The f
inancial a
id piece of the school puzzle
This is a big deal - you’ve been accepted to college, graduate school, or professional school - that’s awesome! Now it's time for you to select the school you want to attend… but you probably have some questions:
How much financial aid are they offering you?
If you have more than one offer, which is the better one?
What money is free and what will you have to pay back?
The information you’ll need to answer these questions is generally found in your financial aid award letter. And once you have the answers, you can compare the offers and decide which school you want to go to.
What's a financial aid award letter?
Financial aid award letters are keys that can help you unlock how you’ll pay for school, including how much you’ll have to pay on your own. If you submitted a Free Application for Federal Student Aid (FAFSA) or CA Dream Act (CCADA) and were approved for financial aid, every school that accepted you will send you a financial aid award letter.
Schools have different names for these letters; financial aid offer, merit letter, award letter, or financial aid package. Plus, there’s no standard format, so they can look different from one another. This can make comparing them a little difficult, but we can help you with that.
What’s in a financial aid award letter ?
Financial aid award letters usually contain this information:
Cost of attendance (COA), an estimate of what you can expect to pay for one year of school. This includes tuition and fees, room and board books and supplies, transportation, and even personal expenses. If the COA isn't included in your letter, check the school’s website or call the financial aid office.
Expected Family Contribution (EFC), a number that your school uses to determine how much financial aid you're eligible for. It's not ( despite its name) how much your family will have to pay for college.
College Grants are typically need-based and can be given by state or federal governments.
Federal work-study is a program, implemented by the school, where you work to earn your financial aid.
Federal Student Loans let you borrow money directly from the federal government; you pay this financial aid back with interest. A financial aid award letter may also list the amount you can borrow with a credit-based loan (like federal Direct PLUS Loan or a private student loan).
Free money vs borrowed money vs earned
Your award letter lists all the financial aid you’re eligible for, but there’s an important difference between whether the aid is free, borrowed, or earned:
Free money is money that you don’t have to pay back: scholarships, grants, and fellowships
Borrowed money is money you’ll need to pay back with interest: federal student loans (which may be listed as “Federal Direct Loans”) or credit-based loans (like Direct PLUS loans, which come from the federal government, or private student loans).
Earned money is like a part-time job and you don’t have to pay back the money you earn: work-study
When will you get financial aid award letters?
Most schools send out financial aid award letters around the same time as their acceptance letters. The timing can vary, however, depending on things like when you submitted your FAFSA or CA Dream Act and how many FAFSAs the school received. If you have questions about when you can expect your award letter, call your school's financial aid office.
Keep in mind, your award letter covers one year only, so you will get a new award letter every year. And that means you’ll need to fill out the FAFSA or CA Dream Act and apply for financial aid annually while you're in school.
Compare your financial aid packages
Okay, now it’s time to compare the award letters from all your schools and see which has the best deal for you. An easy way is to create a spreadsheet so you can compare their offers side by side.
Create a column for each school
Make a row for each category: COA, scholarships, grants, fellowships work-study, and federal loans
Subtract all the categories from the COA
What remains is the gap - the amount you’ll need to pay for school from other sources such as savings or a private student loan
A financial aid offer isn’t always set in stone
You don't have to accept all the financial aid listed in your award letter.
Let’s say you’re awarded work-study in your financial aid package but you know you’re going to be busy with schoolwork. Or the amount of the federal loan you're qualified for is more than you want to take out; you can say “no” to all or part of a financial aid award, or ask your school's financial aid office to review your financial situation. Just be sure that you won’t need to borrow money for costs that you could have covered with free money.
Whether you decide to accept or decline your financial aid package, you’ll need to respond to the award letter. Each school sets a deadline for a response, so don’t miss out, whether its mailing back a signed form or answering online. If you do decide to request more financial aid from a school, talk to your financial aid office. There might be a written process to request a review of your financial situation.
Remember, bigger isn't always better. Don’t rely only on the total dollar amount of a school’s financial aid award. For instance, you might receive a smaller total award that offers more scholarships and grants than a larger award consisting mostly of loans. Or, despite a generous financial aid package,School A will still cost a lot more than School B, which is offering less financial aid.
