Before you can make an informed decision about whether or not to attend an institution, you need to interpret your financial aid award letter. There is a lot of terminology tossed around in these letters, so you might feel a bit lost in translation. Lucky for you, we broke down all the different financial aid terms to help you understand and compare your awards.
Grants & Scholarships
- Money from scholarships and grants is “free” money that you have been awarded and will not be expected to pay back. This is money used by your institution to reduce the cost of billable items (tuition, room and board, etc.). Make sure that you look into where this money is coming from and why it was awarded. Also, note whether or not it is renewable and if so, how often and by what requirements.
- Some scholarships may appear on your financial aid letter, but some may come in a separate letter from a different part of the intuition. If you applied for any outside scholarships, those will come separately as well.
Work-study
- This is money you have the opportunity to earn by occupying an on or off-campus job while enrolled.
- The dollar amount here represents the top amount that you have the option of earning.
Loans
- This is the maximum amount of money you have been approved to borrow. Just because you are able to accept a loan does not mean you should. Keep your loan debt as low as possible, or even better–avoid it altogether if you can.
- Make sure to read the fine print in the terms of the loan, especially the interest amount and when repayment begins.
- Remember that a loan isn’t reducing your cost of attendance, since you’ll have to pay it back in the future. It’s simply spreading out the cost over a longer period of time.
Common Misunderstandings
“Cost of Attendance”
- Not a bill. This is an estimate of what it would cost to attend the institution during a specific enrollment period. This includes an average of the more individually determined costs, like books and travel.
“Family Contribution”
- We repeat, this is not a bill. This is how much you could look to contribute to the overall cost.
Apples and Oranges
How should you compare your financial aid awards from different schools? You’ll need to calculate your net cost of attendance.
- Start with the provided cost of attendance
- Take out books and personal costs (these vary by person)
- Keep in travel costs (this varies by school)
- Find your net priceby subtracting grants and scholarships
- (Your Cost of Attendance – Grants & Scholarships = Net Price)
The net cost of attendance is what will help you determine if you can afford to attend a specific school, so it’s important you compare net costs of attendance, not the total. Remember, loans and work-study do not change what you are going to pay they just change when you are going to pay it and how.
Fast-forward 365 Days
Earning a degree will probably take more than one year. Sometimes it is hard to think 365 days ahead of time, but it is very important to read renewal components (especially on grants and scholarships). For need-based grants, read the fine print on how renewable these are and consider whether or not your financial situation will be changing
Award Letter
Before you contact your financial aid adviser with any questions, read through the entire award letter to make sure you have a full understanding of the different components. This will enable to you to ask all your questions at once and promote a ‘big picture’ understanding of your financial aid situation.
At South College, one of our financial aid advisers will walk you though every step of the process. Contact us today to set up an appointment.
