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Understanding Financial Aid (part 3 of 3)

Understanding Your Financial Aid Package

If you are accepted to a college either through Early Decision/Action or Regular Decision, the college will send you a financial aid package for you to review before you have to decide whether or not to attend. Financial aid packages have many components, and it is important to fully understand all of the costs of a college as well as the aid awarded to cover the costs.

Costs of Attending a College
The cost of attending a college is more than just the tuition that you pay. Below are the components that make up the total cost of attendance. It is important to note the when you get financial aid, it is toward all of the components below.

  • Tuition: The cost of taking classes full time.
  • Room & Board: the cost of living on campus and eating campus-provided meals.
  • Books & Supplies: the estimated cost of the textbooks and school supplies you will need to take your classes.
  • Personal Expenses: the cost of necessary items like shampoo and toothpaste that are not provided by the school.
  • Transportation: the estimated cost of you getting to college, getting home at the end of college, and also going home during winter break. This varies depending on how far your family lives from your college.
When your financial aid is calculated, all of these expenses are considered. As a low-income student, you can get financial aid for your personal expenses and also for travel. Since you can get financial aid to travel, you don’t need to worry about not being able to afford to get to a school far from home if that is where you want to go.

Components of a Financial Aid Package
Below are common components of a financial aid package and who actually pays for them.

  • Grants: awards you don’t need to pay back and are provided by the federal/state government and/or your college.
  • Student Summer Contribution: This is a component of the EFC. It is money the student is expected to pay from summer earnings. The amount generally ranges from $1,000 – $2,000 and can be covered by summer work-study at some schools.
  • Student Loan: A loan taken out under the student’s name that the student will need to start paying back following graduation. These are usually federal loans.
  • Parent Contribution: This a component of the EFC and is money that the parents are responsible for paying to the school. Some parents can’t pay the amount up front, but they can take out federal loans (such as PLUS loans) or private loans (such as loans from their bank) to cover the cost.
  • Work-study: This is an amount of money you are eligible to earn during the school year through an on-campus job. While you are working in your work-study job, you get bi-weekly or monthly paychecks up to the amount you are eligible to earn.

In some cases, your financial aid plus the EFC doesn’t add up to the full cost of attendance, and that is unmet need (as described above). If you have unmet need and still decide to attend that school, you can cover it in several different ways. You the student, or your parents, can take out private loans, like loans from banks. Your parents can also take out a federal PLUS loan.

One cheaper option is that you can apply for outside scholarships, like the Coca-Cola scholarship or a local scholarship, like one from your local Masonic Lodge or Rotary Club. If you get outside scholarships, many schools will allow you to use these awards to reduce the amount you have to pay. Some schools, however, use your outside scholarships to first reduce their grants to you, making no difference in how much you have to pay and only saving themselves money. Be sure to check the school policy on outside scholarships. At many schools, even if you don’t have unmet need, you can use outside scholarships to cover the parent contribution, your summer contribution, or even eliminate your loans and work-study.

You can find out more about outside scholarships and how to apply by looking on scholarship search engines, like Fastweb.com or Scholarships.com as well as going to your guidance counselor to ask about smaller local scholarships that you might be eligible for.

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