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

Written by
Kristi Rocheleau

Date
March 24, 2021

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It’s officially spring. With the warmer weather, for families with a high school senior, there’s another transition ahead: Students are considering their options and making decisions about what’s next after high school. This could include enrolling in a training program, taking a gap year, heading directly into the workforce, or going to college. And for students (and parents) in the “undecided” zone—now’s a good time to explore your options, with Vermont Applies, the spring admissions event just for the undecided!

High school seniors who chose the college route may be anxiously awaiting an acceptance offer or may have already received one. Students typically apply to between 2 and 7 schools. You’ll want to compare all your offers before making a decision. Because many colleges expect a deposit for the coming school year by May 1, this time of year includes some tough thinking. (Trust us, we’ve been there.)

So, pause, take a deep breath, and read on. We have some practical tips, and we explain the lingo 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.

First things first. The financial aid offers you’ll be receiving from each school can vary widely. Some may send you an official letter (not to be confused with the admissions acceptance letter). More often, you’ll receive an email with instructions for how to login to view the financial aid package through the school’s online portal. Regardless of how it’s sent, this financial aid offer details the money that the school can provide to the student based on the student’s FAFSA and other financial aid applications required by that school. Note: These offers are a one-year snapshot of aid that the student will receive. You’ll need to complete financial aid applications for each year that you are in school.

The vocabulary used on the financial aid offer may differ at each school. In fact, even what schools call their financial aid proposal can go by various names. Some call them “awards” and others refer to them as “offers” or “packages.” The thing to know is that each one outlines what that school is offering you in the way of aid. Some of that aid may be free, as in “gift aid” from grants or scholarships. Other aid requires you to pay it back, in the form of a loan. Our goal is to help you understand these differences as you compare your choices. Check our list of words to look for, contact each school’s financial aid office if you have any questions along the way, or call us at VSAC. We can help you navigate the process.

Wondering where to start? Consider these questions as you look at each offer.

  1. What is the full cost to attend 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?
  4. Does my offer include federal work study?
  5. Is the money offered for only one year, or for multiple years?

Tip: Track the offer details for each school as you review. You can use a simple paper/pen approach or use a spreadsheet tool.

Total cost of attendance. A financial aid package will include the total cost of attendance. This includes tuition and fees, room and board, 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 are not listed in your offer, search for the costs online or call the financial aid office at the college to ask for those figures.

Identify any grant and scholarship money. This is important! Grants and scholarships are free money that doesn’t have to be repaid. The money 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 on 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. Vermont residents should visit vsac.org to apply or check an existing application. 

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. Depending on the school, these funds can be looked at as way to reduce your cost to attend, to reduce the amount of loans you need to borrow, or in some cases they may reduce the college’s grant assistance to you.   

Identify the loans. Almost every financial aid offer will include loans. Since a loan is money that must be repaid, it’s important to question any language that is not 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.

Students will be eligible to receive federal Direct student loans. There are two types: subsidized and unsubsidized. (Yup, more jargon.) Simply put, 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 are relieved to hear that students are not required to make payments on these loans while in school at least half time.

VSAC recommends that you accept these two types of federal Direct loans if you need to borrow.

Another type of loan that may be listed is a federal Direct PLUS loan. This is different than the subsidized and unsubsidized federal Direct loans for students. These are loans 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: Parents, it’s your choice whether or not to borrow some or all of the amount offered.

You may be offered other loans, such as institutional loans from the college. We recommend reading VSAC’s My Education Loans guide to learn more about federal and nonfederal loans, how interest accrues, and how to compare your options.

Offered work study? The FAFSA application includes a checkbox to ask if the student would like to be considered for work study. If the student is eligible, this is money that can be earned by working at a campus job. It does require the student to apply for a job. Not sure if this is for you? Watch this 1-minute video.

What’s next? Get all the information you need to make a decision.

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.