Financial aid for college students comes in many different forms, from grants and scholarships to work-study and study loans. Each of these financial aid forms differs in terms of eligibility requirements and maximum aid offered.
In addition, schools differ in the way that they distribute financial aid to students. Front-loading is one way that financial aid may be distributed. It sounds attractive but there are some pros and cons of front-loaded financial aid packages that you should be aware of.
What Is A Frontloaded Financial Aid Package?
A front-loaded financial aid package is one in which the college offers the bulk of a student’s financial aid package during their freshman year. The amount of aid offered is reduced over the subsequent years. This is different from other schools that distribute the financial aid equally over four years. The amount of financial aid offered is the same in both cases. However, the big difference lies in the way it is distributed.
So why do some colleges front-load their financial aid packages? The reason is simple – they do it to attract more students and boost their application rate. More often than not, this works. The first choice of college for most students is one that’s offering the most generous financial aid package. That’s not surprising. The more financial aid a student receives, the lower their student loan debt, which is a huge factor.
However, what students don’t understand are the long-term consequences of front-loading.
Consequences Of Front-Loading Financial Aid
With front-loading, you receive the major portion of your financial aid package during your first year. This sounds great as it means you don’t have to worry about how you’re going to cover your cost of attendance during your first year.
However, the amount of financial aid drops during your second year, then again during your third and fourth years. That means you will have to find a way to get the additional funds you need to cover the costs of the next three years in college. There are some advantages to this system but there are some downsides too. Here’s what you need to know about the pros and cons of front-loading in education.
Pros and Cons of Front-Loaded Financial Aid Packages
Pros: All students don’t necessarily require financial aid for all four years in college. Some students just need funds during the short term to tide over a temporary financial crunch. Front-loading is a great solution for these students. They get the funds when they need them most and then they manage on their own.
Cons: The financial aid drops drastically from the second year onward. Students who can’t afford to cover their ongoing tuition from their family’s private funds turn to private student loans. Private loans have higher interest rates. This increases a student’s total loan debt considerably.
Is Front-Loading The Right Option For You?
You will benefit from a front-loaded financial aid package if you’re in a situation where you only need financial aid temporarily during your first year. And, you know you have the funds to cover your tuition as you enter your second year onwards. In this case, front-loading may actually save you money. You won’t be taking on excess funding that you don’t really need during your second, third, and fourth years.
Exercise caution when choosing this option. Make sure you understand how it works and how much financial aid you’ll get for every year in college. Go through your finances and make a firm plan on how you intend to pay the ongoing tuition costs after your first year.
Important Things To Keep In Mind
A front-loaded financial aid package may or may not be right for you. The important thing is to take stock of your finances before you make that decision. It can make a big difference in the amount of student loan debt that you take on.
Make sure to read all acceptance and financial aid letters very carefully. Don’t just skim through the details of the financial aid package. Read the fine print. If the first-year aid package looks very generous, read further to find out what happens during the subsequent years. Is the aid package just as generous after the first year or is there a steep drop? Calculate how much you’ll need to pay under both circumstances. Then consider your finances to determine whether you can afford to pay the higher tuition.
Colleges always inform students upfront about the manner in which the financial aid will be disbursed. It’s your responsibility to read through the details and understand your financial obligations. If something is unclear, call the school’s financial aid office and get the clarifications you need.
Keep in Mind…
Front-loaded financial aid packages work for some students, not all. The most important thing is to first understand how it works. Then take the time to determine whether this is the right option for you. Last but not least, if you plan on accepting the offer, give some thought to how you are going to finance your college education after the first year.
Want to know what financial aid you could receive from the colleges on your list? Check out your personalized estimates with a free College Raptor account!
| Lender | Rates (APR) | Eligibility | |
|---|---|---|---|
 |
5.50%-16.12%* Variable
3.99%-15.61%* Fixed
|
Undergraduate and Graduate
|
VISIT CITIZENS |
 |
5.54% - 15.70% Variable
3.99% - 15.49% Fixed
|
Undergraduate and Graduate
|
VISIT SALLIE MAE |
 |
4.63% - 17.99% Variable
3.49% - 17.99% Fixed
|
Undergraduate and Graduate
|
VISIT CREDIBLE |
 |
6.00% - 13.75% Variable
3.99% - 13.75% Fixed
|
Undergraduate and Graduate
|
VISIT LENDKEY |
 |
5.66% - 14.72% Variable
3.69% - 14.56% Fixed
|
Undergraduate and Graduate
|
VISIT ASCENT |
 |
3.70% - 8.75% Fixed
|
Undergraduate and Graduate
|
VISIT ISL |
 |
5.62% - 16.85% Variable
3.69% - 16.49% Fixed
|
Undergraduate and Graduate
|
VISIT EARNEST |
 |
5.00% - 14.22% Variable
3.69% - 14.22% Fixed
|
Undergraduate and Graduate
|
VISIT ELFI |
