One of the most important parts of choosing a college is figuring out the price tag.
As you've probably realized by now, that's not just a simple tuition number. Adding up costs and subtracting your financial aid offerings are all part of the equation.
In order to figure out your actual education costs, you need to start with the financial aid award letter you received from your school or schools of choice.
In this article, we'll answer the following questions:
- What is a financial aid award letter?
- When will I get my financial aid award letter?
- How do I read my financial aid award letter?
- How do I know how much financial aid I got?
- How do I know how much I have to pay?
- How do I compare financial aid offers?
- How do I accept my financial aid?
- What should I do if I don't understand my financial aid award letter?
- What if I think the information on my award letter is wrong?
- What if I can't afford to cover my family's expected financial contribution?
What is a financial aid award letter?
The next step in the financial aid process is getting your award letter from the financial aid offices of each of the schools you sent your FAFSA information to.
While in the past, all of these were true paper letters, nowadays many students find out about their financial aid awards via online accounts.
Regardless of how you receive it, the financial aid award letter contains information from the school about how much it will cost to attend and how much financial aid you're eligible to receive.
When will I get my financial aid award letter?
In order to receive an award letter from your school of choice, you'll need to have already filled out the FAFSA. You won't get an award letter until you've done so.
A school will typically send out an award letter one to three months after receiving your FAFSA information from the federal Department of Education. However, times can vary from school to school. The time of year may also have an impact on when you receive your letter.
How do I read my financial aid award letter?
There are a few key pieces of information you need to glean from your award letter:
1. Cost of attendance (COA)
This isn't just tuition. You'll need to include housing, food, books, supplies, transportation and any other potential college costs to come up with your total cost of attendance.
2. How much financial aid you received
You'll need to determine not only how much total aid you received, but how much of it is gift aid like scholarships and grants, how much must be earned throughout the semester via a work-study position and how much is in the form of loans that must be paid back.
3. The expected financial contribution (EFC)
This is the amount you are expected to cover through other means. If you don't have enough saved up, you may need to take out loans to cover this balance in addition to any loans already included in the aid package.
How do I know how much financial aid I got?
Schools typically include a total aid amount in their award letter.
However, it's important to be aware that schools may lump together gift aid with other kinds of aid, such as federal student loans and money that must be earned through a work-study position.
Remember that only grants and scholarship do not need to be paid back or earned throughout the semester.
How do I know how much I have to pay?
To determine how much you'll be paying to the school, you need to add up tuition and fees, plus room and board if you're living on campus. Then from this, you'll subtract your total gift aid. The rest must be covered by work-study, loans, savings, or other means.
Remember that this is the amount you'll have to pay to the school. This doesn't include things like room and board for off-campus housing, books and supplies, or transportation to and from school.
How do I compare financial aid offers?
At the end of the day, you need to know one thing: the out-of-pocket price tag for each college or university.
Most families choose to calculate their out-of-pocket costs by adding up their total expected cost of attendance (COA) and subtracting the gift aid they received.
The difference, regardless of whether it takes the form of loans, a work-study position, or money from savings or another source, must be covered by your family.
How do I accept my financial aid?
Once you know which forms of aid you wish to receive, you need to let your school's financial aid office know so they can process your aid.
Some larger schools have electronic systems where you can simply accept your aid via an online form. Other schools send paper award letters and require a paper application to accept the aid.
No matter the type of form, make sure to respond as soon as possible to maximize your aid eligibility.
If you're not sure, contact the school. They may even be able to help you over the phone.
What should I do if I don't understand my financial aid award letter?
Any time you have questions about financial aid, you should contact your school' s financial aid department. They know the correspondence they've sent and can help you understand it best.
What if I think the information on my award letter is wrong?
If you receive less aid than you were expecting or see other information that you think may be incorrect, reach out to the school.
Completing the FAFSA is a confusing process and it's easy to make a mistake that could accidentally disqualify you from the amount of aid that you should be entitled to.
If you feel that your award package is lower than appropriate and that you might be eligible for additional aid, you might consider appealing your award letter.
This is especially true for families whose financial circumstances have changed dramatically since the year of the tax return used to complete the FAFSA.
What if I can't afford to cover my family's expected financial contribution?
Families that can't cover their expected financial contribution often take out Parent PLUS loans or private student loans to make up the difference.
See our picks for the Best Private Student Loans of 2019.