FAFSA, Financial Aid, and Evaluating Award Letters

Article Author: 
Gerardo Ochoa, Associate Financial Aid Director, Linfield College, Portland Campus, OR

Students, January 1st is the first day to file your 2013-14 FAFSA.  Remember to file early.  Comment, ask questions by creating an account on Edudaris, and joining the FAFSA 2013-14 Help & Support group for ongoing discussion and questions with Gerardo Ochoa, Associate Financial Aid Director, Linfield College, Portland Campus, OR.

Spring is an exciting time for you high school seniors as you prepare for graduation, select a college to attend, but don’t forget about a very important letter your colleges will send you, the financial aid award letter.

Financial aid letters are composed in many formats; this makes it difficult for students and families to compare one to another because they all look different. Although they differ, the types of aid in the letters are very similar, they will all include at least one of the following: grants, loans, work study, or scholarships.

Each college has the responsibility to offer the maximum amount of financial aid you are eligible to receive at their institution, it is your and your parents’ responsibility to evaluate the financial aid award and make an informed decision on which types of aid you choose to accept. Remember, just because they offer it does not mean you have to accept it.

Because there are different types of aid; some of which is free to you and some of which you have to repay, it is important to keep in mind when you are comparing letters that you also compare the cost of the college as well as the cost to you. If one school is giving you mostly loans, that is a cost that you will eventually have to repay. Here are a few things to keep in mind as you are evaluating your financial aid letters. If you have questions or concerns, contact the office of financial aid to get the answers you need and on www.fafsa.gov.

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Grants

These generally fall under what’s considered and entitlement, meaning if you qualify by having financial need as determined by your FAFSA, you are entitled to have the grant. Examples of grants are Pell, FSEOG (Federal Supplemental Education Opportunity Grant), ACG (Academic Competitive Grant). Generally peaking, grants are free money that does not have to be repaid.

Scholarships

Some colleges have private scholarships to offer, they are often based on need and/or your own merit. Scholarships are also free money that does not have to be repaid, but some scholarships have requirements associated with accepting them. For example, some scholarships require you to maintain a certain GPA and or a community service requirement. Make sure you know the requirements associated with each scholarship you are offered and are willing to satisfy the requirements. You are also required to inform the financial aid office of any scholarships you win on your own.

Loans

All loans have to be repaid. There are many different types of loans; the most common federal loans are the Perkins, Subsidized & Unsubsidized Stafford Loans, and Parent PLUS Loans. Since they all have to be repaid, they all have various interest rates. Interest rates vary depending on the loan. Perkins and Subsidized loans for example are not accruing interest while you are enrolled at least halftime in college. Unsubsidized and Parent PLUS loans however, accrue interest the moment the funds are disbursed. Repayment does not begin until at least 6 months after you are no longer enrolled in college at least half time.