Review financial aid awards carefully |
Jill Haley
Special to The Union

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Review financial aid awards carefully

Photo for The Union John Hart

College acceptances, and rejections, are being revealed this month and so are the financial aid award offers. If you filed the FAFSA, you already received notification of what you can expect to pay for your child to attend college. This amount is called the Expected Family Contribution (EFC) and was based on income from the previous year.

The financial award letter lets your family know how much aid they will be offered to help pay college costs beyond the EFC. This award usually consists of a mixture of grants, scholarships, work-study and loans. It is important to understand the different components before accepting all or parts of the financial aid offer.

Grants, and scholarships are considered "gift aid" and do not need to be repaid. This is the best kind of aid and may be financially need-based or merit based. Merit based aid is granted for exceptional talent or academic performance. This free money may change year-to-year depending on family income and college financial aid office determinations.

Work-study is an offer of employment to the student, usually a job on campus. Students most often use this money to pay for personal items, books and travel. The good news is that any money earned on work-study will not be calculated in the FAFSA as student income.

Loans are usually included in the award letter. This money has to be repaid. There are different kinds of loans and it is important to know the differences. The best loans are subsidized loans. The federal government issues these loans to the student and the interest on the loan is deferred until after the student graduates.

Parents can also take out loans to help pay for the cost of college. With good credit, parents may qualify for the Federal Parent Plus Loan, which has the lowest interest rate, and reasonable re-payment plans.

Private loans to students and parents should be the last option as they will have higher interest rates and interest will begin accruing immediately.

Many students in Nevada County receive local scholarships from their school districts in late May or June. Federal regulations require students to notify the college of any "outside scholarships" which then may reduce their financial aid offer.

The good news is that a college will often use the outside scholarship to reduce loans and leave the gift aid intact. Each college is different and families should contact the financial aid office at the college they will be attending to see what their policy is.

Financial aid awards vary from college to college and will contain different types of aid. Students and parents can accept all or part of a financial aid package. It is important to examine the financial aid award letter carefully and choose the best offer for your family.

Jill Haley is a retired high school counselor, who now works as an independent college counselor. She can be reached at or