Each year, colleges and universities are provided with funds from the federal government to award grants, loans, and scholarships. Each university is also provided with information submitted by applicants in the Free Application for Federal Student Aid (FAFSA). The data is used to determine individual financial package for each admitted student. Students are then sent a financial aid award letter with the details of scholarships, grants, loans, and work-study available to them. What many students don’t know is that they can accept, deny, or modify all or part of the award.
Accepting a Financial Award
If you received a financial aid award letter from your college or university, you probably know that they are notoriously hard to figure out. The most important thing to remember when reviewing your financial award letter is that it’s not an all-or-nothing package. You don’t have to accept all of the grants, loans, or other awards offered to you.
Which Financial Aid Should I Accept?
The acronym FEB—Free, Earned, and Borrowed—will help you remember which financial aid awards to accept first. It’s always ideal to receive aid in the form of scholarships and grants, and you should accept these awards regardless of your financial situation, because it’s free money that you don’t have to pay back.
After free money, the next best option is earned money in the form of work-study programs. In these programs, you work a set amount of hours per week on campus. While work-study awards do not have to be paid back, they do take away from study and free time, so ensure you can balance any work-study obligations with your course load before accepting an award.
Federal student loans are the next best option if you have to borrow money. Federal loans come with a variety of benefits including loan forgiveness, income-driven repayment plans, and other options to manage your loan in the event of hardship, including deferment or forbearance.
Besides federal student loans, a college or university may offer additional loans through state-funded programs or an institutional loan program. It’s important to remember that state and college loans are not regulated by the federal government, and you will not receive those benefits. It’s best to read the terms clearly to ensure that you understand repayment options, interest and how it capitalizes or may increase over time.
Finally, in some cases, you may discover that the award you receive is lower than you expected and you do not qualify for additional federal aid. Many families feel that their Expected Family Contribution (EFC) is typically more than they can afford. If this is the case, you may seek out a private student loan. As with loans from your state or university, it’s essential to research the terms of the loan, interest, repayment options, and hardship support before accepting it.
How Do I Accept a Financial Award?
Each school manages award acceptance differently. Your college or university will send either an electronic or paper form asking you to note which award options you accept. It will also include instructions for challenging the award amount.
After completing and accepting the awards, your college will instruct you to complete a Master Promissory Note via StudentLoans.gov. The Master Promissory Note is the final and most essential part of accepting a financial aid award as you are officially accepting responsibility for the loan and agreeing to award terms.
A Final Word About Financial Aid AwardsWhen you receive your financial award letter, remember that no financial aid award is set in stone. You will be able to accept, deny, or appeal the financial aid award depending on your needs. If you have any questions about your award, you can contact your institution’s financial aid office or sign up to receive personalized guidance from Edmit.