Financial Aid: What to expect and how to interpret your offers

With warmer weather a few weeks away, high school seniors have another transition on their mind: considering what's after graduation. Even if you're undecided, this is a good time to explore the options for your future. Are you looking for a career training program, taking a gap year, entering the workforce, or heading to college?  Always remember that life after high school offers options. And if you're planning to continue your education, interpreting your financial aid offers can make a big difference in your next steps.

High school seniors planning to attend college are always anxiously waiting for an acceptance offer, and some may have already received one. The next question is: Which offer do I choose? Before making any college decision, compare all of your financial aid offers. Although many colleges expect a deposit by May 1, this time of year includes some tough thinking.

So, pause, take a deep breath, and use these tips to help you examine and compare the offers you receive.

Financial aid offers are a one-year snapshot of aid that the student will receive.

Each financial aid offer will be unique. But each offer details the money that the school can provide you based on your FAFSA and other financial aid applications.

First, learn the lingo. Some schools call student aid “awards” while others refer to them as “offers” or “packages.” But always know that each line represents what that school is offering you in the way of aid. Some aid, like grants and scholarships, may be free, “gift aid”. Other aid, like student loans, requires you to pay it back.

If you're unsure about words, use an online financial aid vocabulary glossary to better understand what you're reading.  If you're ever unsure about the words or figures on your offer, contact each school’s financial aid office. You can also contact VSAC, and we'll help you navigate your decision process.

Wondering where to start with your offer? Consider these questions:

1. What's the full cost of attending this school?
2. Does my offer include grant and scholarship money?
3. Does my offer include loans that will need to be paid back? And what types of loans?
4. Does my offer include federal work-study?
5. Is the money offered for only one year, or for multiple years?

Tip: Paperwork can get confusing. Track the offer details for each school using our Financial Aid Offer Comparison Tool.

Remember that you’ll need to complete financial aid applications annually for each year that you're enrolled.

What's the total cost of education? 

Calculate the total cost of attendance. Financial aid packages will include the total cost of attendance, including:

• tuition and fees
• housing and meals
• transportation
• books, and
• personal items for the full academic year. 

You may need to add up different sections to get a complete picture, or the total cost may be clearly outlined. If supporting costs and fees aren't listed in your offer, search for the costs online or call the financial aid office to get exact numbers.

Free aid thanks to grants and scholarships

Identify any grant and scholarship aid on your offers. Grants and scholarships don’t have to be repaid. Both forms of student aid can be based on financial need or merit (academic or interests), and typically comes from three sources:

• federal
• state, and
• institutional (college) money.

Make sure your offer includes any state grant funds that you may be eligible for. Some colleges may not include state grants in their financial aid offer because the school is unaware that you applied for those funds. And some colleges may include an estimate, even if you haven’t yet applied for state grants. If you don’t see a state grant, or if you see an estimate, verify that you’ve completed the necessary applications by visiting your state agency site. Residents of Vermont should visit vsac.org/grants to apply or check an existing application. 

Student loans can fill the gap

Were you awarded scholarship money from non-college sources, such as local and private organizations? Contact your school’s financial aid office for specific information on how your school treats scholarships. Some schools may reduce the amount of loans you need to borrow, while others may reduce the amount of grant assistance.   

Identify all loans on your offer. Almost every financial aid offer will include loans. Since a loan is money that must be repaid, question any language that isn't followed by the word “grant.” It’s not uncommon for a family to think that the college is covering the full cost to attend, only to learn later that a large portion of the financial aid offer is covered by loans. Be cautious.

federal Direct student loans

Students will be eligible to receive federal Direct student loans. There are two types: subsidized and unsubsidized. A subsidized loan is offered to students with greater financial need, and the federal government covers the interest that accrues while the student is in school. An unsubsidized loan is available for all students regardless of financial need, and interest starts accruing once the funds are disbursed to the school. Most families aren't required to make payments on these loans while in school at least half time. VSAC recommends that you accept those two types of federal Direct loans first if you need to borrow.

federal Direct PLUS loan

Another type of loan that may be listed is a federal Direct PLUS loan. These loans are different than the subsidized and unsubsidized federal Direct loans for students. PLUS loans are taken out in a parent's name, or another adult who is helping to pay for college. Graduate students are also eligible for PLUS loans. The amount of the loan may be for the cost of attendance minus student financial aid.

Tip for parents: It’s your choice whether or not to borrow some or all of the loan amount offered. You may also be offered other loans, such as institutional loans from the college. Compare all loans and education financing options—including those not noted on your offer—before agreeing to any loan. You can accept all free aid first, then wait to decide about which loans and how much you want to borrow.

Need guidance on student loans? VSAC’s My Education Loans guide will help you learn:

• more about federal and nonfederal loan
• how interest accrues
• how to minimize your loan costs, and
• how much you'll need to repay.

work-study

The FAFSA application includes a checkbox to see if you're interested in work study. If you're eligible, your financial aid offer will show you how much you're aid you'll receive if you're open to working at a campus job. The job isn't guaranteed though. You'll need to apply for a job.

Watch this 1-minute video on Financial Aid & Managing College Costs: Work Study

What’s next when you're interpreting your offering?

• Get all the information you need to make a decision.
• Reach out to each college with any outstanding questions.
• Read how to appeal your financial aid offer if your financial circumstances have changed since you filed your FAFSA.
• Calculate the total cost for any school you are considering.  

In the end, you’ll want to choose the school that fits your needs. Using online tools, asking questions, and learning what you need to know about loans—before you sign on the dotted line—will help you make the choice that’s best for you and your family.

VSAC is here to help guide you, whatever your education goals. For more on financial aid and planning for college or training expenses, go to vsac.org, email us at info@vsac.org, or give us a call at 833-802-8722 (833-802-VSAC).