How to Navigate that Financial Aid Offer

Stephanie Haynes
Mar 31
3 min read

Your teen has been accepted to college! Congratulations! Now how do you make sense of the financial packages each school is offering?

How to navigate that financial aid offer

Congratulations! Your teen has been accepted to college! Now comes the next big step—figuring out how to pay for it. If you’re feeling overwhelmed by financial aid offers filled with grants, loans, and scholarships, you’re not alone. This process can be confusing, but with a clear strategy, you can make an informed decision that fits your family’s financial situation.

Step 1: Understand the Types of Financial Aid

Before making any decisions, it’s important to break down the types of financial aid your teen has been offered:

Grants – Free money, usually need-based, that does not need to be repaid. Examples include the Pell Grant (up to $7,395 for 2024-25) and state grants.
Scholarships – Free money awarded based on merit, talents, background, or other criteria. Some scholarships are renewable, while others are one-time awards.
Loans – Borrowed money that must be repaid. Federal student loans may be subsidized (no interest accrues while in school) or unsubsidized (interest accrues immediately).
Work-Study – A federal program that provides part-time jobs for students with financial need, helping them earn money to pay for college expenses.

For more information on available grants and scholarships, check out Debt.org.

Step 2: Calculate Your Out-of-Pocket Costs

Once you understand what’s being offered, calculate how much you and your teen will need to contribute. Use this formula:

Total Cost of Attendance (COA) - Total Financial Aid = Out-of-Pocket Costs

Break it down like this:

Total Financial Aid (A): Add up all grants, scholarships, and work-study opportunities per year.
Total Tuition and Fees (B): Look at your teen’s financial aid offer for this number.
Room and Board (C): If your teen is living on campus, include these costs.
Other Expenses (D): Include books, transportation, and personal expenses.

Example Calculation:

Financial Aid: $20,000/year x 4 years = $80,000
Tuition & Fees: $30,000/year x 4 years = $120,000
Room & Board: $10,000/year x 4 years = $40,000
Total Cost: $120,000 + $40,000 = $160,000
Out-of-Pocket: $160,000 - $80,000 = $80,000 to be covered by savings, income, or loans.

Step 3: Compare Offers from Multiple Schools

If your teen has multiple offers, use the same calculation for each school. Some schools may offer lower tuition but less aid, while others may have a higher sticker price but better financial assistance. Compare net costs, not just tuition.

Step 4: Consider Student Loans Carefully

If loans are part of your teen’s financial aid package, consider:

Federal vs. Private Loans: Federal loans typically offer lower interest rates and better repayment options than private loans.
Repayment Terms: Federal student loan repayment begins 6 months after graduation. Estimate monthly payments using the Federal Student Aid Loan Simulator.
Parent PLUS Loans: Parents can borrow to cover remaining costs but should be aware of higher interest rates and credit requirements.

Step 5: Maximize Scholarships and Other Funding Sources

Scholarships aren’t just for top students! Encourage your teen to apply for multiple opportunities, including:

Academic & Merit-Based Scholarships (offered by colleges, organizations, and private foundations)
Unusual Scholarships (e.g., left-handed students, tall people, vegetarians!)
Diversity Scholarships (for women, minorities, and first-generation students)
Industry-Specific Scholarships (STEM, healthcare, business, and more)

Great scholarship search resources:

Final Thoughts

The financial aid process can feel overwhelming, but by breaking it down into clear steps, you can confidently guide your teen toward a financially responsible college decision. Be sure to compare financial aid offers, understand repayment obligations, and explore scholarships and grants to reduce out-of-pocket costs.

Need More Support? If you want additional guidance on navigating financial aid and post-high school planning, grab a copy of my book, College Is NOT Mandatory: A Parent’s Guide to Navigating the Options Available to Our Kids After High School!

I’m here to help you and your teen make the best decisions for their future—without unnecessary financial stress!