Q.The award letter is for next year only. Can we expect the same amount of financial aid every year?

 

A. Because a family’s financial circumstances can change, you are required to apply for financial aid each year and the college will reevaluate the student’s eligibility for need-based aid. Think of this as your annual opportunity to check in with the Financial Aid Office. 

Certain changes such as an increase or decrease in parent income (a major factor in the Expected Family Contribution formula) or a sibling enrolling in, or no longer attending another college can impact the award in subsequent years. If family income, assets, household size and number in college don’t change, need-based aid usually remains fairly consistent.

On the other hand, if the student was awarded a merit scholarship from the college, they should pay close attention to the requirements needed to continue receiving the award. Requirements could include maintaining a minimum GPA or staying in a specific program of study. Not meeting these can mean losing the scholarship entirely and can have a significant impact on the bottom line.

Policies do vary from school to school especially regarding institutional financial aid. As you review financial aid awards, it’s a good idea to contact each college’s financial aid office to ask how these or other changes can impact the award moving forward.

 

Q.Do I have to accept loans or work study if included in the aid package?

 

A.Students can accept, decline or reduce any aid offered in the package. For example, if you have enough set aside in savings or prefer to use a payment plan offered through the college, you may decide to reduce or decline any interest-bearing loans. Likewise, If the student has a part-time or summer job to save for books and personal expenses, they may decide to forgo work study.

If borrowing is in the cards, make sure to compare all options before landing on your financing strategy, and consider maximizing federal student loan eligibility before turning to private education loans. Unlike many private loans, Federal Direct Loans have fixed interest rates and flexible repayment options including income-driven payment plans.

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