You were offered $7,500 this year because you are now junior or senior standing (if not, you may have checked the wrong box for year in school on your FAFSA, in which case your school will reduce the loan offer by $1,000 when they realize that you reported your year in school incorrectly).
Here is a good link with an explanation about financial aid: Financial Aid 101. It’s from one particular school, but it has good information. This is pretty good, too: https://www.usnews.com/education/best-colleges/paying-for-college/articles/an-ultimate-guide-to-understanding-college-financial-aid.
What articles about financial aid typically don’t tell you is how financial aid is determined. First, the family’s financial information is collected on the FAFSA. A number called an EFC is generated, and it’s used to award financial aid. If low enough, the EFC qualifies a student for a federal Pell grant and possibly a federal grant called SEOG. Work study might be awarded, but schools have a limited amount of work study funding, so a student may qualify for work study (FWS) at one school but not at another; in any case, it’s not guaranteed money but rather an opportunity to work in a job and possibly earn up to the amount of the award (job and hours worked not guaranteed). The final piece is loans … these are awarded based on year in school, and part or none of the amount may be subsidized, depending on financial need.
Here’s the formula: Cost of Attendance - EFC -Pell Grant if eligible - SEOG if eligible - institutional scholarships if any are awarded - outside scholarships if any = Need.
At this point, schools will determine whether the Need amount meets criteria for any institutional grants; it sounds like your EFC is too high. If there are institutional grants awarded, they are deducted from the Need amount & Remaining Need is calculated.
Remaining Need - FWS if any = Need for Awarding Subsidized Loans. If that amount is greater than or equal to $3,500 the full $3,500 subsidized loan eligibility is awarded. If not, but the Need for Awarding Subsidized Loans is greater than 0, a subsidized loan is awarded in that amount.
Finally, Need for Awarding Subsidized Loans - Subsidized loan if any = Remaining Eligibility for Unsubsidized Loan. The amount awarded is the annual loan maximum amount for year in school ($5500/6500/7500) - Subsidized loan if any.
Hope that helps clarify the process. Many, many students are eligible for loans only. This is because very few schools meet students’ full financial need.
Hopefully I didn’t screw up anything in my long winded response!