Tuesday Tips for May 2024

Comparing Financial Aid Offers and Paying the Remaining Balance

It’s been a long wait, but financial aid offers are finally starting to arrive! No two financial aid offers look the same, which can make comparing offers challenging. However, it's important to understand the offers so you can get a realistic estimate of the cost to attend the schools you're considering. Next, you’ll want to develop a plan to pay the remaining balance. Below are five key pieces to help you review your financial aid offers and pay the remaining balance. 

1. Know the different types of aid.

There are three categories of aid you might see on your financial aid offer: gift aid, federal student loans, and work-study. Gift aid does not need to be repaid and is used to cover the cost of education. Examples of gift aid are scholarships, merit aid, grants, and waivers—this is the type of aid you want to see the most of on your offer! Federal student loans are funds that will need to be repaid with interest. Most students will be offered a total of $5,500 in federal student loans. Borrowing these loans is optional; borrowing less or declining these loans won’t impact your other financial aid. Work-study money is earned throughout the academic year via paycheck. Work-study funds are not applied to your bill but can be used to pay for trips home, laundry, food, and supplies. 

2. Know the net cost and amount to be billed.

Once you've received your financial aid offers, you can determine your net cost to attend each school. The net cost is the cost of attendance (focus first on direct expenses like tuition, fees, housing, and food) minus gift aid. Net cost is calculated before loans and will vary by school, so comparing offers is essential. To help you get an apples-to-apples comparison, use FAME’s Comparing Costs and Financial Aid Offers worksheet. This worksheet will also help you determine if borrowing is right for you by showing the impact of federal student loans on the remaining balance.

3. Know the terms of the aid you're accepting.

Scholarships, merit aid, grants, and waivers may be offered based on factors such as grades, enrollment, and housing. Are you planning to attend full- or part-time? Will you live on campus or at home? The aid you are being offered is based on certain assumptions. Are these assumptions correct? Understanding the terms of the aid you're offered can help ensure the offer is correct based on your circumstances and give you an idea of what aid may be available in future years. 

4. Know where to find free money!

Did someone say free money? Scholarships are a great resource to tap into when determining how to pay the rest of the bill. We know hunting for scholarships can be time-consuming, but it’s worth it for free money. We have some great scholarship resources available on our website. You can kickstart your search with our Maine Scholarship Search tool and organize your scholarship information with our handy scholarship tracking spreadsheet (.xlsx format). Also, check with your college to see if there are scholarships available that require a separate application beyond the FAFSA, and ask if future merit aid might become available for good grades. Similarly, consider other free money opportunities that may be available to you through your employer or organizations to which you belong. Keep applying for scholarships and searching for other opportunities year after year to help keep costs down. 

5. Know your options for additional ways to pay.

Other ways to pay include the ever-important savings, summer earnings, tuition payment plans, and loans. Remember, every dollar saved is one less to pay back with interest. It's never too late to start saving for college, and summer earnings can make a big difference. Additionally, most schools offer tuition payment plans that spread the cost of tuition and other educational expenses across several payments over the course of a single semester or term. Lastly, loans are a possible option to fill the gap. If you need to borrow, it's crucial to understand the terms, repayment options, and return on investment of the loan you're considering. Before borrowing any loans, use FAME's Student Loan/Salary Calculator. This tool can help you connect the dots between the amount you’re borrowing and your ability to repay the loans after graduation.

FAME is here to help.

Would you like assistance reviewing your financial aid offers? Sign up for a free Financial Aid Coaching session with one of our financial aid experts. New appointment times are added to the schedule frequently. You can also call us at 800-228-3734 or email us at Education@FAMEmaine.com.

For more helpful information and resources, you can find previous issues of Tuesday Tips on our website.

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FAME's College Access and Financial Education Team

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