Short, practical explainers on the parts of financial aid that confuse families most.
Grants versus loans
Grants versus loans: what actually needs to be repaid
Award letters often group gift aid and borrowed money together. Here is how to separate them.
Grants and scholarships are gift aid. In most cases they do not need to be repaid, although some grants can convert to loans if you drop below the required enrollment or do not meet service conditions.
Loans are borrowed money. Federal student loans have fixed interest rates and borrower protections set by law. Private loans are set by lenders and can vary a lot.
When reading an offer, add up gift aid on one line and loans on another. The gift aid total is what truly lowers the cost of attending.
Questions to ask
Is this grant renewable, and what GPA or enrollment do I need to keep it?
Can any part of this award change into a loan?
Financial aid offer comparisons
How to read a financial aid award letter
Award letters are not standardized. A quick method to find your real cost.
Find the cost of attendance first. It should include tuition, fees, housing, food, books, transportation, and personal expenses. Some letters list only direct costs billed by the school.
Subtract only grants and scholarships to get your net price. Then look at work-study and loans separately as ways to pay that net price.
If two schools present costs differently, rebuild both letters on a single worksheet before deciding.
Questions to ask
Does this cost of attendance include housing and books?
Which amounts are estimates and which are guaranteed?
Work-study basics
Work-study basics for students and families
Work-study is earned through a job, so it rarely reduces your first tuition bill.
Federal Work-Study gives eligible students the chance to earn money through part-time jobs, often on campus. The amount on your letter is a maximum, not a payment.
Because you are paid as you work, plan to use work-study for ongoing expenses like books or transportation rather than an upfront tuition balance.
Scholarship education
Where to look for scholarships without paying for searches
Legitimate scholarship searches are free. Practical places to start.
Begin with your school's financial aid office and department pages, then check local community foundations, civic groups, and employer or union programs.
Be cautious of any service that charges a fee to find or guarantee scholarships. You should not have to pay to apply for legitimate awards.
Questions to ask
Who funds this scholarship, and how is the recipient selected?
Student aid terminology
Student aid terms you will see on every form
A short glossary for the words that confuse most families.
Cost of Attendance (COA): the school's estimate of the total cost for one academic year.
Student Aid Index (SAI): a number from the FAFSA that schools use to estimate need. It is not the amount you will pay.
Net price: the cost of attendance minus grants and scholarships.
Gap: any remaining cost after all aid you choose to accept.
Student financial planning
Building a realistic school year budget
A simple way to plan costs by semester and by month.
List fixed costs per semester such as tuition, fees, and housing. Then list monthly costs such as food, phone, and transportation.
Match each cost to a funding source: gift aid, savings, family contribution, work earnings, or loans. Any cost without a source is your planning gap.
