August 14th is Financial Awareness Day! In honor of that, we present to you an easy-to-follow infographic detailing the financial aid process. It’s about that time before the school year starts that we start signing our lives away. But in hindsight, it’s an amazing revelation that many students didn’t understand the financial aid package they received from their universities.
But I get you. The financial aid process can be confusing! Sometimes you just want to give up and say:
1. Understand Your Financial Aid Package
What types of financial aid are you being offered? Is it free money like scholarships or grants? Is it a job? Or is it a federal loan you’ll need to repay? And if you got a bunch of loan offerings, what kinds of loans did you get? A Perkins Loan? A subsidized Stafford loan(i.e., a loan that the Federal government pays the interest until you graduate)? An unsubsidized Stafford loan (i.e., a loan that accrues interest even while you’re in school)? A Parent PLUS loan (which parents will have to start paying immediately unless they defer)?
Depending on the different loans you were offered, you will have to make decisions based on your or your parent’s/guardian’s credit-worthiness. Remember, just because you were offered the loan, doesn’t mean that you will qualify for it — not if you don’t have credit or a cosigner that is credit approved.
Make sure to read the fine print of the scholarships you were given. Some require that you maintain a certain GPA or even participate in certain events sponsored by the organization that awarded you money. And with Work Study jobs, some get really nit-picky — make sure that if you need, you’re allowed to work a different job!
2. Keep Looking for Financial Aid
Be active about financial aid. Nothing is set in stone! Your activities change, your finances change. Here are some actionable steps you can continue to take even after freshman year starts.
- Keep looking for scholarships! Just because you finished with high school, doesn’t mean there aren’t any more scholarship options for you! Plenty of organizations continue to offer aid to students in college.
- Apply for every form of aid you may qualify for, regardless of the amount. Even a small grant could help pay for your textbooks.
- Petition your financial aid for the upcoming quarter/semester! Your financial situation may have changed this year, but the FAFSA only takes into account the previous year’s family income. A simple call to your financial aid office or a thorough look at your school’s website could offer solutions.
- Reapply for aid you didn’t receive the year before! Same explanation as above.
- Circle your dates. Set a reminder on your phone or email to remind you to apply for more aid! It’s a big mistake to miss application deadlines by a day, because financial aid is first come, first serve.
3. Use Loans as a Last Resort
If you don’t have to accept the full amount of loans, don’t. Pay out of pocket as much as you can, because even if the instant payment takes a big chunk out of your wallet now, it’s still cheaper than having to pay for interest. Hopefully, you’ve been saving.
If you didn’t think your financial aid was sufficient, check this video out:
4. Pay Accrued Interest While You’re Still in School
I don’t think a lot of people think of this one, but if you’ve got a bunch of unsubsidized loans or private loans that are accruing interest as you study for that final, it’s a great idea to pay off the interest every semester and keep your costs down. That way, your interest won’t have doubled your loan amount by the time you graduated (not literally, but you see what I mean).
5. Save Save Save
So many random costs come up that your tiny budget won’t be able to handle, so make a point to save some of your income or dispersed financial aid for the upcoming semester or year. Who knows, you may lose a scholarship or loan that you didn’t anticipate losing in your budget. It’s ALWAYS a good idea to have some money in your bank account.
Now, onto the infographic!