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Financial Aid Award Letters

Find out how much financial support the school will give you for the coming year.

After a college accepts you, you'll receive a letter that outlines how much the school will cost and what kind of financial aid package you'll receive — including federal, state, and school sources.

There’s no standard format for schools’ award letters, but they contain the same overall information:

  • How much your year in college will cost
  • The financial aid package that the school is giving you
  • What portion your family is expected to contribute
  • Any gap you’ll have to make up through other sources

It may be your first time evaluating an award letter but don’t worry. Here are tips and steps to help you break the code of financial aid letters and determine which college is the best fit for you.

Comparing financial award letters

Video: For information on how to compare letters from different schools, view the video, “4 Tips on How to Read Award Letters.”

g Factors considered when awarding financial aid

As a first step, decode the acronyms. After you submitted the Free Application for Federal Student Aid (FAFSA), the U.S. Department of Education sent you a Student Aid Report (SAR). Your SAR summarized the data from your FAFSA and indicated your official Expected Family Contribution (EFC). A school subtracts the EFC from the cost of attendance (COA) to determine your financial need. Another way of looking at it is COA - EFC = your financial need and the amount of your award.

Your federal financial aid award takes into consideration:1

  • COA
  • Family income
  • Family size
  • Number of family members in college or graduate school
  • Family background
  • Scholarships or grants not received through the school
  • Major or field of interest
  • Athletic abilities

g Translate the information in your financial award letter

COA: COA is an estimate of what you can expect to pay for:

  • Tuition and fees
  • Room and board
  • Books and supplies
  • Personal expenses

Schools cannot offer more financial aid than is required to cover the COA.2

Analyze your financial aid package: This includes all of the sources for financial aid that the school is offering you and that you’re receiving from federal and state sources:

  • Grants:
    Money that does not have to be paid back. Grants are usually based on financial need.
  • Work-study:
    Money earned by working, either on campus for the school, or off campus.
  • Scholarships:
    Money that does not have to be paid back, including scholarships you informed the school about, and those the school is offering.
  • Federal student loans:
    Money from the federal government that you’ll have to pay back with interest.
  • Expected Family Contribution:
    This amount, calculated from your FAFSA, represents what the government feels you and your family can pay toward your college costs.

Uncover the gap amount: If the financial aid package does not cover the entire cost of attendance, you will have to pay the remainder, or “gap” from other sources, such as a private student loan. Some schools supply a list with recommended lenders.

g Helpful tips

  • Review the information in your SAR and your EFC to make sure there are no errors.
  • You may have to “accept” or “decline” your award with the school, either online or by returning a signed form. But you don’t have to accept all the terms in your financial award letter.
  • Your award letter covers one year only; you’ll need to fill out the FAFSA and apply for financial aid every year you’re in school.
  • When you’re comparing schools’ offers, be sure to consider other factors, like its environment, quality of the program, and graduation rate.

Build your overall plan with the College Planning CalculatorSM, a free tool that helps calculate the expected cost of college and how you will successfully pay for it with savings, income, scholarships, grants, and loans. With this tool, you’ll be equipped to determine which college is the best financial fit for you.

Start Your Plan

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1 This information was gathered on 2/9/16 from,, and

2 This information was gathered on 2/9/16 from

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