Receiving your financial aid letter is a huge milestone in your college journey, but it can also be overwhelming. Understanding what’s actually free money and what you’ll need to pay back is key to making the right decisions for your future. Here’s your financial aid breakdown:
Free Money: Grants and Scholarships
Grants and scholarships are the best parts of your financial aid package because they don’t require repayment. Grants are often based on financial need, while scholarships can be awarded for academic achievement, athletic ability, or other criteria. These are the “free money” you want to focus on. Be sure to check if any scholarships are renewable, meaning they can continue each year as long as you meet certain criteria.
What You Have to Pay Back: Loans
Loans are the money you borrow to help pay for school, but remember: this is money you’ll have to repay, with interest. There are federal student loans, which often come with lower interest rates and better terms, and private loans, which can vary in cost. Always be aware of how much you’re borrowing and how it will affect you after graduation.
Work-Study
Work-study is a great way to earn money while in school, but it’s not free money. These are part-time jobs that you can use to cover some of your living expenses or other costs, but remember that you’ll have to work for this money. Still, it’s a good opportunity to gain experience and earn money without taking on more debt.
Additional Costs
Sometimes, your financial aid letter might not include all the expenses you’ll need to pay for, such as textbooks, transportation, or special fees. Make sure to account for these extra costs when evaluating your aid package.
Understanding the differences between grants, loans, and work-study will help you make an informed decision about which offer is best for you. Don’t be afraid to ask questions if you’re unsure about any part of your financial aid letter—knowing what’s free and what’s not will set you up for success in the future!
More about Jodi and College Financial Aid Advisors
Jodi is a FAFSA financial advisor who helps with the financial aid process to help families of college students maximize their financial aid. From completing the FAFSA and completing the CSS Profile to reviewing the SAR, responding to requests for verification, comparing financial aid offers and understanding student loan options, Jodi is a fantastic resource when it comes to student financial aid. Schedule a 15 Minute Power Chat to learn more about finding ways to pay for college.