Money

You’re In, Now What? Understanding Your Financial Aid Award Letter

Comments Off on You’re In, Now What? Understanding Your Financial Aid Award Letter 16 March 2016

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You’ve done the work to search for your dream colleges, you’ve filled out your applications and FAFSA and months later you’ve arrived at the moment you’ve been waiting for–you’ve been accepted! While a lot of the hard work is now behind you, the life-changing decision about which school you’ll attend is still ahead and for many students, finances will be a determining factor in where they attend.

In order to help students get a clear financial picture, each school you are accepted to should send you a financial aid award letter. In this letter, the college has carefully calculated the amount of aid they’ll award you based on the school’s cost of attendance (COA) and your financial need based on your FAFSA.  Each school’s letter may be formatted differently, but in addition to your financial aid award, you’ll also get information on how much a full academic year will cost, how much your family is expected to contribute, and how much you’ll have to make up via loans, outside scholarships or other sources.

It’s incredibly important to understand all aspects of your award letter, as this will impact things like if you’ll have to take out student loans and for how much.  The COA section, for example, will list what is comprised of the total cost of attendance of a certain school.  This usually will include tuition, room and board, books and supplies, and other fees, but pay close attention as some schools will only include tuition in this section, and leave you to cover what can be costly other aspects of attending.

In the section of your letter that outlines your financial aid, you may encounter a few different aid types:

“Free” Money

This is money that you don’t need to pay back.  This can come in the form of grants, merit awards, and scholarships from the school.

Loans

In your award letter, you may see a portion is comprised of federal student loans.   You are responsible for paying these back regardless of whether you complete your degree, and can have varying interest rates; it’s very important you understand the full conditions of your loans.

Work-Study Options

Work-study is money you’ll earn from working a part-time job at the college.  This can be an on-campus or off-campus job, and the money can go toward your living expenses.

 

Once you’ve taken a look at the types of aid the school is offering, figuring out if you’ll have a gap in funding is crucial.  This means the school’s aid package doesn’t meet 100% of your demonstrated need as determined by your FAFSA.  To figure out if you have a gap in your aid from a particular school, subtract the cost of attendance from your financial aid award.  Any money leftover represents your gap and you will have to use outside scholarships, find a part-time job or take out private loans to pay the rest.

 

Your financial aid award is just one factor in the big decision that is where you’ll attend college.  Do your research and make the most informed decision possible that will get you to the college or university that is the best match and fit for you.

 

 

 

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