Going to college is a major financial commitment. Luckily, financial aid can help you cover the cost of getting your degree. Read on for tips on how to read your financial aid award letter so that you can make the best decision for your financial and educational future.
How your award is determined
When you fill out your Free Application for Federal Student Aid, or FAFSA, you will be expected to submit important information about your family’s income and assets. From this information, you will get a Student Aid Report, otherwise known as a SAR. Your SAR will list your Expected Family Contribution, or EFC. To determine how much aid you and your family need, your school deducts your EFC from the cost of tuition. Your college’s financial aid administrators can then award or “package” financial aid based on the amount of aid needed.
Understanding your award letter
Financial aid award or “package” letters can be difficult to interpret. But it’s important to fully understand what your award will mean for your finances and your future. Here are some of the common sources of financial support that you should be familiar with when reading your financial aid award letter from your college or university:
- Grant = Money that you don’t have to repay
- Loan = Money that you must repay
- Scholarship = Money that you don’t have to repay
- Work-study = Money that you earn from working either on campus or at an approved organization or company
Many financial aid packages feature a combination of the above sources. You should read the letter carefully and decide what kind of aid makes sense to you. You do not have to accept all of the aid offered. But do be sure to pay close attention to all of the terms and conditions of the different options that are offered to you.
You should also determine what conditions apply to scholarships and grants. You may have to maintain a certain course load or GPA. Also, keep in mind that unless otherwise stated, the letter only applies to the upcoming school year. (This means that scholarships and grants may only be available for one year.)
Also be sure to follow the deadlines for accepting your aid so you don’t miss the boat.
If you have any trouble with your application, or if you need a more detailed explanation of what aid you are being offered, you can visit the FAFSA website at http://www.fafsa.ed.gov/index.htm or you can call 1-800-4-FED-AID.