Financial Aid Awards

Financial Financial Aid Awards
Financial Aid Awards

Financial Aid Awards…to the Letter

Spring’s in the air and that means colleges will soon send out acceptance letters to anxiously awaiting student applicants who have applied for admission. Applicants who completed the FAFSA (and CSS Profile, if applicable) will also receive a Financial Aid Award Letter along with their letter of acceptance.

The Financial Aid Award Letter is not a bill, although it contains all sorts of numbers and dollar amounts. The college will send out a bill only after the student has decided to attend and for the upcoming semester only. A Financial Aid Award Letter helps the student and family devise a budget, based on total Cost of Attendance (COA) for the entire year. The COA includes tuition, fees, housing, meal plan, books and any other education-related expenses, like transportation and computer equipment.

More importantly, a Financial Aid Award Letter provides a breakdown of all the forms of financial aid the student qualifies for, including scholarships, grants, federal loans and work-study. Here’s what to look for in a typical Award Letter:

Merit-based scholarships awarded by the college are based on the student’s academic performance and the strength of the application for admission. The student and family’s financial situation is not taken into consideration. Once enrolled, students are required to earn a minimum GPA to maintain the scholarship throughout their academic career at the institution. Scholarships are free money and do not need to be repaid.

Grants are need-based, so the student and family’s financial situation will determine eligibility and the amount. Grants are awarded by the school, the federal government and select states. The Pell Grant and the Federal Supplemental Educational Opportunity Grant (FSEOG) are examples of federal grants. Like scholarships, grants are free money and do not need to be repaid.

Federal Direct Loans (also known as Stafford Loans) are administered and funded by the federal government. Everyone who completes the FAFSA is considered for a federal direct loan. Portions of the loan may be Subsidized or Unsubsidized. Subsidized loans will not accrue interest while the student is in-school. Unsubsidized loans begin to accrue interest immediately. Federal direct loan amounts are determined by the year of study (freshman, sophomore, junior or senior). Loans need to be repaid and repayment begins after graduation.

Federal Work-Study helps enrolled students earn money throughout the academic year by providing part-time jobs either on or off-campus. Work-Study awards indicate the maximum a student may earn as an employee. Work-Study eligibility is based on need and determined by the FAFSA.