meal plan so be sure that room and board are included if applicable. Make sure that you include an amount for books and supplies if not factored in to the school’s total cost.
Here’s where the fun begins. Subtract the total first year cost from the total annual award amount. If the amount is zero or positive, congratulations – your child can go to that school free for the first year, and any positive amount will be refunded to your child. If the amount is negative, that is the out-of-pocket cost that your child will incur during the first year.
There might be other money or opportunity from grants depending on your family’s situation, but this gives you a way to normalize all of the offers so that you understand the real financial impact. In the next post we’ll try to figure out what it all means and help you with the decision-making process.