How to understand your financial aid offer

Decode your financial aid offer

So, you’ve submitted the FAFSA® (hopefully), and you’ve received financial aid offers from each school you were accepted to. They might contain different grants, loans, scholarships, and, potentially, work study. You’re probably wondering, “what does all of this mean?” And that’s completely normal. Whether you’re a first-year or an upperclassman, a financial aid offer can be confusing. Let’s break it down.

What to expect in a financial aid offer

A financial aid offer can look different depending on the school. There’s actually no standard format for financial aid offers. Let’s look at the typical components you might see listed.

Cost of Attendance (COA)

The first thing you’ll see listed is the total cost of attendance. Depending on the school, you will either see the COA for the semester or for the entire academic year. The amount listed is an estimate of tuition and fees, room and board, transportation, and supplies, such as books and laptops.

Student Aid Index (SAI)

The Student Aid Index is replacing the Expected Family Contribution (EFC). The SAI is an index number based on the information you provided in your FAFSA®. The government uses that number to determine what types of aid you’re eligible for, and how much.  


Grants can come from federal and state governments or schools and private institutions. Like the name suggests, grants are essentially gifts that are not expected to be repaid. However, you’ll want to make sure you stay eligible for them because grants are typically need-based and aren’t guaranteed to be offered every year.


Scholarships can be awarded to students based on info from the FAFSA® for a variety of reasons, such as financial need, community service, or academics for their field of study.

Students have to specifically apply for outside scholarships, and they may not be listed in a financial aid offer.

Like grants, scholarships don’t have to be repaid, but you’ll want to stay on top of them because they may not be offered every year.

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Federal Student Loans

Federal student loans let you borrow money directly from the federal government; you pay this financial aid back with interest. A financial aid offer may also list the amount you can borrow with a credit-based loan, like a federal Direct PLUS Loan or a private student loan.

Work Study

Federal work study is a program that schools participate in where you work to earn your financial aid, like a part-time job. You don't have to pay back the money you earned.

How to weigh your options

If you’re still deciding which school to go to, your financial aid offers could be the deciding factor. When it comes to comparing your offers, you’ll have to compare the aid with the cost of attendance at each school. Make a spreadsheet of your offers and subtract the financial aid from the cost of attendance to compare how much each school will cost you out-of-pocket. 

Accepting your financial aid

Accepting your financial aid offer is as easy as clicking accept or sending in a form. You don’t have to accept everything, but you need to respond by the school’s deadline. Maybe you don’t want to have any loans—that’s totally fine. You don’t have to accept them. But you can still accept the grant or scholarship that was offered. It’s all up to you and how you want to approach paying for college.

If an unexpected change in your financial situation occurs, you may be able to work with the school to appeal for more aid. Keep in mind that there must be reasonable evidence for the appeal to take place.


Financial aid offers can differ from year to year. every school year. That’s why it's so important to file the FAFSA® every school year. And don’t hold back from applying for scholarships either. Gift aid is not just for gifted students.

Remember to have a plan to pay for college and base your decision on what best fits your plan. Remember, bigger isn’t always better. You may be offered more financial aid from a school that will still cost you more in the long run. Or a school that seems more expensive might have more money to offer you than a school with a lower sticker price.

Take your time during this process and choose what’s right for you.

footnote Sallie Mae does not provide, and these materials are not meant to convey, financial, tax, or legal advice. Consult your own financial advisor, tax advisor, or attorney about your specific circumstances.

footnote External links and third-party references are provided for informational purposes only. Sallie Mae cannot guarantee the accuracy of the information provided by any third parties and assumes no responsibility for any errors or omissions contained therein. Any copyrights, trademarks, and/or service marks used in these materials are the property of their respective owners.

footnote FAFSA® is a registered service mark of U.S. Department of Education, Federal Student Aid.

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