May 1 is known throughout the US as National College Decision Day. This is the day when most students applying to college must make their final decision and submit a deposit to their chosen institution.
The weeks leading up to this decision can be a stressful time. Students will begin to receive financial aid offers in March or April and have just weeks to compare the pros and cons of each offer. This is usually complicated by the fact that financial aid offers are not standardized and are often difficult to read, especially for students who may be the first in their family to go to college. NPR reports some students receive financial aid offers that even describe loans as “awards” or use confusing abbreviations and jargon that make it almost impossible to know what it is.
Here are five common myths students believe about financial aid offers.
Myth #1: Your financial aid offer is all “free money”
Your financial aid offer is made up of grants, scholarships, and loans. The average student will likely see a lot more loans on their offer than anything else. Loans are not free money. They must be paid back with interest, meaning the original amount you agree to will grow over time if you don’t keep up with interest payments. (An exception to this is a subsidized student loan from the government, in which the interest is waived while you attend school.)
Myth #2: Financial aid offers will meet all your financial need
When you fill out the FAFSA, you get a number known as the EFC (Estimated Family Contribution) that the government predicts your family can contribute to your college costs. In an ideal world, your EFC is all you would have to pay out of pocket. However, the reality is that while most schools will try to meet the full financial need of the students who apply, funds are limited, and they may not be able to keep up. This means the amount students and their families are expected to contribute is larger than anticipated.
Myth #3: Scholarships and work-study offers are guaranteed money
Most students want to see scholarships and work-study opportunities on their offers. This is because scholarships and work-study are money you earn that you don’t have to pay back. However, unlike grants, which are given solely for financial need, scholarships are often dependent on you meeting your end of the deal—for example, maintaining a certain GPA. Scholarships are also not always applicable every year; some are only available to freshmen for instance. And work-study funds are dependent on you applying for a work-study job and showing up to work. (Apply for jobs early.)
Myth #4: You must accept everything in your financial aid offer
As stated above, financial aid offers will include grants, scholarships, work-study, and loans. Many students and their parents feel the offer is an all-or-nothing deal, but you should never feel pressured into taking out a loan if you don’t want to. Colleges suggest loans they think would be beneficial to you, but you or your parents may be able to fund some of the money elsewhere so you don’t have to take out a loan at all, or you can find another provider with more beneficial terms. Get in touch with the financial aid office to let them know which parts of the offer you accept and which you’ll pass on.
Myth #5: Your financial aid offer is non-negotiable
Did you have a change in family circumstance that is not reflected on your FAFSA? Is your offer much less than expected? It is possible to negotiate your offer with the school to see if they can come up with something better. Financial aid officers can use their professional judgment to counter a financial aid appeal. It’s best if you go this route to be as polite and as professional as possible and provide lots of evidence to back up your claims. Some schools will even match a competing offer from another institution.