Figuring out your financial aid package is often not a thrilling pre-college activity. While actual financial aid award letters may appear to be simple, it’s not always easy to figure out exactly what needs to be paid by you or your family, and when. Here, I’ll break down the typical elements of aid packages, and show how and when the costs impact you and your family.
1. Expected Family Contribution. Often times, a financial aid award letter begins with information about the overall cost to attend that school, and how much that school has determined that your family (or both you and your family) can pay. You’ll be given a total amount expected to be contributed by you and your family. Any money expected to be paid by you and your family is needed by the time of your first tuition payment (around the time when you start school); however, many schools allow you to pay in monthly installments (which involve an extra fee). If your school lists you separately from your family, your contribution will be expected to come from a summer job between your last year of high school and your first semester and/or from any savings or trust fund listed in your application. International students are usually not expected to work in the summer before attending college.
2. Your Financial Aid Award. Next will be information about your actual financial aid award, which will be based on that family contribution mentioned above. So, if your school has determined that your family can’t pay $27,000 of your tuition, room and board, and fees, your aid will cover that amount of need. In this section, a school may list some sources of funds that are not required to be paid back. These include scholarships and grants. Hopefully you’ll have a few of those!
3. Loans & Work Study. The rest of your aid award letter will be self-help. Here, you’ll see loans and possibly work study. You’re required to pay back loans, and the exact amount of repayment is determined by how much money you borrowed, the interest on the loan, and the repayment plan you choose. You’ll be expected to start paying most of them back after you’ve graduated and started working, although if you drop below half-time enrollment or leave school, you’ll be expected to pay them back then. Finally, work study may be offered to you to help cover your personal expenses during the school year. I didn’t understand this initially when I was in college, but you’re not required to pay this money to your school. You’ll simply have to get a part time job (usually one on campus) that participates in a federal work study program, and the government will help pay part of your salary.
There are so many different combinations of financial aid awards, so these aren’t always hard-and-fast rules. But if you keep these general guidelines in mind, you’ll be much better able to plan your finances in college, and beyond!
Dakotah Eddy is a Veritas Prep Head Consultant, and the Assistant Director of Admissions Consulting. She received both her bachelor’s degree and MBA from Cornell University (Go Big Red!), with the aid of several scholarships, grants, fellowships. She enjoys creating: from culinary masterpieces, to wearable art, to tech solutions.