It’s the last part of the college process. Your student applied for admission and was accepted, you both completed and submitted a Free Application for Federal Student Aid, or FAFSA, and you received and accepted a financial aid offer that should be very helpful in covering the costs of college attendance. Now the college is asking for a payment to secure your child’s place in the freshman class, and you are wondering just how you will receive that financial aid. Financial aid is disbursed in a number of ways depending on the type of assistance your student is receiving:
• Grants: Grants are typically applied by the college to the cost of attendance, so you won’t necessarily see a check coming directly to you. Either the college is accessing its own private grants or has received grant money from the government, which it will then apply to the appropriate student accounts. If you are eligible to receive Federal Pell Grants, check with the financial aid office to determine how you will receive money to purchase textbooks.
• Scholarships: How you receive scholarship money depends on the type of scholarship. If the scholarship comes from the college, it may be applied directly to your account. If it is a private scholarship, it may come to you or get sent directly to the college.
• Student Loans: Funds for federal student loans are first distributed to the college itself. These amounts are applied directly to the student’s account to cover any balance remaining after grants and scholarships have been taken into consideration. First-time borrowers may be required to complete entrance counseling before the funds are disbursed, so make sure to look for this notification and complete this requirement. Any remaining balance is then sent to the student or parent, depending on the type of loan. First-time borrowers may have to wait up to thirty days to receive this money. Private student loans, on the other hand, may be distributed directly to the student or the school. If you need to utilize private student loans, make sure you allow plenty of time so that the funds will get to the college by the tuition deadline.
• Work-study: If you participate in a federal work-study program, you will be paid directly by the college once a month for any work you have performed.
Check your college’s website to find out if they provide a more detailed breakdown of financial aid payments. It is imperative that you find out how and when money will be received so that you can plan accordingly.
Have more financial aid questions? My book, Secrets of a Financial Aid Pro, is now available. It takes you through the types of college financial aid, shows you how to use federal and private student loans, and answers questions about how to talk to children of any age about money. Order it now, no matter how old your child is, and get the money discussion started with your student.