What you need to do is look at the whole financial aid picture. To help you get a handle on the big picture, here are some questions about financial aid that you should ask about a college or university.
Need Based Financial Aid Questions
In the United States, financial need is determined by the government after you fill out your Free Application for Federal Student Aid (FAFSA) form. Based on your need, you will be eligible for a certain amount of need based aid in the form of federal programs such as Pell Grants and student loans.
Colleges and universities also look at your financial need -- especially private colleges. Many of these schools give students generous gifts to cover a large percentage, or even all, of a student's financial need.
Because of this, one important question to ask a college or university is this: what average percentage of financial need is this school able to meet? If it's a very high percentage, a school may be much more of a bargain than you thought. You'll also want to find out if the school meets this percentage for all four year, and if the financial aid comes as a tuition discount, as work study, or in some other form.
Merit Based Financial Aid Questions
In addition, schools offer financial aid based on merit. Usually this means academic merit, but some merit aid is based on athletics, artistic achievement, community service, or other factors. At some schools, merit scholarships are very competitive, but at others, they are given away to a large percentage of the student body. Some merit scholarships are only available to in-state students, and many schools offer funding to National Merit Scholars, valedictorians, and salutatorians. Merit aid is almost always in addition to need based aid, so you can be eligible for both,and you can get merit based aid even if you don't qualify for need based aid.
When applying to schools, be sure to ask for the specifics about merit based aid. Find out how much is available, the conditions for receiving it, and how to apply. Also, find out if the aid is for all four years, and what GPA you need to maintain to keep this aid.
Alumni Scholarship Questions
Many schools offer alumni scholarships if your parents (or sometimes other family member) also attended the school. These are sometimes called legacy scholarships. Alumni scholarships usually are not competitive, but many do require that your parent belongs to the school's alumni association. Most alumni scholarships are for relatively small amounts of money, but many schools offer a few large awards to exceptional legacy students. These kinds of awards are highly competitive.
If your parents went to college, it's probably worth your while to contact the schools they attended and ask for the specifics about alumni scholarships.
Student Loan Questions
Colleges and universities are not in the business of student loans; these come from banks. However, there's one question you'll want to ask schools, and that is, What is the average loan debt of graduating seniors, and how does this compare nationally? If the loan debt is pretty low, that means that the school does a good job helping students find other kinds of aid. If it's high, that should be a red flag.
Keep it in mind that this statistic can be somewhat misleading. For example, if there are lots of wealthy students at the school, these students might not need financial aid, so the number might be lower than it is for a student of more modest means. However, finding out the total loan debt of students is still an important part of the big picture to consider.
Student Satisfaction with Financial Aid
A final question to investigate is this: How happy are students with the financial aid system at this school? Obviously, you might not get a reliable answer from the school, so ask current and former students (try using Facebook and MySpace college discussion pages). The Princeton Review does offer a ranking of 20 schools with the happiest and unhappiest students about financial aid, but you'll want to find out about other schools too.
Paying for a college education has become an overwhelming feat for many students and their families, and the more information you have about a school's bottom line, the better. These questions will give you a better sense of the "big picture" when it comes to what a school will really cost.