“All my choices offered financial aid. But some were scholarships and some were loans.”

College Money Matters Responds

You were smart to take the time to really understand what you were being offered. It also points to a very important lesson: Not all financial aid is free money. In fact, much of it is in the form of loans that you have to pay back.

To make sure you know how much money you’re actually getting, you can do the following:

1. Separate the offers in your aid package into two categories: 1) Grants and scholarships and 2) Loans.
2. Be sure you know how many years of college that each grant or scholarship covers. If it is not clear that an offer is for all 4 years, confirm the number of years with the school.
3. Note: For Pell Grants, and many other grants and scholarships, you must maintain a certain grade point average. Also, improvements in family income might cause the amount awarded to be reduced.

For a good insight into how much you could owe in student loans and what you’ll need to repay them, check out this loan estimator tool.