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Bottom Line Up Front

  • Financial aid can come in several forms, including gift aid, loans and work-study. Make sure you read aid offers and award letters closely to understand exactly what’s being offered. 
  • Financial aid can change from year to year. Before you accept a financial aid package, find how your aid might change in the future and what you need to do to keep getting help with your education expenses.

Time to Read

5 minutes

December 15. 2022

Finishing high school, getting accepted into college and beginning enrollment can be so exciting. So is receiving your college financial aid offer! It may seem like free money, but college financial aid is actually a little more complex than that. To get the full picture, you need to look at what your financial need really is for your next 4 school years at college and how financial aid works. We’ll share how you can maximize your eligibility for student loans, private loans, work-study and other types of financial aid through the various financial aid programs. 

It Starts With FAFSA

A college’s financial aid offer is based on the information submitted through your Free Application for Federal Student Aid (FAFSA) application. It will outline a combined financial aid application process package that will include the following:

  • Federal grants and student loans
  • College scholarships and grants 
  • Work-study programs and opportunities

Let’s take a look at each section individually. 

Federal Grants and Student Loans

The loan forms part of a loan aid program. It typically incurs interest. A grant is more like a gift—you don’t have to pay it back—but it should be used to pay for school.

Federal grants are a form of federal financial aid available for students attending a career school, a community college or a 4-year college or university. Most federal grants come from the U.S. Department of Education. These might include TEACH (Teacher Education Assistance for College and Higher Education) Grants, Iraq and Afghanistan Service Grants, and FSEOG (Federal Supplemental Educational Opportunity) Grants or Federal Pell Grants. 

Each type of grant has its own financial aid eligibility requirements. For example, the Iraq and Afghanistan Service Grants are only for qualifying armed-service members who served in these countries, so it’s wise to check for grants available to servicemembers or military family members. If you’re a veteran or the dependent of a veteran, you may be able to receive assistance available through the Post 9/11 GI Bill as a qualifying student.

Eligible dependents of veterans who are permanently disabled due to a service-related condition or who died while on Active Duty may be eligible for education and training opportunities through Survivors and Dependents Assistance. 

There are other sources of grant and loan funding. For example, first-year students can also use the nonprofit CSS Profile to access up to $9 billion in scholarship aid to both undergraduate and graduate students. 

College Scholarships and Grants

Most schools and colleges have their own student financial aid departments.

Some of these grants, scholarships, bursaries and other forms of financial aid are based on performance, meaning that they typically go to students who excel academically, athletically or both. 

Then there’s need-based financial aid. This aid goes to students who have demonstrated financial need and who wouldn’t otherwise be able to afford college. 

Some forms of college-based financial aid are very specific, pertaining to students who are socially or economically disadvantaged, are disabled or show promise in particular interests or hobbies. Merit scholarships also fall into this category.

Most of these grants and scholarships are ultimately funded by donors to the college or by the college itself. 

Work-Study Program and Opportunities

Work-study is just what it sounds like. It’s a job—almost always on campus and typically working part-time as part of the university staff. It’s designed to be done around studies to help with college costs.

These opportunities aren’t as sought-after as grants or scholarships, but there are distinct advantages to work-study jobs. For example, many international students on student visas aren’t allowed to work unless it’s specifically in a work-study role.  

Receiving Your Offer

Your offer may include a number of different loan types. Federally subsidized loans don’t accrue interest while you’re a full-time student, but unsubsidized federal student loans do. 

Your offer may also include a Direct PLUS loan, which is a federal loan available to qualified parents. If accepted, repayment on this loan begins immediately, and the interest rate and loan fees are generally higher than for other student loans.

Your financial aid offer will show an Expected Family Contribution, known as an “EFC.” This isn’t necessarily how much you or your family will be expected to pay as repayment; instead, it’s a number your school uses to calculate how much financial aid you’re eligible to receive. 

Grants and scholarships don’t typically cover the entirety of your college cost of attendance and education expenses. Tuition and books, room and board, computer and internet, and the cost of a vehicle or public transportation, for example, must all be considered. Then there are necessities and personal expenses, such as hygiene products, clothing and haircuts. It’s important to know the real cost of college attendance in the city where you’ll be living as no two cities are alike. No two financial situations are alike either, and extra student loans are often needed to cover an undergraduate student’s academic year.

Choose What Works for You

You don’t have to accept an offer “as is,” nor do you need to borrow the full amount offered. In fact, because you’ll eventually be paying this money back, it’s sensible to borrow only what you’ll need. 

You can also always appeal the financial aid award. You could urge the school to consider different ways you may be in financial need. You may have special circumstances that weren’t covered in your financial award letter that would qualify you for more financial aid, such as a job loss, the death of a parent or spouse, or a large medical expense.

In addition, if another school sent you a better offer, you might even be able to use that in an appeal to the financial aid office. The school you’re appealing to should be flattered that you’d prefer to attend their school, and they may even feel competitive about attracting the best college students away from another school.  

Comparing Offers

If you have multiple offers and want to compare them side by side, the Consumer Financial Protection Bureau has a simple worksheet. If you’re lucky enough to have received offers from more than 3 schools which you’d consider attending, you can compare them in batches. Then, you can compare the “winners” from each batch with each other.  

If You Don’t Understand, Ask

Understanding college aid financial offers could affect your finances for years to come, so it makes sense to get clear on all the details before you send your letter of acceptance. If you’re still confused after reviewing an offer, call your school’s loan officer or visit the financial aid office for an explanation.

If your financial aid package doesn’t stretch far enough to cover what you need, Navy Federal could help you make up the difference with a private student loan.

Next Steps Next Steps

  1. If you want to know how much you need to save for college, check out our handy College Savings Calculator.
  2. If you’d like to speak with one of our financial planners about getting student loans or refinancing your existing student loan, reach out to us today. 


This content is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.