Financial Aid terms & definitions

Many of you are waiting on your acceptance letters and while acceptances are great, the award letters are even greater! In your award letter you will see a bunch of numbers and terms you might not be familiar with. Pay close attention to your award letter because in many cases (such as mine), it could determine your college or university decision.

Grants: That is what you definitely want to get, it is free money! This money can come from the state or federal government, the college itself, or any other private sources. Grants could be given based on low-income (most common one is the Pell grant), minority, academic accomplishments, or subject related field. The best about all of this is that a grant does not ever have to be paid back! They can be used in addition to loans and scholarships. I love grants!

Loans: If the scholarships or grants still do not cover the cost of tuition, you may want to consider taking out a loan. A loan is offered to pay off expenses such as textbooks, room and board, and tuition. If you are planning to take out one, the best ones to consider are Perkins loan and Stafford loan because they offer students lower interest rates.

Also make sure that your loan is a Direct Subsidized Loan. The U.S. Department of Education pays the interest of a Direct Subsidized Loan, if you are in school at least part time, six months after you leave school (which is your grace period), even after any period of deferment. A Direct Unsubsidized Loan on the other hand are given any time and you do not have to show any economic needs and you are responsible of paying for interests all the time while in school. Terms and rates tend to be more flexible on private loans.

Scholarships: They are usually awarded for good academic standing or for something you have achieved such as volunteering or extracurricular. There is no big difference between grants and scholarships. There are various need-based scholarships given and they do not have to be repaid either. Once you get it, it is yours and you do not have to worry about paying it back. There are corporations, companies, and organizations who give out scholarships by just writing an essay, apply to them!

I will be posting a list of scholarships for you to check out soon. Stay tuned.

Work-study or work award: You can also make your own money while you study and at your own school. Although let me warn you, you can only work part time and perhaps not earn a lot. In any case any money is money after all. The Federal Work Study programs funds students who are eligible. You can also be employed by a state or local public agency or a non-profit organization.

Tuition: This is basically the cost of the academic classes you will be taking. This does not include the cost of room and board or even textbooks. Do not get confused, they are usually listed separately in your award letter.

 Room and board: Is the cost of dorms and food. This is if you plan to live on campus and if you are commuting then you do not have to worry about it. However, some colleges and universities require first year students to live on-campus, check your college for more details.

 

Have you started your FAFSA?CSS Profile? Or applied to any scholarships? Write down your comment.

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