Seniors, are you worried about tuition costs? The fact is most students need help paying for school. It’s nothing to be embarrassed about. College is expensive! I was the poster child for financial aid when I was in college, so my goal is to make this process easy for you to understand.
If you’ve read my earlier blogs, you already completed the Free Application for Federal Student Aid (FAFSA). If not, no worries. There is still plenty of time to apply. Check out the links at the bottom of this blog for details.
For now, let’s focus on understanding award letters. All of the colleges you listed on your FAFSA will send you award letters if you were excepted for admission at those schools. The award letters may seem confusing, so read on to learn how to decipher their content.
Types of Financial Aid
It’s helpful to know what types of funds colleges are able to offer you before you review your financial aid packages. You might have one or more of the following types of financial aid on your award letter:
- Scholarships do not have to be repaid and some are renewable if you maintain certain criteria, such as a specific grade point average.
- Grants do not have to be repaid and are based on financial need as determined by your FAFSA results.
- Work-Study allows you to be employed on campus so you can earn money while you are a student. However, the funds are not available until you work your hours.
- Loans allow you to borrow money to pay for college, but they must be repaid. Some loans are interest-free while you are in school, while other loans have interest that begins accruing as soon as the funds are put into your account. Check out this Loan Chart for details.
Direct vs. Indirect Costs
Some colleges list their cost of attendance on the award letter, but if not, contact the financial aid office to learn their total cost of attendance. To better understand if you will have enough money to cover all of your expenses, you will need to understand direct versus indirect costs.
Direct costs are what the college will charge for the fall and spring semesters, including tuition and fees, books and supplies, and room and board (if you plan to live on campus). Combined, those expenses are considered your direct costs of attending college.
Many colleges estimate your indirect costs as well…think of it as a budget. Indirect costs can include personal items like food, entertainment, and clothing, as well as transportation costs like gas and airfare. As a family, determine if you plan to cover these indirect costs with your financial aid, savings, or a part-time job.
Unmet Financial Need
Your college(s) may not be able to cover all of your costs; this is referred to as “unmet need.” In this case, you will be offered student loans and your parent(s) can borrow a PLUS Loan if there are remaining costs to cover. Your other choices might be to set up a payment plan with the college, take out an alternative loan, or perhaps choose a more affordable college. This is why it’s important to have multiple college options.
Compare Award Letters
After you receive award letters from each college you applied to, compare them to see which college offers the best deal. Look at the amount offered in scholarships and grants versus student loans. Many students need to borrow each year they are in college, and the loan limits increase each year as well. You don’t want to leave college with a huge student loan burden.
You will need to decide on a specific school. Accept or reject each type of financial aid awarded to you from that college, then sign and submit it to the college’s financial aid office. Your financial aid (except work-study) will go directly to your student account to cover your direct expenses at the college.
Read all documents sent from the college and take action on anything that requires a response. If you have questions or need help interpreting your award letter, reach out to EducationQuest for help.
Other related blogs from EducationQuest: