Financial Aid 101: Things You Need to Know

Award season is just around the corner for many of our seniors. This means they’ll soon begin to receive their financial aid packages from many of the colleges they’ve been accepted to. In the spirit of trying to tackle a process that, for most, is incredibly daunting, we’ve decided to break down a few important terms and concepts.

First up - Defining Financial Aid. In short, Financial Aid is a broad term that refers to four types of funding awards: 1) Scholarships, 2) Grants, 3) Loans, and 4) Work-Study. So when you hear a higher ed representative use the term ‘financial aid’ they are typically referring to all four items together.

This is the most confusing part for many of our families because in our community, when we use the term ‘financial aid’ we're usually referring solely to scholarships. Just keep in mind that when you ask a college rep, ‘how much financial aid did I get?’ they’re going to tell you not only the scholarships that you received but also any grants, loans, or work-study that will be offered as well.

Of course everyone knows that a scholarship is an award that is earned, typically through either scholarly merit or leadership and community involvement recognition. Scholarships are free money in higher ed. Which means you don’t have to pay it back! Sometimes some scholarships require you to maintain a certain GPA while in school, or even write an essay detailing how school is going, but essentially you're being recognized and awarded for the work that you’ve already done and the potential that you show in being a great student.

So we always want Scholarships! Never turn down an opportunity to apply to a scholarship. Even if you think your GPA is too low, or you don’t have enough experience, apply anyway! Because you honestly never know what may happen and you don’t want to miss out on free money.

Grants, like scholarships, are free money as well and do not need to be paid back. Typically grants are need based. This means that in order to qualify for a grant you must complete the Free Application for Federal Student Aid or FAFSA. The most common grants that our students receive are the PELL grant and the OTAG grant. Again both are need based grants, which means that after you and your family completed the FAFSA it was determined that there would be a significant gap between what your family can contribute (or pay) towards your education and the general cost of attendance to your university of choice.

Financial Aid also refers to loans, which is money that you and your family borrow but must pay back. There are two types of loans offered:

Subsidized loans – this means that the government pays the interest on the loan while you’re in school.

Unsubsidized loans – this means that you’re responsible for the interest on the loan for the entire duration of the loan (even while you're in school).

Lastly, there’s work-study. In short, work-study is a grant program that allows a student to work on campus and earn money. So while it’s not free money (because the student has to work for it), it never has to be paid back.

Of course whenever we talk about financial aid, our students and parents always tell us, “I want to go to school but I don’t want to take out any loans.” And we couldn’t agree more! Loans should absolutely be your very last option. But guess what? In order for that to be a reality you HAVE to do your part! That means, you have to make good grades, you have to get involved in your community, you have to step up and take on leadership roles, and you HAVE to apply to scholarships.

The more free money you get, the less loans you have to take out. But it’s all on you! Applying to scholarships isn’t easy, In fact it’s a job all on its own. But would you really expect someone to give you money for free? Of course, not. You have to work for it. You just have to make up your mind now that you want your education paid for and put plans into place to see it through.

We believe you can do it and we’re here to help you as much as we absolutely can. So be sure to plug in and let’s make this dream a reality together!