Helping Students Understand Their College Financial Offer

Students are receiving their college acceptance letters, and may have difficulty understanding what’s in the offer. You might be helping students decipher their letters, and figure out what sorts of financial assistance they have received. The following gives you a quick way to break down the acceptance letter.

All offers have five specific financial elements; grants, scholarships, work study, subsidized and unsubsidized loans, and private funding. Much of the goal is to determine which of these elements provides the best opportunity.

1) Grants

Grants offer free or partial tuition based on financial need. Sometimes a student is required to pay back part or all of a grant if they withdraw from classes within a semester. Grants are available from the federal government, state governments, the university or college, and/or nonprofits. Make sure your students apply and meet any grant application deadlines.

2) Scholarships

Scholarships also offer free money, this time based on academic performance or skills. If a student applies for a scholarship when they apply for the college, then the letter will detail whether or not they received their scholarship. Students can also apply for scholarships after acceptance.

3) Work Study

Approximately 3,400 higher education institutions across the United States offer work study programs. These let students who are in financial need work through school, and earn their tuition. The federal government underwrites these programs. Your students may be eligible for work study through the school’s financial aid office.

4) College Loans

These come in two categories, subsidized and unsubsidized. With a subsidized loan, the federal government pays the interest during and for the first six months after school. These are available to students with financial need.

Unsubsidized loans are more conventional than subsidized loans and are available to anyone. Students have to pay for the interest throughout their school years, but can defer or engage in forbearance periods.

Dig deep into the details with your students. The Obama Administration has made many changes to the conditions of loans to make it easier for students. For example, your students may not have to pay more than 10% of their salary. Also, after 20 years if the loan is not paid off, it might be forgiven.

5) Private Funding

In the modern age of high cost post-secondary school education, some students have turned to private institutions and other bodies to secure funding.  However, these sources tend not to have the forgiveness terms that other financial aid types have. Many consider private funding to be the last option, but each student is different in his or her financial conditions and resources.

How have you helps students understand their financial aid options? Comment below.