A lot of students don’t think about their financial aid except for the time of year when tuition is due. But your financial aid eligibility and packaging are necessary to completely understand thoroughly.
Financial Aid includes grants, scholarships, loans, work study, or payments given by your employer to help with a student’s college or university expenses. Grants, such as the Pell Grant, are gift aid that are awarded based on need and do not need to be repaid. Typically graduate students are not eligible for grants. Scholarships are awarded based on different factors, but also do not need to be repaid. The criteria used to determine how to receive a scholarship is determined by the organization disbursing the scholarship. Work study can be federally or state-funded opportunities for students to work at the college or university to help off-set their cost of attendance. Loans have to be paid back. They can be private, from an individual bank, or federally or state-funded. Financial Aid offices do not advise students on private loans as they cannot speak on the behalf of banks, but if you have reached the maximum amount you can borrow then they may suggest going to your bank and asking about an educational loan.
Employers can pay for a student’s education in one of two ways. If the student provides the right documentation to their company, as required by the student’s supervisor or Human Resources Department, and they pay the school by the beginning of the term. Or the will do a tuition reimbursement, which is when you have to pay for the semester (by whatever means possible) and upon completing the semester you have to provide proof to the employer that you received the necessary grade point average in order for them to pay you back for your expenses.
FAFSA, or the Free Application for Federal Student Aid, is just that- an application. You don’t “have” FAFSA. Many people like to argue “but I have FAFSA!” when they go into the Financial Aid office, but that’s like trying to register for classes by arguing that you have an admissions application and essay, or your SAT scores.
The most important thing to remember about loans is that the lender doesn’t care if you have a job or understood how much money you were borrowing or not- you borrowed those funds, and when it’s time to repay you must. Some people like to argue that their loans shouldn’t be repaid because of the high cost, but many also admit it’s because they didn’t realize when they were in school how much they were borrowing. There is no excuse for not knowing what kind of financial situation you’re getting yourself into.
Pay attention to what’s going on in Congress. Another major issue in the federal student aid program is the interest rate for different loans, making it difficult for students to pay back their loans. Being aware of what’s going on related to your aid or repayment will help you in the long run.
Some people get refunds and consider it their own money. Well, yes, in a way it is, but it’s not free money. It’s part of your loan. That money is supposed to be used for educational expenses, including rent. Some people use this money to buy expensive items and travel. If you don’t need it then return it to the lender. When your loans are in repayment you’ll be happier knowing your bill isn’t as high because you returned what you could!
Before you get frustrated with your Bursar’s or Financial Aid office, take the time to sit down with your counselor. Ask questions. Check how much money you have borrowed. If your parents cosigned then make sure to discuss with them any concerns you have.
Financial Aid doesn’t have to be a scary topic. Empower yourself by educating yourself and receiving financial aid will be a lot less confusing.