So you've figured out your cost of attendance, your expected family contribution, and the total amount of aid you're being offered at each college. However, not all aid is created equal, and a package that appears to meet your full need could actually get you into more debt than a package that leaves a substantial gap. A useful move both in choosing a college and budgeting out what you need for the year is to separate the grant and scholarship aid you've been offered from all of the other financial aid. This is going to involve some more math and record-keeping on your part. We'll delve into the best kinds of aid in the second part in our series on understanding your financial aid award letter.
Understanding Your Award Letter, Part II: Grants and Scholarships
College scholarships and grants are money you will not have to pay back. They come from a variety of places and have different terms attached. Grants are almost universally need-based, and will typically be awarded based on your expected family contribution and your estimated financial need. Scholarships are given based on a variety of criteria, and while some may carry a need-based component, not all do. Below are some of the most common varieties of grants and scholarships you're likely to see on your award letter.
There are state grants, federal grants, and institutional grants, but they will likely all be listed in the same place. The most common type of grant is the Federal Pell Grant. For 2009-2010, Pell Grants come in amounts from $976 to $5350 for full-time students. Especially needy students may also receive an SEOG, which stands for Supplemental Education Opportunity Grant. Award amounts vary, but they are usually a few hundred to a few thousand dollars. First-year students may receive an Academic Competitiveness Grant, or ACG, which carries an award of $750 to $1,300.
There are also federal grants for people in specific fields. SMART grants and TEACH grants reward students pursuing training in STEM (science, technology, engineering, and math) fields and education. SMART grants are only available to juniors and seniors who meet eligibility requirements.
Most states have at least one state grant program, and students who met deadlines and other criteria may see an additional state grant award on their letter. Many states also offer major-specific grant programs, as well as grant programs for other specific student populations. You can talk to you financial aid office or visit your state board of higher education's website to find out more about these programs.
Most universities offer at least one need-based scholarship, which is roughly the same thing as a university grant. Numerous varieties of university scholarships exist, but the most common are need-based, academic, major-specific, and athletic. If you've received a grant or scholarship award from your college, you will likely receive a letter explaining it in more detail. Make note of the terms of the award, including whether it's renewable and what conditions have to be met to receive it. This is especially important for college academic scholarships, as many require a fairly high GPA or heavy course load to renew.
It's also important to keep track of the grants, scholarships, and other institutional aid you receive because sometimes the awards may not appear on your first award letter, or they may show up under a different name. Many scholarships come from endowed funds, and you may get a letter giving the more general name of the award, but may see it on your letter under the donor's name. This can cause confusion and disappointment if you think you got a bonus scholarship but actually did not, and if your award is missing, adding it on later may result in your financial aid being recalculated if you're funded beyond your financial need or your cost of attendance.
Finally, if you've received any scholarship money through places other than the university or the state (such as awards you found through our free scholarship search), make sure it's represented on your award letter. Many scholarship providers send the check to your school, and the school will need to make sure it doesn't alter your aid package before they disburse it. If you need the money to pay tuition or buy books, you want to make sure everything's set up so the check can smoothly make its way from the scholarship provider to your account.
If you're comparing offers from different schools, tally up the grant and scholarship aid you will receive this year, as well as the aid you can anticipate in future years. Compare what your total award over four years will be for each school for the most accurate picture of who has given you the best deal.
Now that we've gotten through the free money, we can get to everything else. Check out Part III for information on work-study and loans.