You’ll need to tell your college or career school which financial aid you’d like to accept.

Start by accepting the financial aid funds you don’t have to pay back.

Accepting Aid

When your school financial aid office sends you an award letter, they’ll ask you to indicate which financial aid you want. Look carefully at your options and make an informed decision. 

I’ve got an award letter from my school. Which financial aid is the best to accept?
I will need to borrow some money. How do I decide which student loans to accept?
Is it okay to accept less loan money than the school offered?
How do I tell the school what aid I’m accepting?
How and when will I get my financial aid?


I’ve got an award letter from my school. Which financial aid is the best to accept?

The rule is: free money first (scholarships and grants), then earned money (work-study), then borrowed money (federal student loans). Start from the top of this table and work your way down: 

Order in Which to Accept Aid

Type of Aid

What to Keep in Mind

1

Scholarships and grants

Make sure you understand the conditions you must meet (for instance, you might have to maintain a certain grade-point average in order to continue receiving a scholarship, or your TEACH Grant might turn into a loan if you don’t teach for a certain number of years under specific circumstances).

2

Work-study

You don’t have to pay the money back, but you do have to work for it, so take into account that that’ll mean less time for studying. However, research has shown that students who work part-time jobs manage their time better than those who don’t!

3

Federal student loans

 

You’ll have to repay the money with interest. Subsidized loans don’t start accruing (accumulating) interest until you leave school, so accept a subsidized loan before an unsubsidized loan.

4

Loans from your state government or your college

You’ll have to repay the money with interest, and the terms of the loan might not be as good as those of a federal student loan. Be sure to read all the fine print before you borrow.

5

Private loans

You’ll have to repay the money with interest, and the terms and conditions of the loan almost certainly will not be as good as those of a federal student loan.

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I will need to borrow some money. How do I decide which student loans to accept?

Accept the loans with the most favorable terms and conditions; usually, that means federal student loans and state aid offered to you. If you are considering getting a private or commercial student loan, first you should learn about the differences between federal and private loans.

If you have any questions or don’t understand what types of loans are in your award letter, contact the school. Always ask questions and be an informed borrower. Make sure you understand what you’re receiving and the repayment terms.

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Is it okay to accept less loan money than the school offered?

Sure! You should borrow only what you need. If your living expenses are not going to be as high as the amount estimated by your school, you have the right to turn down the loan or to request a lower loan amount. In the award letter, the school will tell you how to do this. 

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Manage your money by listing your college expenses and the resources you’ll have available to pay them: make a budget.


How do I tell the school what aid I’m accepting?

Read and follow the directions in the award letter. You might have to enter the amounts you’re accepting in an online form and then submit the form. If you receive a paper award letter, you might have to sign it and mail it back to the school.

Accepting a loan listed in the award letter involves some additional steps, which vary depending on the type of loan you’re receiving. Saying yes may be as simple as signing a promissory note—a contract between you and the lender that specifies terms and conditions of the loan. (If you take out a loan from the Direct Loan Program, the U.S. Department of Education will be your lender.) By signing the promissory note, you are promising to repay your student loan. The financial aid office will guide you through the paperwork or direct you to www.studentloans.gov to sign the online Master Promissory Note.

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How and when will I get my financial aid?

Every school is a little different, so ask your school’s financial aid staff what to expect. Meanwhile, read about receiving aid for some general information. 

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