How to Read a Financial Assistance Award Letter

You have just received a financial aid letter from the college you always wanted to go to. But before you start celebrating, there’s just one problem…how are you even reading this?


If you feel lost, don’t worry! Here is a summary of how to read a financial aid award letter.

What is a Financial Assistance Award Letter?

A financial aid award letter is a document that describes the various types of assistance a student is eligible for, such as grants, loans, and scholarships. It also lists the specific amount of each type of assistance the student has received.

Financial aid award letters are also sometimes referred to as a financial aid notice, financial aid package, or simply an award letter. Students can expect to receive their letter around the same time they receive their acceptance letter, usually in late March or early April.

Students should carefully review their award letter and compare it with the estimated cost of participation (which we will discuss in a moment) to get a clear idea of ​​how much they will need to cover on their own.

Key financial aid terms to understand

Financial aid award letters vary from school to school. But here’s a rundown of some of the key things you should see when you receive a letter in the mail.

Cost of Visit (COA)

Cost of Attendance (COA) is the total amount that it will cost you to attend college for one academic year. These are usually tuition fees and fees, room and board, books and supplies, and other expenses such as transportation. You usually see this score at the very top of the award email.

Expected Family Contribution (EFC)

This is the estimated amount your family should contribute to your education, as shown on your Free Application for Federal Student Assistance (FAFSA).

The FAFSA is the form you (and your parents if you are a student dependent) must complete to apply for federal financial assistance, including grants, loans, and work-based training.

Read more: Money up to 30 years. FAFSA Completion Guide

financial need

Your financial needs are the difference between COA and EFC. In other words, this is how much you would have to pay out of pocket if you were not given financial assistance at all.

If your COA is $20,000 and your EFC is $10,000, your financial requirement is $10,000.

Grants, scholarships and other gift aid

These are forms of free money that you don’t have to pay back. Scholarships are often based on academic merit, but can also be based on need, your major, or other criteria.

Scholarships are usually awarded by colleges, while grants are usually awarded by the government. Scholarships can be used to pay for any education expenses, while grants are often need-based and can only be used for certain expenses such as tuition and fees.

Read more: Scholarships and Grants: How to Earn Free Money for College

student loans

Student loans are a form of financial aid that you have to repay with interest. There are two types of student loans: federal and private.

  • Federal loans are available to all students, regardless of their financial need. They are supported by the government.
  • Private loans are offered by banks and other lending institutions and usually require a good credit history.

Read more: Best student loans 2022 – how to find the best loan

Work study

Work-study is a type of financial aid that allows you to work in exchange for money to help pay for college. It usually depends on your needs, so your work-study eligibility may be based on your FAFSA.

The amount of money you can earn by working and studying depends on your financial needs, the school you attend and the availability of a job. Work and study work is usually carried out on campus, although some may be off campus.

Read more: Everything you need to know about FAFSA (but you were too afraid to ask)

When can I expect to receive a financial aid award letter?

Full-time students who first submit their FAFSA application by the due date may expect to receive a financial aid letter around the same time you receive your admission decision.

If you are a returning student or if you submitted your FAFSA application after the priority deadline, it may take longer to receive your financial aid letter.

What might be missing from the letter?

Not all colleges are required to include the same information in their financial aid letters.

For example, the cost of college education (COA) covers a wide range of expenses, from tuition fees to books and supplies.

However, some universities may not consider certain costs such as travel and personal expenses. You can add those costs back in so you can compare college apples to apples.

Scholarships and loan terms may also vary from school to school. If you have been granted assistance, please note how long any scholarship lasts, what requirements you must meet to keep it, and any other requirements.

MU30 TIP: If you have any questions about your Financial Aid Award Letter, do not hesitate to contact the College Financial Aid Office. They will be more than happy to help you understand your options and make the best decision for your future.

What should I do after I receive a financial aid award letter?

Once you’ve received your financial aid award letter, it’s time to compare your options and decide which college to attend.

When making a decision, be sure to consider:

  • Financial gap you will have to cover after you take into account the total cost of the visit and the types and amount of assistance you are offered.
  • Something you can realistically afford to get back after you graduate. Taking on too many loans can put you in financial trouble after college, so borrow responsibly.

For example, suppose you are trying to choose between two schools in this table, a private university and a public university:

Private university State University
Cost of Visit (COA) $55,000 $25,000
Expected Family Contribution (EFC) $10,000 $10,000
Financial need (COA – EFC) $45,000 $15,000
Financial Aid Award $30,000 $12,000
financial gap $15,000 3000 dollars

In this table, the financial gap is how much you will have to cover out of pocket each year.

Even though a private university is willing to give you $30,000 in aid compared to $12,000 for a public school (which sounds like a better deal on the surface), a public school is still significantly cheaper.

Read more: Decision-making day just got easier with the latest college scorecard update

What if I don’t like my financial aid award letter?

If you are unhappy with the financial aid letter you received, don’t panic! Here are a few things you can do:

Look for other sources of help

You can find additional scholarships and grants from private organizations or the government.

Negotiations with the Financial Aid Office

If you have a good reason why you need more help, you can negotiate with the Financial Aid Department for a better package.

Read more: How (and when) to dispute a financial aid package

Take loans

You can always take out a private or federal student loan to cover your college expenses if you’re in the mood for it. But be careful not to build up too much student loan debt.

The average monthly student loan payment is $460, but can be as high as $2,553 for a professional degree. Think Future You and try to keep your minimum payments as low as possible to ease your transition to work after graduation.

Read more: Student Loan Debt: Understanding the Growing National Crisis

Go to a cheaper school

The last option is to go to a cheaper school. After all, this is what I decided to do when I graduated from high school.

Story time…

When the financial aid letters started coming in, I was stuck between two schools: the college of my dreams (a private university that would cost $40,000 a year after receiving the aid) and a public university that would cost me about $2,000 a year.

As much as I loved a private university, I felt that no bachelor’s degree was worth more than $120,000 in student loan debt. So I chose a state university instead. I don’t regret a bit.


Now that you know what to look for in a financial aid award letter, it’s time to start reading! And remember, if you have any questions, the Financial Assistance Department is here to help.

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