5 Financial Aid Mistakes To Avoid As You Start College

Most colleges start back in the next few weeks. Showing up to campus and discovering you still owe tuition can be nerve-wracking. I worked in financial aid for six years, at UCLA for five of them, and I’d like to help you sidestep this anxiety. Here are five common mistakes that you can avoid:

1. Forgetting to accept all the aid you want to use

In most cases, you need to say you want the grants and scholarships your college has offered before it will apply them to your student account. Some colleges will allow what is known as passive acceptance; if you do nothing, they will assume that you are taking everything they have offered you. Most schools, particularly when it comes to student loans, will require you to say you want the funds offered.

When it comes to student loans, you usually have to decide if you want to accept all, some, or none some of what has been offered. If you say no to your loans, you can change your mind later. In fact, so long as you stay enrolled, you can take out your loans any time in the academic year.

If you accept all your loans and realize you don’t need them, you have up to 120 days after your loans are paid out to make adjustments to them. But remember that if the loans covered tuition or other costs, or you received money back from your school to help pay for living costs, you will need to pay that back if you reduce or cancel a loan.

2. Forgetting to complete loan documents

I would love to say, “don’t take out loans,” but the sad reality is that they are a necessity for many of us. So, if you are taking out loans, make sure they are not delayed because of missed paperwork.

Once you accept your loans through whatever student portal your school uses, there will be loan documents to complete. You will need to complete a master promissory note (MPN) for federal subsidized and unsubsidized loans. Any Parent PLUS loans require your parents to complete a separate application and their own MPN. The MPN is your promise to repay the loans and the interest on them. You also must complete entrance loan counseling. This is usually a short online course explaining what you’re taking on as a borrower.

3. Dropping a class and losing financial aid

Many new students misunderstand the interaction between the number of classes or academic credits they are taking and the amount of financial aid they receive. Most financial aid programs award different amounts to students based on how many credits they are taking. For example, if you are enrolled full-time (12 or more credits at most schools) and are eligible for a Pell Grant—available for those with financial need—you will receive a maximum of $6,895 for the year based on your expected family contribution from your FAFSA. This will usually be divided across your two semesters. If you are only taking 6 credits, you will get a maximum of $3,448.

Colleges have what is called a census date, where they check how many classes and the total credits every student is enrolled in. This date is usually a few weeks into the semester. You could lose financial aid if, for example, you have dropped a class and are only enrolled in 9 credits when that date rolls around. If you already received money to help pay for living expenses, you might have to pay some of that money back to your school. It is best to figure out when this date is and make sure you are enrolled in the number of credits you need so you don’t accidentally lose aid for the semester.

4. Losing a scholarship because your GPA dropped

You worked hard to get a scholarship, right? Well, you will probably have to keep working hard for it. Most scholarships have a minimum GPA to maintain to keep the scholarship. If your GPA goes below that level, you could lose those funds. Make sure you know where you need to keep your GPA to keep your scholarships. If something unexpected happens, like a family emergency or health crisis, and it means your GPA drops, talk to your financial aid office and see if you can submit an appeal to keep the award.

5. Figuring out what your financial aid refund will pay for

Financial aid rarely provides enough money to cover all your school expenses, especially for students coming from a low-income background. It’s a frustrating reality. If you are lucky enough to get funds to help with books and living expenses after tuition is covered, you will need to decide what expenses to cover with that money.

Usually, financial aid gets divided across your two semesters, pays tuition and fees, and anything left is paid out to you. This money is meant to help with books and other class materials, living expenses, transportation costs for getting to and from school, and other essential expenses. You are likely to have less financial aid coming back than your total expenses, so it is worth figuring out what your financial aid refund will cover and how you will pay for everything else. If you have childcare expenses you can even see if your school will increase your financial aid budget to account for those costs.

Making sure you have everything taken care of can help make it so your first weeks of college are focused on class, managing studying and a job or family responsibilities and getting to know new people, not standing in line at the financial aid office.

Have a great year!

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