Find out what comes in your financial aid package, and what to do with it.
As you pursue college aid to help pay your tuition, you’ll hear the term financial aid package, but you may not know exactly what this package entails or what to do with the amount of college money you are offered.
Your financial aid package is the amount of federal aid, state aid and college aid that the colleges and universities who’ve accepted you are willing to offer you toward your college degree. When you’re accepted at a school, you’ll receive an acceptance letter as well as a financial aid award letter that lists the amount of aid you’re being offered toward the first year of your college education.
Once you’ve decided which school you want to attend, accept their offer of admission and let them know which aid you’re going to accept
What’s Included in a Financial Aid Package?
The financial aid package awarded by a college or university will be explained in the award letter you receive from the school. In your award letter, you will see all the federal grants, college scholarships, college loans and work-study programs that school is willing to offer you. This aid will come from a variety of sources, including federal aid, state aid and college aid.
In your financial aid package, you will see two types of aid: need-based aid and merit aid. Need-based aid is awarded based on your financial need, as determined by the information you included in your FAFSA form and the cost of attendance at that school. Merit aid is sometimes awarded without regard for your financial needs. Merit aid is usually awarded for academic achievements, but can also be awarded for special talents, such as athletic or arts-related skills.
Each school has its own format for listing out college aid. Some will give all college costs, while others will cover only billable costs, such as tuition and room and board. If you’re not sure what costs are being covered, ask your guidance counselor or parents for assistance.
What Do You Do When You Receive Your Financial Aid Package?
Review each award letter to see how much college money you’ve been offered and what types of money it is. Remember that you may be in a better position if you accept less money but a larger proportion of federal grants and college scholarships than if you accept more money in the form of student loans, since loans need to be paid back with interest. Remember that private loans usually have a higher interest rate and it is important to compare student loans to get the best terms and conditions.
As you evaluate your financial aid packages, keep in mind that you are not required to accept all the aid you’re being offered. You will want to accept all grants and scholarships, since these don’t need to be repaid, but you can reject a college loan or request a college loan for a lesser amount to make that loan easier to pay back.
Once you’ve decided which school you want to attend, accept their offer of admission and let them know which aid you’re going to accept. In some cases, you’ll be asked to submit a promissory note, in writing, to accept a certain type of aid.
Financial Aid Package Tips & Tactics
- Once you’ve decided which school you want to attend, notify any other colleges that have accepted you that you’re declining their offer of aid. That way, the financial aid you were allotted can be given to other students.
- After you accept the school’s offer of aid, contact the financial aid office or college admissions office to find out how and when the college money will be disbursed, how much aid will be applied directly to your bill, and how much your first bill will be.
- Create a budget to get you through your first semester of college. If you’ve accepted college loans as part of your financial aid package, keep in mind that these loans will need to be repaid, so be mindful of that future expense when you’re planning your budget.
- You may not receive the same amount of aid for each year of your college degree, so find out what you can expect to receive in subsequent years so you can adjust your budget accordingly.