How to Pay for College: What is in a Financial Aid Package?

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In March or April, sometimes earlier, you will receive a financial aid package from each college you indicated on the FAFSA. A financial aid letter will consist of scholarships, loans, grants, and work study. Some colleges will meet your full need and others will not meet your full need.

Let’s take a look at the financial aid awards of three fictitious families to determine how families with varying needs are awarded financial aid. In the examples that follow, note how grants, scholarships, loans, and work study are combined to form a total financial aid package.

Examples of Financial Aid Packages

Student A

Student A is applying to an in-state public university.

Cost of attendance (annual costs)          $15,000

EFC as determined by the FAFSA    _        $7,000

Need (COA – EFC)                                       $8,000

Financial aid package for Student A:

State grant                                                $1,000

Private scholarships                                $2,000

Academic competitive grant                      $750

Grant from public university                      $2,000

Unsubsidized federal Stafford loan         $2,000

Unmet Need                                                   $250

Analysis: Student A received $5,750 in grants and scholarships, which do not need to be paid back. Student A’s parents will have to contribute $7,250 towards the COA, $7,000 of which is the EFC and $250 of which is unmet need. However, the rest of the financial aid package consists of $2,000 in loans, which will have to be paid by the student.

Student B

Student B is applying to a private university.

Cost of attendance (annual costs)          $45,000

EFC as determined by the FAFSA            $7,000

Need (COA – EFC)                                    $38,000

Financial aid package for Student B:

Federal Pell Grant                                      $4,000

Federal work study                                     $2,500

State grants                                                 $3,000

Private university grant                            $15,000

Private scholarships                                $10,000

Subsidized Stafford loan                           $3,500

Unmet Need                                                    $0

Analysis: Student B received $32,000 in grants and scholarships which do not need to be paid back. Student B will be offered a part-time job on campus, from which the student will earn $2,500. Student B will be expected to pay back $3,500 in low-interest loans. Student B’s parents are expected to pay $7,000 towards the COA.