While college acceptance letters are often exciting, the arrival of financial aid award packages can be confusing. Keep these five things in mind as you review your financial aid awards to limit stress.
1. Financial aid is not all free money. Depending on the college or university, financial aid may be presented under one large heading or broken down by type. Remember that work-study and loans, including federal and supplemental loans, are also part of financial aid packages. Work-study requires you to find and obtain work on campus, and loans must be paid back with interest after you graduate or leave college.
2. Cost of attendance varies by college. Like the types of aid offered, college costs may be grouped together under one category or split into different groupings, such as tuition; room and board, which is sometimes called housing and meals; and miscellaneous expenses. This can be tricky when comparing costs between schools. Be sure you understand what is included in each category to get a true comparison.
3. Expenses may increase and free aid may decrease after your freshman year. College tuition, on-campus housing and meal plans will likely cost more each year you’re in school. Grants and scholarships you’re offered to attend a college as a freshman, on the other hand, may decrease in future years. Find out if scholarships and grants are for one year or if they are renewable. If they can be renewed each year, be sure you understand any requirements you must meet to keep those awards. Also, be aware that federal loan amounts may increase every year you’re in college, but those funds will need to be paid back with interest in the future. Estimate total college costs using your financial aid package.
4. Work-study requires work now. If your award package includes a line for work-study, don’t assume the college will have a job waiting for you when you arrive on campus in the fall. As soon as you decide on a college, touch base with the financial aid office to determine what steps you need to take to get a job on campus. Then, apply for the job(s) you are interested in or seek out other opportunities to count on that money coming in once you start classes.
5. Outside scholarships may impact your award package. You need to report any scholarships or grants you receive from sources outside of the government or college to the financial aid office. While those outside scholarships may reduce the aid you’re eligible to receive, they can also help you borrow less if you need loans, so don’t be afraid of finding as much outside free money as possible.