Show Me the Money!

Your FAFSA is done and has been submitted. Looking to enroll in the fall of 2023 or spring 2024? Make sure the colleges have the information they need. 

So what comes next? First, it is important to make sure that the government received your form and that the information is being processed smoothly. You will need to monitor your email and the FAFSA website closely. 

Then wait for your college acceptances! Each school will provide you with a financial aid letter estimating how much your first year will cost — along with a package of possible grants, loans and work-study money to make it possible for you to attend. It is important to compare these offers carefully so you choose the best college for you and your budget.

Read on for what to expect…

Important First Steps: Make sure your FAFSA has been submitted successfully and is being processed. If all goes well, your colleges will get your FAFSA information within a few days. Next…

It’s the day you’ve been waiting for. Your first college acceptance letter has arrived! You will also get another letter telling you what the college costs and some ways to pay for it. This is your “financial aid package.” It is important to read it carefully and compare it to any other offers you receive.

Learn how to read and compare these letters below. Here are new terms you may see:

Cost of Attendance: The total cost of attending college. This will include direct costs paid to the college (like tuition and fees) and often indirect costs (like books and transportation).

Expected Family Contribution: The amount you and your family are expected to contribute toward college each year, based on your FAFSA form.

Scholarships or Grants: Free money for college awarded by the government, colleges or private organizations. One example is the federal Pell Grant for students with financial need.

Work-Study: Federal money you can earn by taking a part-time job on campus.

Federal Direct Government Loans: These loans come in two forms: subsidized and unsubsidized. The subsidized loans are for students in need and have easier repayment terms.

Parent PLUS Loans: These are federal loans that parents can use to cover education expenses.

Private Loans: These are offered by private lenders such as banks. They often charge higher fees and interest rates than federal student loans, and repayment terms may not be as flexible.

It’s time to get real. You need to figure out what college will cost. This will be different for each school.

To get started, take a close look at your financial aid letter. Look for a section called “estimated costs.” Your letter should list the costs you are likely to face. But some colleges do a much better job of this than others. You may have to hunt for this information or, for personal costs, do your own estimates. Here are some costs to keep in mind…

College Costs

These are the costs that the colleges bill you for directly. There are only a few, but they are the big-ticket items:

Personal Costs

These are the expenses you pay out of pocket. The good news is you can control them by being careful. The bad news is that these costs can add up. Try to budget for real life.

Comparing College Costs Correctly

Many colleges list grants, loans and other support per semester, but college costs and your expected contribution are for the entire year. Be sure to compare costs and aid for the same time period. And do your best to remember everything. Need some help? Our friends at uAspire have a College Cost Calculator that we love.

In general, you want to start by looking for money you do not need to pay back, like grants and scholarships. Then consider more costly options, like loans, only as needed. Below is a short list of the most common forms of “free” money along with federal work-study opportunities.

Federal Grants

The two most common are the Pell Grant and the Supplemental Educational Opportunity Grant (look for “SEOG” on your letter). Both are based on financial need.

State Grants

Many states offer help to students who stay in their home state for college. New York, for example, has the popular Tuition Assistance Program (look for “TAP”). Ideally, you put in applications for the state grants when you were filling out your FAFSA form. State programs are often competitive and awarded on a “first come, first served” basis.

College Grants and Private Scholarships

Many colleges offer grants based on merit (such as a high grade point average or strong test scores), financial need or athletic ability. Private groups also offer free money for college, but you have to find it and apply for it. It won’t be provided through your aid letter. Look online or talk to a college counselor for more info.

Federal Work-Study

Students with financial need may be offered the opportunity to work on campus. As with any job, you are paid for the number of hours you work. You can use the money any way you want. Your financial aid letter will tell you how much money you can earn under this program, but it is up to you to find a job and work the hours needed to get this money.

College costs have been rising steadily, so many students need to take out at least a small loan to get by. Nobody likes debt. But you will probably make more money with a college degree than without one, so loans can be an investment in your future.

Good rules to keep in mind: If you or your parents need to borrow, borrow as little as possible. Be sure to use government-backed loans first. They are cheaper to pay back and more forgiving if you need extra time. Private loans and credit cards should be a last resort. Here are the options you may see in your financial aid letter, beginning with the best options first. 

What follows is a lesson on comparing two financial aid packages. It will give you a sense of what to look for. But remember, every package will look different. Sometimes they are confusing or incomplete. Call a college financial aid officer or talk to an adult you trust if you need help.

Cost of Attendance: BigBucks is more, LowerCost is less. (Important: Do your own budget to get a true sense of your costs. Colleges often do a poor job of estimating personal living expenses in their figures.)

Both schools offer a lot of Scholarship and Grant Support. Colleges look at both financial need and your academics to determine how much to offer—and you did well! But call and ask for details. Is the free money guaranteed for only the first year, or longer? Does the school require that you get good grades? Know the rules.

Next, look at the Net Price, the cost of college that remains after these grants. This is the amount you will need to raise—through loans, work-study or other means.

Now look at the Loans. Remember, some loans are cheaper and easier to manage than others. You want the lowest-cost loans possible. The amount you can get through Federal Direct Loans will be the same, but schools can use their judgment for government-backed loans. (Also, consider total loan debt. Add up the loans offered and multiply by the years it will take to get a degree. At both colleges above, this is $5,500 in loans X 4 years = $22,000.) And look at the Work-Study money offered. This is money you can earn for personal expenses with a campus job. But you need to find the job and work the hours.

Finally, look at the bottom line. What is the gap you will need to fill for the first year? You will need to find this money somewhere: college savings, loans from your family—or another job (eek!) on top of your work-study hours.

Be sure to add up the total amount you might need to borrow to get your degree. In this case, BigBucks University requires more loans…and has a larger gap to fill. If these costs are too much for you—and you really want to go to this school—call the college office. You may be able to appeal your package and get more aid. College costs are very important to consider in choosing a school. But also make sure it is a high-quality school that you will enjoy. Weigh all the factors before saying “yes” to any college.

You have successfully filled out your FAFSA form. You have financial support. You’re on your way to college. Have a great year. Be sure to keep all the information that you have collected—and stay connected to our website. We’ll have advice for you as you start college. And you’ll need to fill out a FAFSA form again next year!