Prospective college students who have filled out their applications for federal student aid (the application known as the FAFSA) should now be receiving information about their financial aid packages for the upcoming school year.

College financial aid packages usually contain a combination of scholarships, grants, and student loans. Some student aid awards include federal work-study dollars. Alongside award amounts, financial aid letters also let students know how much money they or their families will be expected to kick in.

If you’ve started receiving your student aid offers and haven’t yet decided which college or university to attend, below are a few things to look out for. Knowing how to evaluate your financial aid package can help you judge the level of financial risk and potential long-term debt burden associated with attending a particular school.

A key point to remember is that your financial aid package will be recalculated every year that you’re in school, based on the information you provide on your annual FAFSA, and your aid amounts can vary from year to year. A generous award package offered for your first year in college may entice you to choose one school over another, but that aid may fall off significantly in subsequent years, leaving you with a larger college bill than you expected.

Scholarships & Grants

Scholarships and grants are awards that, unlike college loans, won’t put you in debt or need to be repaid. However, you should still scrutinize these awards carefully. Certain grants and scholarships may be one-time awards rather than renewable awards, which will leave you looking for replacement cash each of the next years.

If your award package contains scholarships and grants, contact the school’s financial aid office to verify (1) whether those awards are renewable and (2) any qualifications you’ll need to meet in order to renew the awards.

Need-based grants and scholarships will require you to demonstrate a certain level of financial need. Academic scholarships may require you to take a maintain a certain grade-point average, take a certain number of credit hours, or demonstrate other markers of satisfactory academic progress.

Keep in mind that government-funded grants and scholarships may be vulnerable to funding cuts at the state or federal level —like the recent $300 million in funding cutbacks made to Georgia’s HOPE Scholarship program, which will now provide only partial college scholarships rather than the full scholarships it awarded before.

Education cuts loom in multiple states, as states continue to struggle with budget deficits that ballooned during the recession. An unexpected government budget cut could leave you without a significant source of grant aid on short notice.


Work-study aid is federally sponsored student aid that provides part-time jobs for college and graduate students, allowing you to earn money to help pay for school.

But work-study positions aren’t guaranteed. Work-study jobs tend to fill up fast, and you may not be able to find a position.

It also bears repeating, although it may seem obvious, that work-study will require you to work part-time while you’re in school. You’ll have to weigh whether a work-study job will allow you to devote enough time to your classes and studies.

Note that work-study funds are paid out over the course of the school year, as work-study paychecks, rather than in one lump sum at the beginning of the year, the way that grants and student loans are. Unlike other types of student aid, your work-study award money isn’t available to you until you’ve earned it.

You’re not obligated to accept a work-study award — you can accept or reject any part of your college aid package — but then you’ll be responsible for making up that financial aid money elsewhere.

Student Loans

Federal student loans come with maximum borrowing limits that vary based on your year in school and whether you’re financially dependent on your parents. As a first-year dependent college student, you’re limited to $5,500 in federal undergraduate loans.

In your second year, your borrowing limit goes up, but only by $1,000. For all years after that, your borrowing limit goes up only another $1,000. So the most money available to you in a federal undergraduate loan will be $7,500 a year as a dependent student in your third and fourth years of college.

Evaluate your cost of attendance carefully, and determine whether those maximum federal loan amounts will allow you to cover your college bills. If not, you may find yourself having to hunt down other school loans like parent loans or non-federal private student loans, which tend to be pricier than federal undergraduate loans and which can saddle you with so much debt that you’ll be struggling to make your minimum payments on an entry-level salary after your graduate.


scholarships for students, student loans, work-study

Author's Bio: 

Jeff Mictabor is an enthusiast on the topic of student loan issues in the news. He has been writing for the past 10 years for a variety of education publications. He now offers his writing services on a freelance basis.