February 2020
5 Things to Know When Reviewing Financial Aid Offers
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Receiving financial aid offers is very exciting but can also produce confusion when trying to understand and compare them. Fear not! The following are some tips and things to know that can ease the confusion and help you make an informed financial decision when selecting your school.
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1. They All Look Different
Financial aid offers are like apples and apricots; they are both round fruits but they look different. Some have more information on them than others, such as cost of attendance or terms and conditions. While the names of some types of aid like the Federal Pell Grant and Maine State Grant are usually consistent across all offers, others, like grants or scholarships from the school itself, are not. And, just because one offer has more items on it, doesn’t mean it’s a better offer.
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2. Work-Study Works Differently
Federal Work-Study (FWS) provides funds that are available to students to work on campus (and sometimes off-campus) and earn a paycheck. If you were offered FWS, your allotment of work study money will show up on your financial aid notification. However,
it is not money that will reduce the tuition bill.
With FWS, students work at a job and are issued a paycheck, just like other jobs. Financial aid offers differ in the amount of detail they provide about how FWS “works.” So while FWS earnings are a great ways to cover expenses like laundry, gas and other incidental expenses, they are not available to pay the tuition bill.
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3. Be in the Know about Loans
Most students will see an offer for Federal Direct Loans on each financial aid notification they receive. The amount is determined by filing the FAFSA and is based on the student’s year in school. There are
two types of Federal Direct Loans
, available to students, Direct Subsidized Loans and Direct Unsubsidized Loans. In addition, there
may
be other offers of loans, usually presented as an estimated amount. They have varying names and types such as:
- Private Loan or Student Loan
- Alternative Education Loan
- Parent PLUS Loan
It is important to understand the differences among all types of loans. Loan options should be researched before borrowing and we recommend starting with
TheLoanforME
. Remember, even if loans are offered, they are credit based. Students and families are in the driver’s seat and are never required to borrow unless they choose to do so.
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4. A Financial Aid Offer is NOT a Bill
The financial aid offer will arrive before the bill and is a list of the types of aid a student is eligible to receive. However, to understand the actual cost of the school, the offer needs to be compared to the cost of attendance. If the cost of attendance is not included as part of the offer, check the additional information included with notification or the school’s website. Next, compare the information using a tool like FAME’s
Comparing Costs & Financial Aid Offers
worksheet. This comparison will provide a better estimate of the out of pocket cost for each of the schools the student is considering. It will also will help students and families make a more informed decision and result in fewer surprises when the tuition bill arrives.
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5
. Additional Action is Usually Required
It is important to be on the lookout for additional steps that must be taken to accept and receive the financial aid offer. For example, students must electronically complete a Master Promissory Note and Entrance Counseling before they can receive a Federal Direct Loan. Students planning to use work-study will need to complete federal and state tax information such as the I-9 and W-4 forms and any other work related forms the school requires. Read all the information included in the financial aid offer and any supporting materials provided. Contact the financial aid office with any questions.
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Want more information on Financial Aid Offers?
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Join us for this month's FREE Wednesday Webinar:
Understanding and Comparing Financial Aid Notifications (and Jargon)
Wednesday, February 12, 2020
New Time: 1:00 p.m. – 2:00 p.m.
College and university financial aid notifications are like apples and apricots; in the same category, but they all look different. In this webinar, you’ll get an in-depth overview of financial aid notifications including how to interpret the information – including the jargon, what to look for on each one, and how to compare financial aid offers to determine the bottom line and help students and families make an informed decision.
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FAME's College Access and Financial Education Team:
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The Finance Authority of Maine (FAME) does not discriminate in the administration of any of its programs or in its employment practices on the basis of race, color, national origin, age, gender, religion, physical or mental disability, political affiliation, marital status or sexual orientation. FAME is an equal opportunity employer, provider and lender.
FAME provides links to other websites as a convenience and does not endorse or guarantee the content accuracy or usability of such sites.
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