RECEIVE

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Your Award Letter

The schools you included in your FAFSA receive the results of your application. The financial aid office at the school considers the cost to attend their institution and the information in the FAFSA to put together an award package for you.

The award letter will include federal student loan, grant, and work-study you can receive as well as state aid, institutional aid, and other sources of aid to help pay your costs.

Review the financial aid award letter you receive from each school.

Once admitted, the school will send you the financial aid award letter that lists the grants, scholarships, work-study, and loans for which you're eligible.

• Aid is based on the school's cost of attendance (all direct and indirect expenses, including tuition, fees, room and board, books, transportation, and supplies) minus the EFC.*



• Award letters are unique to each school and vary in the amount of information included.

Some schools might include optional private loans in Your Award Letter Before you accept any loans, make sure you:

• understand the source of your loan (government or private) and



• understand the terms of the loan.

Every award package is individually tailored. If you have any questions or don't understand what's in your award letter, contact the school. The school will also tell you what actions you need to take after you review Your Award Letter Always ask questions. Be an informed borrower. Know what you're receiving and what the terms of repayment are.

What should I consider?

When you receive your award letter, start by:

• Accepting scholarships and grants you're eligible for—be sure you understand any conditions and requirements you must meet to receive these free funds.



• Accepting the loans with the most favorable terms; that is, federal student loans and state aid offered to you. If you see private or commercial loans in your award letter, ask why this type of loan was included, find out the terms, and reject the private loan if the terms aren't favorable.



• Borrowing only what you need and what you'll be able to repay. Remember that federal student loans have to be paid after you graduate, leave school, or stop attending at least half-time.*



• Exhausting all options before looking into private loans. Private loans and credit cards should be your last resort.

Before you accept any aid: Get a breakdown of the direct expenses (tuition, room, board, and fees) and estimates of indirect expenses (travel, books, etc.) for one year of college; Know the actual amount (cost of attendance* minus financial aid) that you'll have to pay to attend one year of college; Know how much in scholarships and grants (money that doesn't have to be repaid) you've been awarded and the conditions under which they are renewable each year; Know the amount of work-study you've been awarded and the conditions to fulfill the work-study; Find out which types of loans* you've been awarded and the amounts; Find out which loans your parents can get to help pay for your education; Know the interest rates,* loan terms, monthly repayment amounts, and total repayment amounts of your loans; and Know where you can get additional information or have your loan questions answered.

NOTE: Your award letter or financial aid package doesn't transfer with you if you go to another school. Contact the financial aid office at your new school as early as possible to find out what to do.

What should I do now?

• Sign a promissory note.* The promissory note is a legally binding agreementv that contains the terms andvconditions of the loan. It explains how and when the loan should be repaid. By signing it, you are promisingvto repay your student loan. Keep the promissory note and any other loan documentsvin a safe place untilvthe loan is repaid.



• Complete entrance counseling. This is a must before the loan is disbursed and required for first-timevborrowers. Entrance counseling is an informationvsession explaining your responsibilities and rightsvas a student borrower.

Loans add up! Remember that loans accumulate over the two, four, five years or more that you will attend school. You should know the full estimated cost of attendance for the total number of years you plan to attend school. This will give you an idea of the total cost of the federal student loans you may be taking out. See estimated monthly payment amounts for different repayment plans in Figure 4.

How and when do I receive the money from my federal student loans?

• Generally, your loan will be paid directly to the school in two disbursements* (payments). No disbursement will be greater than half the amount of your loan.



• If you're a first-year undergraduate student and a first-time borrower, your first disbursement can't be made until 30 days after the first day of your enrollment period.



• Your school usually credits your loan payment to school charges on your account (tuition and fees, room and board, and other authorized charges).



• If the loan money exceeds your school charges, the school will pay you the credit balance by check or other means.

For more information on disbursement* dates, check with your school's financial aid office.

What can I use my federal student loan money for?

You may use the money you receive only to pay for education expenses at the school that awarded your loan. Education expenses include school charges such as tuition; room and board; fees; books; supplies; equipment; dependent childcare expenses; transportation; and rental or purchase of a personal computer. Talk to someone at the financial aid office at your school if you need more details.

I don't need to borrow all this money. Can I return some of it?

Yes. You may cancel all or part of your loan at any time by notifying your school before your loan is disbursed, and within certain timeframes after your loan has been disbursed. These timeframes, and the procedures for canceling a loan, will also be explained in notices that the school is required to send you. Contact your financial aid office for more details.

Always consider what you'll have to repay Repayment of student loans should be only a small percentage of your salary after you graduate. If you expect to pay more than 15 percent of your annual salary for student loans, you might have difficulty making your monthly payments. Ask your school's financial aid office for starting salaries of recent graduates in your field of study to get an idea of how much you are likely to earn after you graduate. Estimates of salaries for different careers are available in the Occupational Outlook Handbook at www.bls.gov/oco. You also should research employment opportunities advertised in the area where you plan to live.

What if I still need more money? Where should I look?

Try these free sources of information:

• other federal agencies: www.students.gov



• your state education agency



• a college or career school financial aid office



• a high school or TRIO counselor



• your library's reference section



• FREE online scholarship searches



• foundations, religious or community organizations, local businesses, or civic groups



• organizations (including professional associations) related to your field of interest



• ethnicity-based organizations (for example, www.chci.org for Hispanic students; www.cbcfinc.org for African-American students; http://honda.house.gov/capac for Asian-American students)



• your employer or your parents' employers

ALERT: Some companies may offer to search for money for college for a fee. You don't need to pay for help to find money for college and you shouldn't share your personal information with anyone. For more information on how to avoid fraud and identity theft, visit www.studentaid.ed.gov/LSA.