Breaking Down Your Financial Aid Award

There’s a LOT to think about when you’re going off to college, ranging from the fun things, like how you’ll decorate your residence hall room and who your roommate will be, to the more administrative tasks, like setting up meal plans and figuring out financial aid. If you’re feeling overwhelmed, here’s some good news: There are people ready to help you with every single step along the way, whether it’s your family, friends, counselor, or university staff.

In that spirit, this article will help you break down your financial aid award so you can make an informed decision about your future.

What Is the Student Aid Index and Why Does it Matter?

First, you need to know that your financial aid is calculated based on the information you submitted through your Free Application for Federal Student Aid (FAFSA). The FAFSA will give you a Student Aid Index (SAI) number. In the 2024-2025 academic year, SAI replaced the Expected Family Contribution, and it’s designed to help colleges determine your eligibility for need-based financial aid.

The SAI number measures your family’s financial position and influences your overall financial aid package. It’s calculated based on income, assets, family size, and the number of family members currently in college. If your SAI is lower, you’re more likely to receive more need-based aid, like unsubsidized loans, work-study, grants, or scholarships. If your SAI is higher, then you’ll know that you’ll probably need to cover some of your costs through other means, like savings, loans, or payment plans (like Florida Pre-Paid).

What is a Financial Aid Offer and When Will I Get It?

A financial aid offer is a letter that will come either electronically or via the mail. You’ll receive one from each university that accepted you. Each will list the amounts and types of financial aid you’ll receive. Typically, these letters are released in the spring around March or April.

What's In Your Financial Aid Offer

Each offer you get will include an estimated cost of attendance (don’t worry, it’s not a bill) as well as the total amount of financial aid you’ll receive from that school. Depending on your qualifications, your financial aid offer will include things such as:

• Grants
• Work-Study
• Loans
• Scholarships

It’s important to note that this money will not be given to you directly. Instead, it will be applied toward your cost of attendance, reducing the total amount you owe the school. Read your offer and any attached documents carefully so you don’t miss any important information, said Traci Armes, assistant vice president of financial aid at the University of South Florida.

“If they do not understand or have questions, they should contact the financial aid office to have their questions answered. Students should also understand whether the aid they have been offered is a one-time award or if it is renewable,” Armes said.

What Are Grants and Who Receives Them?

Federal student grants are financial aid packages provided by the federal government of the United States to help students pay for costs associated with college. Unlike loans, grants do not need to be repaid as long as you meet certain conditions. Here are some of the most common federal student grants:

• Pell Grant: The most well-known federal grant, awarded primarily to undergraduate students who have not yet earned a professional degree. The amount awarded is based on financial need, cost of attendance, and enrollment status (full-time or part-time).
• Federal Supplemental Educational Opportunity Grant (FSEOG): This grant is for undergraduate students with exceptional financial need. Not all schools participate in this program, and funds are limited, meaning they are distributed on a first-come, first-served basis.
• TEACH Grant (Teacher Education Assistance for College and Higher Education Grant): The TEACH grant is awarded to students who agree to teach in a high-need field at an elementary or secondary school serving low-income families. Recipients must complete four years of teaching within eight years of graduating; otherwise, the grant converts to a loan that needs to be repaid.
• Iraq and Afghanistan Service Grant: This grant is available to students whose parent or guardian died as a result of military service in Iraq or Afghanistan after the September 11, 2001 terrorist attacks, and who are not eligible for a Pell Grant.

What Is Work-Study?

The Federal Work-Study Program is a form of financial aid offered to college students. It provides part-time jobs for undergraduate and graduate students with financial need and allows them to earn money to help pay for educational expenses.

Eligibility for the Federal Work-Study Program is determined through the FAFSA. Financial need is a primary criterion, meaning the program is geared toward students whose families cannot cover the full cost of attending college.

The program offers part-time employment opportunities both on and off campus. On-campus jobs are typically with the institution itself, while off-campus jobs are often with nonprofit organizations or public agencies. These jobs are designed to complement and enhance a student’s academic and career goals.

Once you accept your work-study award, you can usually explore available positions through your school’s financial aid office or career services office. Participation in the program not only helps cover costs but also provides practical work experience, which can be beneficial for future job prospects.

What Are the Different Types of Loans?

Federal student loans help students pay for their post-secondary education. These loans typically have lower interest rates and more flexible repayment options compared to private loans. The main types of federal student loans include:

• Direct Subsidized Loans: Available to undergraduate students with demonstrated financial need. The government pays the interest while the student is in school at least half-time, during the grace period (the first six months after leaving school), and during deferment periods. This helps prevent the loan balance from increasing while the student is in school.
• Direct Unsubsidized Loans: Available to both undergraduate and graduate students, and financial need is not a requirement. Unlike subsidized loans, interest accrues while the student is in school and during grace and deferment periods. Students can choose to pay the interest as it accrues or allow it to be capitalized (added to the principal balance) upon entering repayment.
• Direct PLUS Loans: Available to graduate or professional students and parents of dependent undergraduate students. Interest accumulates while the student is in school, and borrowers are responsible for all interest costs.

It’s important that you understand the terms and conditions of each loan type, including interest rates and repayment plans, as well as your eligibility for deferment, forbearance, and forgiveness programs. Only borrow what is necessary to avoid excessive debt after graduation.

How Did I Qualify for University Scholarships?

Qualifying for university-specific scholarships can vary significantly from one institution to another because each university sets its own criteria and application process. Many university-specific scholarships are merit-based, so if you’ve maintained a strong GPA and had high standardized test scores, your scholarship eligibility could be tied to that. Other scholarships are need-based, meaning they are awarded based on your financial situation. Some scholarships are tailored to students from specific backgrounds or demographic groups, or who are pursuing particular fields of study. If you qualified for a scholarship, congrats! It’s a gift that helps reduce your overall cost of attendance.

Explaining the Estimated Cost of Attendance

The estimated cost of attendance includes your direct costs (paid directly to your university), like housing, meal plan, and tuition and fees.

Be prepared for additional, indirect costs, including fuel, school supplies, a computer, textbooks, and more. Hopefully, each university you’ve been accepted to will include these in your cost of attendance as well to help you plan.

Keep in mind, your financial aid may not cover the entire cost of attending school. You should receive a College Financing Plan letter along with your award offer. This is a template from the U.S. Department of Education that each university uses to display costs to students and families.

“Since the template is standard, it will look the same regardless of the school to make financial planning and decision making easier for students and families,” Armes said. “When comparing aid offers from multiple schools, students should look at the bottom-line costs. The school that offers the most money may or may not be the better deal.” 

What Do I Do Next?

Carefully assess each component of your award letter, including the terms and conditions of any loans. Since you’ll be responsible for paying those back, you should know exactly what you’re agreeing to. Once you decide which forms of student aid you’ll accept, follow the directions on your offer letter for accepting. Some schools may ask you to reach out to the financial aid office, while others (like USF) allow you to accept via your student portal.

If you still have gaps and need additional funds to cover the rest of your costs, consider other options. Seek a part-time job or widen your scholarship search. You could also take out private student loans, but thoroughly assess the pros and cons before going that route.

Finally, make sure you don’t have any unsatisfied requirements on your account. This could include a missing form, transcript, or something else. If you have unsatisfied requirements, your financial aid may not disburse in a timely manner.

I Still Have Questions!

If you’re still confused about your financial aid offer or have questions about part of it, the USF Office of Financial Aid is here to help. Call (813) 974-4700 or check the financial aid website for answers!