breaking down a financial aid offer

Let's talk financial aid offer letter!

It’s time to look through your Financial Aid Offer Letter. This might feel a little boring, daunting, or even confusing but it’s a crucial part of the process that you should pay close attention to.

what is a financial offer letter?

A financial aid offer letter is a letter given by each institution that has admitted you and received your completed FAFSA application. It details your anticipated academic expenses and all the financial aid the institution has to offer you. These aids may come in the form of scholarships, grants, loans, or work study. A new offer letter is given to you every academic year upon the completion of your FAFSA. There is no standard format for financial aid offer letters and each school may use different terminologies to describe the same types of aid.

why is an offer letter important?

An offer letter is important because it breaks down your financial responsibility for one academic year and all the funds you’re being offered to cover the cost of attending college/university.

when can you expect to receive your financial aid offer letter

How soon you receive your Financial Aid Offer Letter heavily depends on when the institution that you’ve been admitted to receives your completed FAFSA. Typically, you can expect to receive your Financial Aid Offer Letter within 2-3 weeks after completing your FAFSA and being accepted into the institution.

2 Year Plan

At the latest, you should receive your offer letter late spring/early summer.

4 Year Plan

At the latest, you should receive your offer letter between March-April.

what's in a financial aid offer letter?

Cost of Attendance (COA)

The cost of attendance is an estimate of the total cost needed to attend college or university for one academic year. Your total cost of attendance includes two types of main costs, the direct cost and the indirect costs.

2 Year Plan

Direct Cost: The direct cost of attendance are items that you will be billed by the college/university. These are tuition & fees, housing and meal plans. Typically, two years institutions do not have housing and meal plans so the only direct cost that may appear on the offer letter is the tuition & fees.

Indirect Cost: The indirect costs are items that are estimated costs associated with going to college that are not billed directly by the

4 Year Plan

Direct Cost: The direct cost of attendance are items that you will be billed by the college/university. These are tuition & fees, housing and meal plans.

Indirect Cost: The indirect costs are items that are estimated costs associated with going to college that are not billed directly by the university. These costs include books, transportation, and any personal expenses needed.

types of aids offered in an offer letter

The information below describes the types of financial aid you could be offered in your offer letter. Each type of aid serves its own purpose and together, covers the expected COA for one academic year.

Scholarships

Scholarships are financial awards given to students to cover expenses. Students can be awarded scholarships based on their academic or athletic performance. Majority Of scholarships are given to students based on academic achievements. The importance of scholarships is that it provides financial support that students are not later burdened to pay back. Scholarships are free money and the ideal way for students to finance their education.

Grants

Grants are another form of financial assistance that students do not have to pay back. Grants are awarded through both federal and state government. Most undergraduate students are awarded the Federal Pell Grant. The Federal Pell grants are usually awarded to undergraduate students to display exceptional financial need through the information provided on their completed FAFSA.

Work Study

Work study is a form of financial aid offered to students that display exceptional financial need through information on the FAFSA. Work study gives students a way to earn income through part-time on campus (sometimes off campus) employment to pay for school expenses. This also gives students the opportunity to earn valuable work experiences while taking classes. If you are awarded work study, you are not automatically given the funds. Students have to find employment through applying to various positions. Once the students start working, the funds will be distributed to them through their paycheck. These earnings are meant to help students with some indirect costs associated with going to college.

Loans

This is the most important type of aid you will want to pay special attention to. Loans are financial aid money given to students that MUST BE PAID BACK. Most students are offered some form of loans in their financial aid offer letter and depending on the type of loans, they accumulate interest at different rates and times.

comparing offer letters

Chances are that you’ve received an offer letter from multiple schools that have admitted you. This is where you have all of the power! The schools are now competing for your attendance! Your job here is to compare each offer letter to identify which school is offering you the most FREE MONEY! “Free money” is money you don’t have to pay back, i.e scholarships, and grants. You want to avoid the school that is offering you the most loans and least amount of scholarships and grants! Using this comparison tool from UAspire or anything similar can help you with the comparison.

accepting/declining financial aid offer

Remember that an offer letter is just as it sounds…an OFFER. And like every offer, you do not have to accept it! As a student, you have a right to accept and/or decline any financial aid offer given to you. Just because an institution offered you a certain amount, doesn’t mean you have to accept it. You can also adjust the amount of offer given to you. Typically, students adjust their loan offers because it is the aid that must be paid back and use a payment plan instead.

fafsa verification

You’ve completed your FAFSA but you may have been selected for FAFSA Verification. When you submit your FAFSA, you might see a note on your SAR that notifies you that you’ve been selected for verification. The verification is simply a process used to confirm that the information you reported on your FAFSA is accurate. When selected for verification, your college/university will contact you with the necessary documents needed to support the information you provided. Do not assume you did something wrong. Some verifications are random and others are conducted for every student at the specific colleges/universities. An incomplete verification can also delay your Financial Aid Offer Letter so make sure to send in necessary documentation the college/university requested. Contact your college adviser, MCAC adviser, or counselor if you need assistance in completing FAFSA verification.

Hope this has been a helpful first step in reviewing your Financial Aid Offer Letter. Remember to contact the Financial Aid office at your desired institution for more detailed information on your specific offer letter!

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