Seniors, by now you’ve started receiving financial aid award notifications. The award packages may seem a bit confusing at first, and questions may arise about the types and amount of aid awarded to you. Have no fear, I can walk you through your package and answer the questions your family might have during this exciting yet stressful time.
How do you interpret what is being offered to you?
As you may know, there are four types of financial aid:
- Scholarships do not have to be repaid and can be awarded for various reasons, and some are renewable if you maintain certain criteria such as grade point average.
- Grants are also free to the student and do not have to be repaid. This award is based on the family’s financial need as determined from your FAFSA results.
- Work-study is the opportunity to be employed by the college so you can earn money while you are a student. Remember not to add work-study dollars towards your bill as the funds are not available until you work your hours.
- Loans allow you to borrow to pay for college, but must be repaid. Some loans are interest-free while you are in school, and other loans have interest that begins accruing as soon as the funds are put into your account. Check out this Loan Chart for details.
Will the financial aid offered to you cover all of your costs?
Some colleges list their cost of attendance on the award package, but if not, go to their website to determine their total cost of attendance. To better understand if you will have enough money to cover all of your expenses, you’ll need to understand the direct versus indirect costs of college.
Direct costs are what the college will bill you for the upcoming fall and spring semesters. It will include tuition and fees, and textbooks and supplies. If you will be living on campus, housing and meal plans are also considered an expense. All combined, those expenses are considered your direct costs of attending college.
Many colleges will include an estimate for indirect costs as well – think of it as a budget. Indirect costs can include personal items like food, entertainment, and clothing – and transportation costs like gas and airfare. As a family, determine if you plan to cover these indirect costs with your financial aid, money from savings, or from a part-time job while going to college.
What if all of my college costs are not covered?
Your college(s) may not be able to cover all of your costs; this is referred to as “gap” or “unmet need.” In this case, loans are offered to you first, and then there’s another loan called plus loan that’s offered to your parent(s) 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 I stress having multiple college options.
What if I applied to more than one college?
After you receive your award package(s) and have compared packages, you’ll 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 department. Your financial aid (except work-study) will go directly to your student account to cover your direct expenses at the college.
All and all, remember to read through all paperwork received from the college and take action on anything that requires a response. If you have questions or need help interpreting your award package, feel free to reach out to EducationQuest for help!