February 2025

Tuesday Tips

Comparing Financial Aid Offers and Paying the Remaining Balance

1. Understand the Different Types of Aid

Many financial aid offers include three types of aid: gift aid, federal student loans, and work-study. Gift aid which includes scholarships, grants, and waivers, are funds that don’t need to be repaid. You’re hoping to see a lot of these funds on your offer! Federal student loans are funds that will need to be repaid with interest once you finish school. Work-study funds, unlike gift aid and loans, are not applied to your bill but instead represent money you’ll earn by working in a part-time job. You’ll receive your earnings in a paycheck and can use this money for items like laundry, gas, and other day-to-day expenses.

2. Focus on the Net Cost

Focus on the net cost at each school. The net cost reflects the school’s direct or billable costs (tuition, fees, housing, and food), minus any gift aid you receive. It’s an estimate of the amount the school will cost you, out of pocket for one school year, before loans. To help you determine and compare the net cost of the schools you’ve received offers from use FAME’s Comparing Cost and Financial Aid Offers Worksheet. Keep in mind there will be other expenses not billed by the school like books, supplies, travel, and miscellaneous expenses. Schools typically provide an estimate of these indirect expenses, but they may be higher or lower depending on your circumstances. 

3. Know the Terms of the Aid You're Accepting

The aid you are being offered is based on certain assumptions. Are the assumptions about where you’ll be living (on or off campus) or your level of enrollment (full or part-time) correct? If those assumptions are not correct, contact the financial aid office to discuss the impact on the aid you were offered. Additionally, some types of aid, like merit scholarships, might be renewable but will require you to earn certain grades or remain enrolled full-time. Knowing the terms of the aid you are offered can help you determine what aid you can rely on for the upcoming year and beyond. 

4. Need More Free Money?

It’s not uncommon for there to be a balance after your financial aid offer. A great way to pay some of the balance is through “outside” scholarships, provided by other organizations outside the colleges you’re considering. It can take some time and energy to locate and apply for these scholarships, but for the potential of free money and getting the bill paid, it’s worth it. FAME has some great resources to help you research scholarship opportunities on FAME’s scholarship search webpage. Remember to apply for scholarships every year to help keep costs down and get the bill paid. 

5. Additional Ways to Pay the Bill

Other ways to pay the remaining balance include savings, tuition payment plans, and loans.

• Savings, whether already set aside or to be earned in the coming months, can make a huge difference as every dollar of savings is one less you have to borrow and pay back with interest.
• Another great option is a tuition payment plan, offered through most schools. These plans allow you to pay some or all the balance over a period of months, interest-free (though there may be a small enrollment fee).
•  Private loans may be an option for some families. These loans, unlike the subsidized and/or unsubsidized student loans that are often part of the financial aid offer, are credit-based, and typically require the student to have a credit-worthy co-borrower. If borrowing, consider the return on investment and the amount of debt that is reasonable. Use FAME’s Student Loan/Salary Calculator to get a sense of how much borrowing is manageable based on potential earnings.

If you would like someone from FAME to help you review your financial aid offers, sign up for one of our Financial Aid Coaching sessions at FAMEmaine.com. New appointment times are added to the schedule frequently. You can also call us at 800-228-3734 or email Education@FAMEmaine.com for more information.

Check out FAME's previous Tips and Webinars

Wednesday Webinar | Comparing Aid Offers | February 2025

Financial aid offers are starting to arrive! The next step is to understand and compare these offers. It’s important to have a sense of the true cost for each school before making the final school selection. Check out the webinar to learn more.

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