How to Compare College Financial Aid Packages

How to Compare Financial Aid Packages

Choosing from multiple financial aid packages can be overwhelming. Each award letter you receive may be formatted differently and may offer different options. Award letters list a number of choices, such as scholarships, work-study, and loans. It may seem like you have many choices, but each comes with its own drawbacks. It is important to be aware of what each option means.

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Here is a short primer on the three major types of financial aid you will encounter.

Grants and Scholarships

Grants, scholarships, tuition waivers, and other similar forms of financial aid are usually dependent on academic excellence and achievement-related conditions. These forms of financial aid do not have to be repaid. However, there are often specific terms to each scholarship. There may be a minimum GPA requirement, compulsory courses, or other stipulations you’ll need to meet.  It’s important to note whether the scholarship can be increased in case sudden family financial issues arise. Also, the scholarship may not be recurring for every year you are in college, so that’s another important clause to review.

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Work-study programs are another financial-assistance option that do not have to be repaid. A work-study program allows you to hold a qualifying, part-time job while in college to assist in paying for book fees and other personal expenses. When considering work-study, determine if a job is guaranteed, how it will be assigned, and the wage that comes with it. It’s also important to note whether your earnings will go directly toward college fees or be deposited into your (the student’s) personal account. Usually, work-study employment options are on campus, but there may be a few academically related off-campus positions available as well.


There are two types of college loans that a school will offer you. Subsidized loans are based on need, so there is no annual interest while you are in school. After graduating, however, interest accrues. On the other hand, unsubsidized loans are not based on need and have annual interest payments. Each loan will have different policies and interest rates, so combing through the terms of each is crucial. Be aware of when repayment of the loan will need to begin and whether the government will be paying the annual interest.

[Not enough aid? Read: Making a Financial Aid Appeal: What Families Need to Know]

Comparing Your Options

When comparing your financial aid options, organize the information given in each award letter. This can help you determine the total amount of aid that is being offered. Gift aid is the most important part of the letter, but choosing between work-study and loan options can be tough.

Depending on your course load in any given semester, work-study may be a difficult commitment for a student. It can be hard to manage the transition to college, a full course load, and employment at the same time. On the other hand, loans will need to be repaid, and you may have to pay interest for each year of college. When examining loans, compare interest rates and repayment policies to find the best loan to accept.

When organizing financial aid information, cost of attendance should be taken into consideration. The net cost, or the out-of -pocket cost, is the amount after total fees, including living expenses, subtracted by the amount the school offers in grants, scholarships, or loans. If the net cost is too high, this may rule out a college, as you may have to take out more private loans to cover the difference or take on a part-time job.

If you have any unanswered questions, contact the college’s financial aid office for more information. Once a decision has been made, only borrow what is necessary and can be repaid; accepting loans that aren’t essential can amount to debt and headache later on. However, don’t rule out colleges simply because another is offering more aid. Carefully consider your educational goals as well as affordability.

PriyaSudendrajpegPriya Sudendra is a recent graduate of University of Colorado and a staff writer for CollegeFocus, a website dedicated to helping students deal with the challenges of college, including housing, finance, style, health, relationships, and transferring from a community college to a four-year university. You can follow CollegeFocus on Twitter and Facebook.