Accepting Financial Aid & Your Responsibilities
You’ve committed to the idea of going to school. You might have even picked out your classes. Now it’s just a matter of paying for your schooling. Hopefully you have followed our FAFSA guide so you know how to fill out the FAFSA and what types of aid you might be eligible for. The next step is to dive into finalizing your qualification, accepting aid, and planning to pay it back eventually. Before you receive any form of aid, make sure that you understand what acceptance means for your college career and your financial future.
How Do I Know I Have Qualified for Aid?
After you’ve completed your FAFSA, you may be able to get a sneak peak insight into what type of aid you qualify for. In some cases, depending on the information you have provided, the FAFSA may be able to give you an estimate projection of what type of loans, grants, and work-study programs you are likely to qualify for1. Please keep in mind that this is only an estimate that the FAFSA calculates quickly and it may not reflect the actual loans you receive in the end. However, it may serve as a baseline tool when you begin picking out classes for the semester.
Either way, the FAFSA sends your loan information directly to your school after it has been processed and accepted. Your school will know exactly how much aid you qualify for and whether or not that includes grants or work-study programs. Once your school has that information, they will confirm the figures and contact you to let you know the verdict.
How Do I Accept Aid & How Much Should I Accept?
Once some form of aid has been offered to you, you’ll likely be able to sign into your student account and accept or decline any awards. There may be different areas of your student center you need to check if you are collecting multiple types of aid. So, make sure to keep that in mind. For example, the process for accepting grants versus loans might be a little bit different. In addition, it might also differ slightly depending on which semester you applied for. Often the process will change for extended studies classes, like Summer or Winter courses. If you have any questions about this, make sure to contact your financial aid office.
As far as actually accepting a specific amount of aid, that can be a complicated situation. Grants and scholarships are an easy choice because you are not required to pay back those funds. If you are left with a balance after accepting applicable grants and scholarships, take a detailed look at your financial situation in comparison to the amount of loans being offered to you. Remember that some loans may accrue interest right away, while others have a grace period for up to 6 months after you graduate to tack on interest. This should also be used to calculate which loans fit within your long term financial plan.
Every student and family is unique. You may be required to take out more loans than you’d like just based on your housing, work, and student status. In that circumstance, it may be unavoidable to take out the full amount of your loans, but if you can help it, I recommend that you only take exactly as much as you need2. Always consider the fact that you have to pay back any student loans that you accept. Especially if you have chosen a four year college, those expenses can really add up over time.
When Do I Have to Start Paying It Back?
After you have accepted an amount of aid that you are comfortable with, you can apply that to your balance due for your current enrollments, and you’re good to go! You might be thinking at this point, “when do I have to start paying that back?” which is understandable given that you’re probably borrowing a large amount of money. Luckily, in most cases, you won’t have to start paying back any loans until after you graduate. Generally, you won’t be required to begin making payments until 6 months after you graduate3. Although, you’ll want to check with your school and/or lender to make sure. Again, situations can differ depending on where you live, what school you’re going to, and who your loan provider is.
What If I Can’t Make Payments?
Let’s say you’ve graduated or put school on hold for more than 6 months. It’s likely that your loan provider is contacting you to begin making payments. If your income isn’t quite able to cover the cost of your loans in addition to your other monthly expenses that’s okay! Contact your loan provider as soon as possible and let them know about your situation. Many organizations offer programs for those who either need a lower monthly payment or just need to put their payments on hold for a short amount of time to get their finances in order.
One thing that is absolutely crucial to keep in mind, is that fact that ignoring your payments can be detrimental to your credit. If you want to know exactly what can ruin your credit score, and fast, it is dismissing your student loans. Student loans are one of the most influential items that appear on your credit. If you decide to skip your payments, you could be in a pretty negative situation when you decide to make a large purchase in the future that requires positive credit. On the flip side, making your minimum payment each month on time will positively affect your credit and can help you when making those big decisions later on.
Making the decision to accept financial aid is no joke. Although you may not have to start making payments on your loans until you graduate, you will have to pay back the money at some time. This means, it’s better to be frugal about the amount of financial aid you take advantage of. In some instances it might be necessary to take aid for housing and meal plans, but if possible keeping loans tied to tuition fees and books will make your life much easier down the line. In addition, you need to be aware of deadlines and what is expected after you accept your funding. Accepting funding means you have to pay it back, even if you end up dropping or changing a class or if you end up receiving another type of aid.
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Trisha is a writer and blogger from Boise, ID. She is a dedicated vegan, an avid gamer, cat lover, and amateur SFX artist.
This post was updated April 20, 2017. It was originally published April 22, 2017.