Consumer Reports details college financial aid offers

NEW YORK (WABC) -- For many high school seniors, May 1 isn't just the start of a new month. It's also the start of the next chapter of their lives. It could be referred to as Decision Day, the day where a deposit needs to be placed in order to secure a spot at the college of their choice come the end of the summer.

As decisions are being made, the school's financial aid offer becomes an important factor. No matter where a high school senior is headed, whether it's a small school or an over-sized university, it's important to understand the financial aid package and avoid any excessive debt.

First and foremost, it's important to check what is being offered in grants and scholarships, neither of which needs to be paid back. Also, keep in mind that the financial aid offer letter often only covers the first year of schooling.

The letter also details how much money you can get in federal loans. For the funds not covered, you may have to look to private loans borrowed from a traditional lender.

"Contact the financial aid office and ask questions like, is a grant renewable? Does a scholarship require a certain GPA for it to continue into another year?" said Donna Rosato, Money Editor of Consumer Reports. "You want to make sure you start with federal loans. They have a lot of advantages over private loans. They have fixed interest rates, also more flexible repayment options."

It's also important to check whether the federal loans are subsidized. Subsidized loans are preferable because the student is not responsible for any accrued interest until they leave school.

For more information and to compare costs and financial aid at each school in consideration, visit ConsumerFinance.gov/paying-for-college.