After schools have processed your information from the Free Application for Federal Student Aid (FAFSA) and school-specific financial aid applications, you will begin receiving financial aid award letters. If you plan to attend college in the fall, these letters typically arrive in April. When you read your financial aid award letters, you should keep a few things in mind as you determine which school offers the best financial aid package – and the best value.
What is a financial aid award letter?
Financial aid award letters include details about the cost of attendance (COA), your expected family contribution (EFC) and the aid available to you. These details may include:
- Direct costs like tuition, fees, and room and board
- Indirect costs like textbooks and transportation
- Gift aid such as grants and scholarships
- Student loans available to fill the gap between what’s covered by gift aid and what you can afford
While there is no standard formula for financial aid award letters that schools are required to follow, the U.S. Department of Education’s Financial Aid Shopping Sheet gives you a good idea of what that letter could look like.
Comparing financial aid offers
To effectively compare award offers, you will need to know what you will be expected to pay, including loans. To know exactly what your cost is for each school, add up all the direct and indirect expenses and subtract only the gift aid.
In some cases, what appears to be the most affordable option is not. One reason for this is a sneaky practice in which a school front-loads most of the gift aid in the first year, then offers less aid during later years. This can cause students to pay more during their sophomore, junior and/or senior years.
To find out how much you’ll pay over the course of your education, ask the school’s financial aid office whether they front-load gift aid. If you can’t get a straight answer from them, look up the school’s tuition and financial aid information using the College Navigator. Sometimes, a school that offers less financial aid is still the best deal because its tuition is lower or because you can live at home while attending.
Accepting financial aid
If you have your financial aid award letter in hand, congratulations! You’ve entered the home stretch. Read and follow the directions in your financial aid award letter. You may have to complete an online form in order to accept your award, or fill out and return a paper form. And it’s important to accomplish these tasks before the published deadlines.
What if you need more money in order to go to college?
Need-based and non-need-based financial aid is determined using the information you provided on the FAFSA. Sometimes, the offered awards don’t meet all the expenses necessary to go to school. If you have unique circumstances and financial constraints – such as caring for a dependent with special needs – speaking with a school’s financial aid office might convince the school to offer additional aid. In addition, money gaps can be filled by private loans.
If you want to explore the options available with private student loans, download our free private student loan guide to learn more.