Apr 09, 2014 Lindie Johnson

What's included in your financial aid award

Understanding your child’s financial aid award is probably more daunting than completing all the admission requirements to get him or her into college. Basically, the financial aid package includes the state and federal funds to pay your tuition as well as any awards the college is giving you from their own funds. Keep in mind that the money in the award may not (and usually doesn't) cover the entire tuition or even your family's Expected Family Contribution, as determined by the Federal Department of Education when you submit the FAFSA. So you and/or your child may have to figure out how to pay the remaining balance.

Gift AidFinAid Sources

Financial aid that is considered a gift are grants and scholarships. College grants are free money given to you to reduce the amount of your tuition. In other words, your child doesn’t have to repay them. They can be given to you by the State of Rhode Island (if you are a resident and you filed your FAFSA by March 1), the federal government, the college/university, or a private donor. 

Grants can vary according to who they are given by. For instance, your child may receive a grant specific to age, gender, race or academic pursuit. Or the grant may be awarded solely on financial need, as is the case for all federal grants and most state-based grant programs.

State and federal grants are the most common types of grants students receive. For example, the Federal Pell grant is available to students who meet certain qualifications like being an undergraduate and from a low-income household. Other grants are geared toward academic pursuits such as music, technology and nursing. These awards are usually offered by private organizations or donors through the college itself. 

Another source of free money are scholarships which may also be listed on the financial aid award. Scholarships may be need- or merit-based. Need-based simply means based on financial need. Merit-based means students earn the scholarship based on either meeting or exceeding specific standards. Standards are set by the person, company or organization giving the scholarship, or by the school. Some scholarships you need to pursue on your own and will not be included on your financial aid award. You can look for local scholarships at www.rischolarlships.org

Self-help Aid

Self-help financial aid is repaid by paying money or working. Whether your child has to work to repay the self-help aid or not depends on the type of aid on the package.

Work Study

Work study is included on the award. However, it doesn’t reduce the cost of tuition. The work study program offers wages to pay the student through part-time employment to assist with college expenses like books or tuition. Your child will receive at least the federal minimum wage per hour for working through the work study program. It is up to your child to apply for work study jobs and work the hours necessary to receive the funds awarded. Not everyone receives work study.


Certain types of loans are also listed on the financial aid award. They must be repaid to the lender, regardless of the type of loan. Some student loans are based on credit. These are typically private student loans offered by financial institutions and companies and these would not be included on your financial aid award. You need to pursue these loans on your own.

The federal government offers student loans such as subsidized and unsubsidized Stafford student loans and the federal Perkins loan. These loans are typically a student's best option for borrowing because they offer low/no fees and low fixed interest rates. Depending on your financial need and eligibility requirements, you may have one or both federal loans on your financial aid award. 

Perkins loans are financial aid offered through the school. Federal monies are given to participating colleges to distribute to students according to financial need. Not all schools have these monies to award to students so these loans are less common than federal subsidized and unsubsidized Stafford loans. 

Lastly, the Federal PLUS Loan could be included on your financial aid award letter. Not all schools include this loan in financial aid awards and you can apply for this loan regardless of whether or not it is included in your package. There is a basic credit check for this loan. Before accepting this type of award, make sure to compare it to other loan options to ensure you are getting the best deal for your family. Rates and terms vary widely for private and state-based loans so be careful to understand the details before you commit to any loan, regardless of whether or not it is included in your award. 

Regardless of the loans taken out to pay for college, the terms of the loan agreement will not be on your financial aid award. Only the money eligible to receive is listed.

Accepting or Declining Aid

A financial aid package isn’t concrete. For instance, you or your child can accept or decline one, part or all of the award. Also, the award may change. You may not be eligible for the PLUS loan because of your credit. It’s best to talk to the financial aid office about any questions you have. If you don't think the award is enough, or your family circumstances have chance, you can appeal the award. Stayed tuned for our upcoming blog on appealing financial aid awards. 

Published by Lindie Johnson April 9, 2014
Lindie Johnson