The excitement of being accepted to the college you plan to attend often turns to confusion when students receive their financial aid notifications. The following information can help you understand financial aid offers.
Financial aid is not necessarily free.
Scholarships and grants are "gift aid," meaning you don't need to repay these awards. However, loans and work-study can be included in financial aid offers, and these types of financial aid require something from you. Work-study is not a guarantee of funds — you must find and be hired for an eligible job and then work the hours required to receive the pay. Any loans you take must be repaid, with interest, after you leave college.
Your bottom line will vary by college.
Each college offers a unique financial aid package, even though they received the same financial information from you. The cost of attendance includes the direct costs (charges billed by the college) and indirect costs (fees or charges you will pay to someone else). These costs vary based on the school and how some items are calculated. Be sure you understand what is included in the cost of attendance figure and whether it accurately reflects your situation so you can compare the bottom line from multiple schools.
Work-study is dependent on you.
If you have been offered work-study, you may still need to look and apply for suitable positions. Start by contacting the financial aid office and expressing your interest in pursuing the work-study funds you have been offered. Once you land a work-study position, the money you earn will depend on the number of hours you work. This money may also be paid directly to you, so you will need to apply earnings to your college expenses.
Know how outside scholarships are applied.
Scholarships from sources other than the government or college can be considered earnings and offset some financial aid you have been offered, because colleges expect you to use scholarships to reduce your cost of attendance. If you need loans, scholarships can help you borrow less.
Consider what will happen in the next few years.
Costs for tuition, housing and meals may go up each year you attend school. But, often students receive the largest portion of their gift aid, like grants and scholarships, in their first year, and many of those awards may not be renewable for future years. Make sure you understand how to continue receiving any renewable awards, and make an effort to replace any nonrenewable awards with additional scholarships after your freshman year. Plan out how you will address these changes after your freshman year, while keeping your total debt to a level you can manage with your after-college salary.