When you apply for financial aid for college, you will probably be given an award letter. This is a document which details how much money you will be given toward the cost of college. However, there are different components to the award letter, and you should be aware of how they will affect you.

The best thing in your award letter is the scholarships. These are given based on merit. For instance, an athletic scholarship is given to a football or cross country star who agrees to play on the school’s sports teams. At Division I schools, athletic scholarships cover tuition and fees, room, board, and books. The student basically only has to pay for his or her toothpaste.

But scholarships are not only given to those with athletic prowess. After all, a school’s primary mission is to turn out scholars not athletes. A variety of merit scholarships are granted on the basis of high grades or test scores or for specific skills such as dance or photography.

Often, alumni and other benefactors set up scholarships to help the school attract a certain kind of student. There may be scholarships for students in specific majors or who come from certain locations. These scholarships often honor a graduate of the school.

Sometimes a scholarship will be good for all four years while other times it covers only a year or a semester. If it is a four year scholarship, find out what the requirements are to renew it. If it is a one time offer, find out how easy it will be to get similar funding in subsequent years.

Almost as good as scholarships are grants. The college or university has a pool of free money that they can use to put together financial aid packages for students. Many schools promise to meet the full need for all admitted students. They use grant money to make good on this pledge.

Grants aren’t targeted at specific students, but many times, a financial aid office will use larger grants to entice their most desired students to actually enroll in their college over other places where the student has been offered admission. It is possible to use your financial aid packages from different schools to get the school you want to attend to increase your grant award.

The next category of aid is called work study. Work study is largely funded by the federal government as a form of aid. But, the college is able to benefit from this by having the students perform duties in the dining hall or library. Most colleges prefer to hire students on work study grants over traditional student assistants because it doesn’t affect their bottom line.

Work study often helps you cover the non-tuition costs of attending school such as housing and food. But, keep in mind that you might be better off passing on work study aid if you think you can get a higher rate of pay or more hours by working off campus.

The final category of aid in your award letter is the student loan. Many students don’t realize the burden they are putting on themselves in the future by accepting student loans. Because it looks like part of the aid package, students just accept that they have to take out the loans. But, if you can come up with another way to make ends meet, take it.

Most students who take on student loans end up graduating at the end of four years with $20,000 in debt. That means that when they get out of college, they will owe $230 a month to the bank before they are even doing things like paying rent or saving for a home. An English major, for instance, can only expect to bring home $2000 after taxes per month, so that $230 is a big chunk of money.

When you go over your financial award letter, take a look at the different kinds of aid being offered. That will help you to decide what package is the right one for you.

Filed under: Grant Money For Education

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