Understanding College Financial Aid & Grant Packages

Outlining the types and amount of financial assistance that you receive

By Paula Andruss

As the costs of college continue to rise, borrowing money for your education has become one of the best investments you can make. That's why college financial aid is so important, whether it comes in the form of grants, scholarship money, work-study, or loans. While applying for financial aid can be a lengthy process, results are well worth it in the end.

About three to six weeks after you submit your Free Application for Federal Student Aid (FAFSA) to obtain financial aid, you should receive a Student Aid Report (SAR) from the government. Check over this report carefully to make sure the information from your FAFSA is correct and that it is being sent to the schools to which you have applied. It's also a good idea to get in touch with the school or schools that should have received your SAR to make sure that they did in fact receive it.

The SAR will list your Expected Family Contribution (EFC)—a dollar amount calculated from a standard formula by the government that indicates how much your family should be able to contribute to your educational expenses. This number is critical to your financial aid package because it determines your financial need, or how much financial aid you are eligible to receive. In general, your financial need is calculated by subtracting your EFC from the total cost of attending each individual school.

Once the paperwork is complete, each college's financial aid office will put together a financial aid package comprised of federal and non-federal aid such as loans, grants, scholarship money, or a work-study program to help meet your needs.

It's difficult to estimate exactly how much financial aid you will receive because educational costs vary from school to school, and different colleges participate in different financial aid programs and have varying amounts of grant money to award. But each school's financial aid office will do its best to make up the gap between your EFC and the cost of attending that school.

When the process is complete, you will receive financial aid award letters from your schools of interest. Each will outline the types and amount of financial assistance that school is offering for that year. When you receive the award letters, be sure to compare the aid packages offered by the different schools; even though one school may appear less expensive, it may not contain the best deal for you.

Paula Andruss is a Cincinnati-based freelance writer whose work has appeared in publications including Parents, WomensWallStreet.com, Marketing News, Crain's Chicago Business, and Cincinnati magazine.