What does a school’s financial aid office do?
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The role of a financial aid office is to assist students and their families by providing information on ways to pay for education. They are also involved in giving out financial aid.
If you need assistance in paying for your college education, reach out to the financial aid office at the same time as the admissions office. Many schools will try and provide you with an estimated financial aid award so you can make an informed enrollment decision.
Additionally, you can typically go to the financial aid office to:
- Learn about federal, state, and private student aid options, including aid programs for that specific school
- Find out about deadlines for student aid applications
- Obtain forms and money management guidance
- Have your financial aid and any loan applications you submit processed and awarded
Financial aid options: Federal student loans
In order to receive federal grant aid or borrow federal student loans, you (or your family) must fill out a Free Application for Federal Student Aid (FAFSA) . Your school’s financial aid office will receive your FAFSA information from the U.S. Department of Education, and then they will tell you the type of aid you are awarded and other options. This is generally referred to as your “financial aid offer package.” Your package may include grants and scholarships, work-study, and loans. Your financial aid office will review your student loan application and add your loan funds to your account. It’s a good idea to seek out grants, scholarships, and other money you don’t have to pay back before taking out loans.
Financial aid options: Private student loans
If you choose to take out a private student loan in order to pay for college, your college financial aid office may provide you with a list of possible lenders. Remember, you have the right to shop around for a private student loan that will give you the best rate. There may be other loans or products available to you that are not on the list provided by your financial aid office. For example, your local bank or credit union may offer a loan with a lower interest rate or more favorable terms. In most situations, your financial aid office may need to confirm that you’re enrolled in the school in order for you to get a private student loan.
Other offerings
Some financial aid offices, as well as financial institutions and non-profits, may offer a product called an income share agreement (ISA). An ISA is a private education loan where you promise to make future payments based on a percentage of your income. This means that the higher your salary, the higher your ISA payment. Payment is complete once you have repaid a set amount, or you reached a maximum number of payments. Because an ISA may pose unique risks to borrowers and can often cost more over the life of the loan than traditional student loan products, it is best to max out your federal student loans (if available) and other options—such as scholarships and grants—before you enter into an ISA. If you’re considering taking on more than one ISA, keep in mind that the percentage of your income you agree to pay will be different for each contract, so you are committing an additional percentage of your income with each new agreement. Further, if you already have student loan obligations you will be required to pay those in addition to paying a percentage of your income under the terms of your ISA contract, which may lead to excessive debt. Be sure to read the terms and conditions carefully and fully understand them before opting for an ISA. ISAs are generally subject to federal consumer financial laws.