Understanding Your FAFSA Financial Aid Award

FAFSA is a crucial component to fill out in order to get any sort of money for college from your university or from the government. We will be posting a “How-To” for filling out the FAFSA soon. Once you’ve filled out the FAFSA, which you must do every year based on the tax returns of the previous year, you’ll receive an award notice from your academic institution.

The award notice can include a bunch of things such as:
Grants (Usually Pell Grants or “State Name” Grants)
Scholarships
Subsidized Loans
Unsubsidized Loans
Cost of Attendance
Work-Study

The Cost of Attendance for your school is how much it costs, all aspects considered, to attend for the semester or year. This includes tuition, room & board, and books (along with other expenses). If you are not living in a dorm i.e. you commute to school or are living in an apartment , then you will get the amount of money that would have gone towards your dorm in the form of a check at the start of the semester. Make sure to use the money for your rent and not other expenses. If your school does NOT have a dorm and dining hall available then this cost may not be listed on the cost of attendance.

Your Estimated Financial Contribution (EFC) is an estimate of how much money the University expects you to contribute towards your education. Again, this is an estimate and only once you receive your official Award Notice should you be confident in the numbers you’ll be expected to pay and receive.

Common grants that you may see listed on your award notice are State Based grants and Federal Pell Grants. Grants are great because you do NOT have to pay them back at any point. They can go directly towards paying for your cost of attendance. These grants often have a maximum number of terms for which you can receive them, so be really mindful of finishing your degree in a timely manner. For instance, Federal Pell Grants can be used for up to 10 semesters. Let’s suppose that your school’s semesters are Fall, Winter, Spring and Summer. If your school has “half-terms” available for spring and summer courses each half term does not equal a full term so you would need to take both spring and summer courses for it to amount to 1 term for Pell Grant purposes. However, any full terms such as Fall and Winter are each counted towards the eligibility as 1 each. You could also see “FSEOG” which is a Federal Supplemental Educational Opportunity Grant.

Scholarships can be awarded either by your school or from an outside source. For example, you could have had a high GPA and test scores and received a merit-based scholarship from your university as an incentive to attend their school. Regardless of whether they are merit or need-based, scholarships do not need to be repaid There are two things to be mindful of when it comes to scholarships.
1.Make sure to check if a scholarship is renewable for all 4 years or 2 years for an associates degree. Sometimes schools will incentivize a student to matriculate by offering a scholarship, but it is only for the first year.
2.Make sure to see if an outside scholarship will affect the aid you receive. For instance, you get a $1,000 scholarship, but you already have no loans in your financial aid package. In such a case, the school will take the $1,000, but you won’t get any more money from it. If you can get a scholarship to send it directly to you instead of to your school that is usually a better route if you have no loans listed on your package.

Work study could be offered as a part of your package. A work study job allows you to work a qualifying job on campus and get paid by the hour and agreed upon wage up to the award amount without it affecting any future aid. For instance, if you get $2,500 in work study for 2 semesters you can make up to that amount from your work without it having any impact on your aid package for the next year. It can sometimes be a challenge to make the amount of your aid package on minimum wage, so I would encourage you to look at different campus jobs and see what might be a better fit for you. Typically, coveted spots like the library (because they pay well and have much less work to do comparatively) are hard to come by unless you have a friend to put in a good word. Dining hall jobs are often available with flexible hours and decent pay, and same thing with any on-campus cafes. If you can work on research or something that also helps you further your career pursuits then that is a great way to earn money and experience. You will need to indicate whether you would like to get work-study funds in your financial aid package when you file your FAFSA.

Subsidized Loans can be labeled in a variety of ways. Most commonly, they’ll appear as most commonly as Federal Direct Subsidized Loans. For subsidized loans like these the government pays the interest on them while you are in school and during a grace period. Make sure you know how long your grace period will be as that can depend on a few factors. Please do the research to see what the interest rates are and start to plan on repayment as soon as you are out of school. Ideally, it would be best to repay as much as possible before the grace period is up and interest starts to kick in. Unfortunately, in 2017 the government got rid of the Federal Perkins Loan program which was well regarded because it had a 9 month grace period, students could pay back their school instead of a loan servicer, and had a relatively low 5% interest rate.

Unsubsidized loans can often also be offered in your aid package. If you can avoid taking out any unsubsidized loans- please do so. Unsubsidized loans are much harder to pay-off in the long-run because of the interest accrued over time. It also accrues interest while you are in school as well.

If you are taking out any loans, you owe it to yourself to make sure that you know what you are getting into and how to pay it back as quickly as possible. Once interest starts to accrue, a “small” amount of loans can take decades to pay back in full. Make sure that you are not taking out loans unless there is no other way to pay for your college expenses, and most importantly do not rely on loans for things like shopping or trips. There are a few governmental ways to get your loans forgiven, but a very very small fraction of people truly qualify and even fewer have historically had their loans forgiven. Simply put, it is not easy or a simple process to get your loans forgiven even if you are in public service.