Financial Aid
 Understanding the Financial Aid Award Letter
Financial aid award letters outline the type and amount of aid families can receive, such as scholarships, grants, and loans. Sometimes these letters can be difficult to comprehend, but the following information can assist in understanding what the letter means.
Financial Calculations
This section shows a summary of the cost of attendance for each school, the expected family contribution, and the financial need.
- Cost of Attendance (COA): includes tuition and fees, books and supplies, living expenses, transportation, and personal costs.
- Expected Family Contribution (EFC): the amount that the government has determined each family can contribute toward the cost of a student's education.
- Financial Need: COA minus EFC = Financial Need. This figure is how much financial assistance a student will need at a particular school. Financial need varies from school to school.
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Say your EFC is $5,000. At a college with a total cost of $8,000, you'd be eligible for up to $3,000 in financial aid. At a college with a total cost of $25,000, you'd be eligible for up to $20,000 in aid. In other words, your family would be asked to contribute the same amount at both colleges.
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Comparing the Financial Aid Award Letter
It is important to compare the different financial aid award letters received from each school in order to make an educated decision on which college is best. In order to make comparisons, each family should follow these guidelines:
- Compare like terms. Families should make sure that the cost of attendance is the same for each school before comparing. Some schools may not include transportation or personal costs in their estimated cost of attendance.
- Compare ratio of gift aid to self-help aid. Generally, packages with a higher proportion of gift aid are more appealing because students may have less debt when they graduate. However, more gift aid may mean a larger family contribution at some colleges.
- Compare the terms of any loans included. Will the payments be affordable? Student loans with low interest rates and no repayment until after college may be more affordable than unsubsidized or private loans.
- Compare the effect of scholarships on other aid. If students are applying for or will qualify for outside scholarships, they should determine if it is possible for a scholarship to reduce their financial aid package.
- Check on future packages. What part of the financial aid award is renewable from year to year? Are there requirements for maintaining the awards?
After Receiving the Financial Aid Award Letter
After reading the financial aid award letter, families may realize that the awards listed are not enough to cover all expenses. However, there are other loan options that may not be shown on the letter. Parents may be eligible for the Federal PLUS Program or students could consider getting a private student loan.
After receiving the financial aid award letter, students must let the school know whether or not they are accepting or declining the awards. Not everything that is offered has to be accepted. Declining an award will neither help nor hurt the award. Students should pay close attention to deadlines for accepting the award package. Deadlines are usually within two weeks after receiving the award letter. If a deadline is missed, students may risk losing a scholarship, grant, or loan assistance.
For more information about the financial aid award letter, contact the Financial Aid Administrator from the college.
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