Grants and scholarships are the best ways to pay for college because you don’t have to repay them. But if you chose a college because it offered you the most free money, your final bill may end up bigger than you thought.
More than 72 percent of college students ages 18 and younger received scholarships, grants or other free money in 2015-16, according to the latest data from the National Center for Education Statistics. For students ages 19 to 23, that percentage is less than 65 percent.
Here are some reasons your free money may disappear after freshman year and how you can prepare.
SOME SCHOLARSHIPS AREN’T RENEWABLE
All of the scholarships listed on your financial aid award letter may not be available to you next year.
For example, some schools award incoming freshmen a one-time scholarship for visiting the college’s campus or interviewing with the school, said Tori Berube, vice president of college planning and community engagement at The NHHEAF Network Organizations, a nonprofit agency in Concord, N.H.
Other scholarships are renewable if you meet specific requirements.
Review your scholarships to see which are renewable, and make sure you meet their terms. You should be able to find this information in your award letter, on the school’s website or by calling the financial aid office.
SITUATIONS CHANGE
Typically, schools aspire to maintain overall awards from year to year, said Stacey MacPhetres, senior director of college finance for College Coach, an educational adviser located in Watertown, Mass. But the types of financial aid within that award may change.
For example, students have higher federal student loan limits after their first year in school. To account for this, a college could replace a grant with a loan of an equal amount for your sophomore year.
Other changes to your financial circumstances could lead to you losing aid altogether. For example, say your older sibling graduates or moves out of your parents’ house while you are enrolled. The financial aid calculation now sees your family as having more available income, which increases the amount you’re expected to pay out of pocket.
When you submit the Free Application for Federal Student Aid, or FAFSA, be aware of changes to your income. If these are one-time events — like your parent taking a stock or a retirement distribution — MacPhetres said you should ask the financial aid office to treat this money as an asset, instead of income. Assets have a smaller impact on your ability to receive financial aid.
TUITION AND FEES INCREASE
Even if you receive the same amount of aid year after year, it may feel like less because your college’s costs increased. On average, tuition and fees have risen roughly 3 percent annually over the past 10 years, based on data from the College Board.
To help predict future tuition and fee increases at your own school, look it up on the College Navigator website.
