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  • Jason Flurry, CFP

How to understand and accept your financial aid awards in 4 easy steps


The road planning for college can be very long and tiring. The colleges know that by the time you’re ready to make a final decision, you can be pretty worn down. It’s a common feeling to want to just be done by the time you reach spring of your student’s senior year. That’s a feeling that not only parents tend to have. Students can also long for a sense of closure and have a sense of anxiety over making their final decisions.


Colleges do this process every year and they know where you are emotionally, mentally, and sometimes even physically at this stage of the process. Many colleges also under-award students and if you’re not prepared to recognize that, you could leave a substantial amount of money on the table. In fact, I was discussing this very thing with one of our private clients this week. They had received a very substantial merit award and we already knew of several other smaller awards that were coming from the state and from the college where their daughter had planned to attend. The numbers really added up so it would have been easy to miss the scholarship that wasn’t yet reported on her award. Because we were prepared and aware of what she should be getting, we realized the college had not yet reported another pretty substantial scholarship on her award letter, so I advised them to wait before making a final decision so that all of her awards would be officially accepted when she made her move.


It’s likely that they could’ve gone ahead and accepted the awards they had and that the school would have added the other part later, but make sure you have everything in place before you accept any final offers. And that leads me to the first step that you need to know about when you’re ready to accept your financial aid awards.


Step 1. The first thing you do is gather all of your awards together. You may have some of them in hard copy form from receiving them in the mail and for others you may have to log into the student portal online and retrieve them that way. Either way you need to make sure that you understand what you’ve been offered and having the ability to compare other award side-by-side helps you make sure you don’t miss anything important.


I’ve discussed in previous articles how to negotiate your financial aid awards and work your best offer like a pro. And, I also shared with you what to look for in your admission letters and what to expect in the months that followed. If you haven’t had a chance to read those posts yet, be sure and do that before you make any final college decisions. They will give you a more solid foundation to work with and help improve your perspective as you begin to make your final moves.


Step 2. The second thing you do once you’ve determined that you have the full award in place and feel confident that it leaves you only paying your fair share of the college bill is login online to the student portal and begin accepting your awards. You’ll likely find different items available and some of them will need your attention while others will not. For example, any merit scholarships or need-based grants will automatically be accepted. You don’t have to do anything else to activate those awards. The college assumes that since they’re offering you free money, or gift aid, naturally you’ll accept that as a part of the deal.


The things that do need your attention are those items that are not classified as gift aid. They fall into the category of “self-help.” That’s student loans, work-study, parent loans, and anything else that’s not a grant or scholarship. You’ll see as you go to accept those awards that they will be listed as “offered” vs. “accepted.” If it’s a student loan they’re offering, you may see a place to accept some or all of that loan. You can also completely decline it as a part of your award too.


Unless you absolutely have to, try to avoid accepting parent PLUS loans. Those terms are not nearly as favorable as student loans and they can create a real burden on your cash flows over time with very few options to get help or relief.


Compared to parent, loans student loans can be more manageable and you want to look to see if you have any subsidized student loans available to use first. If you do, you may want to accept those to spread out your cash flow needs and then have a plan to pay those off after college. There’s nothing wrong with taking loans as long as you have a game plan in place to handle them later.


Work-study is another self-help item you may see on your financial aid award. That is typically a minimum wage, on-campus job that involves a commitment of somewhere between 8 to 12 hours a week for each semester in the school year. I usually see work-study offered in conjunction with an established financial need (based on your financial aid forms), so if you don’t see a work-study option on your award, it may have been because your EFC was on the higher end for that particular school. You can contact the financial aid office to see if they can offer you one if you’re interested though. The worst they can tell you is “no.”


I usually recommend accepting any work-study offers, especially in a student’s early years. It’s a good way for students to get involved once they’re on campus, and most of the time there’s some type of split in the way the money is paid out so that some of it can go towards college expenses and some of it can be used as pocket money for the student. It’s not a high-paying job, even relative to other regular jobs you typically find available on campus, but the workload is usually very light and the requirements involved don’t interfere with the student’s ability to do well in class or be involved in activities.


Step 3. The third thing you do in this process is confirm your selection and submit your decision to the college. Make sure you’ve chosen what you intended to select and that you understand what you’re picking. If you’re happy with your decisions, go ahead and submit it to the college. They will be notified and you can expect some follow up communication from them soon.


Step 4. Finally, if you’ve decided to accept any student loans, you will get a notice that says you have to complete some loan entrance counseling. That’s perfectly normal and is not difficult to complete. There will be instructions in the email you’ll receive on how to access the counseling module online. You’ll login using your FSA ID too, so dig it back out and plan to set aside 15 to 20 minutes to complete their online tutorial when you can. You can’t really fail it, so don’t let it stress you out. Just make your way through it and submit it at the end.

While you’re on that same site, you’ll then go to complete the Master Promissory Note for whatever loans you’ve selected. The note itself is a very long document, but basically it says that you’re acknowledging that the money they are applying to your account is a loan and that you promise to repay it according to the terms and timelines they establish. If you actually read what’s in the loan counseling tutorial, you’ll understand more about what the specifics are. But either way, no funds will be released until this Master Promissory Note is signed online and submitted.


Once you’ve completed these four steps, your financial aid awards are confirmed. You may receive a confirmation indicating that they’ve received your request, but usually the next time you see anything related to financial aid is when your first bill arrives and you see those items listed as credits toward your invoice.


Remember, colleges view the free money that comes from gift aid and the self-help portions that involve loans and work-study’s both as financial aid. They will all appear as a credit on your bill and generally you can use the money for anything you’d like, not just direct school expenses. Most people do use them for school expenses, but down the road if your students plan to live off campus, you can use the money from a student loan to pay for an apartment, provide grocery money, or even by car for them to get around town and get back and forth to class. It’s all pretty flexible, but a loan is still a loan. Don’t take out more than you need and definitely have a game plan on how you can pay it off after college ends.


Finish well You can’t stand in the winter circle if you don’t finish the race and accepting these financial aid awards is usually the very last leg of your college planning journey. It can be something that has to be done every year your students are in college, but once you learn how to manage the process, it becomes easier. Those feelings of fatigue and frustration, anxiety and nerves all go away and having a great financial aid award in hand is a wonderful way to finish months or even years of work on a high note.


Follow these steps and I know you’ll have an easier time crossing your college planning finish line with confidence. If you’re reading this and maybe your student is this far along yet, save this article. In fact, subscribe to my Making College Affordable podcast and listen to all of the episodes I’ve created there at each stage of the process when you get to it. Over the years I’ve worked with over 900 colleges and universities ranging from the Ivy leagues all the way down. I know what I’ve learned can help you get better results and enjoy the process more along the way.


Good luck with your planning and if you’re ready to accept your financial aid awards, congratulations! You’ve made it and the best is yet to come.

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