College Scholarship Search College Search Career Exploration College Admissions Articles Financial Aid and Student Loan Calculators Compare Student Loans

Understanding Financial Aid Award Letters 

Wednesday, April 30, 2008

As the cost of college continues to rise (tuition at George Washington is closing in on $40,000), the financial award letter can often be just as important as the college acceptance letter in determining where you plan on going to college. Understanding the financial aid award letter will help you and your parents make a well-informed decision about your college future.

We like to refer to the tuition rates you see published on a school's website or in college guidebooks as the "sticker price." As with cars, most people don't end up paying the "sticker price." Colleges offer "discounts" off the "sticker price" in the form of scholarships, grants, work-study, and loans. The financial aid award letter lays out these "discounts". It's not just the size of the "discounts", but the make-up of these "discounts" that's important.

Check out a sample financial aid award letter.

What you want to look for on your financial aid award letter

Financial Aid Letter Part #1: Cost of Attendance

First off, take a look at the make-up of the cost of attendance. Some colleges will break out the expenses into categories like tuition, room and board, travel, and personal expenses. Colleges may differ on what they include in the cost of attendance. You want to be confident you are comparing apples to apples throughout this process. Make sure you are clear on what has been factored into the cost of attendance and, more importantly, what has not been incorporated into the cost of attendance.

Financial Aid Letter Part #2: Expected Family Contribution

Secondly, you want to locate what the school is expecting you and your parents to contribute out of pocket based on the financial aid office's assessment of your and your parents' financial situations. Some schools will provide a single "Expected Family Contribution" while others may break this amount into a Student's Contribution and Parents' Contribution. This is the school basically saying "We looked at your finances, and we think you and your parents can afford to pay $___ toward college."

Financial Aid Letter Part #3: Financial Aid Offered - Amount and Mix

Now, we get to the real guts of the financial aid award letter where the school lays out what types of aid they are offering and how much of each type. This is where you really want to take a good hard look and make sure you understand what's going on. The mix of the financial aid is as important (if not more important) than the amount. Free money (that means scholarships and grants) is the best type of financial aid. Federal loans such as Perkins Loans and Subsidized Stafford Loans are better than private loans, but they still need to be repaid. It's also important to remember that you don't just get federal work-study money. You're going to have to get a job on campus and actually earn that money. The federal work-study amount on your letter is the maximum amount you can receive, not a guaranteed amount. So to recap, here are the financial aid types from best to worst:

  1. "Free Money"... that's scholarships and grants (renewable scholarships are better than one-time awards)
  2. Federal loans (Perkins, subsidized Stafford, unsubsidized Stafford)
  3. Private loans

Financial Aid Letter Part #4: Unmet Need

Okay, so now you understand how much financial aid the school is offering and what types of aid are included in your package. The next step is determining if there is any unmet need. You can determine the unmet need by taking the cost of attendance and subtracting the expected family contribution (what the school said you can afford to pay) and the financial aid package (what the school has offered you to meet your financial need).

In mathematical terms:
COA - (EFC + Financial Aid) = Unmet Need.

Typically the lower the unmet need, the better. However, as we said before, a school may be offering less aid and leaving you with more unmet need, but may actually still be a better deal if their financial aid package contains mostly "free money" and fewer loans.

Questions You Should Ask

How will my financial aid package change over time?

The package you receive your sophomore year may look different than the one you receive for freshman year. Find out whether scholarships are renewable or one-time awards. See if there are certain requirements for keeping scholarships (e.g., maintaining a 3.0 GPA).

How do outside scholarships affect my financial aid package?

If have done a great job searching for scholarships and have won a few awards, make sure you understand how these scholarships will impact your package. Some colleges will reduce the loan component to offset these outside scholarships, while others will unfortunately reduce the scholarship / grant component of your financial aid package. Colleges will usually spell out this information in their Outside Scholarship Policy.

Some Help Comparing Financial Aid Packages

So now you know what to look out for when comparing financial aid packages, and all you need is a tool to help you compare them. Well, you are in luck. We've developed a Financial Aid Award Evaluator so you can view side-by-side comparisons of your financial aid award letters for up to 4 colleges.

We also offer a tool to help you compare student loans. Our Student Loan Marketplace enables you to dig into the guts of a student loan and really understand how all the parts of a loan (interest rate, up-front fees, borrower benefits) come together to impact how much you actually have to pay.

Labels: , , , ,


Blogger Unknown   April 20, 2017 at 10:55 AM

Today there are many talks about students loosing financial aid but as an expert with I'd state students are not at risk of losing financial aid. The IRS DRT Tool is not required to complete the FAFSA. Can it be convenient for some? Yes, but it is not required. You can still complete your FAFSA the way everyone did before DRT was available, enter the numbers from your tax return. DRT is not even required for verification. It can make it more convenient for some. Not everyone is selected for verification. Yes the feds encourage the use of it because they are working to insure data is accurate but it is not required. If you are not selected for verification and NEVER use IRS DRT you won't lose your financial aid. IF selected for verification tax transcripts can be requested online at or by using the 4506-T form. Ask your financial aid office they can assist you. We should not frighten students and their parents away from applying for funds needed to further their education. Our approach in our office is to identify those still needing a transcript to complete verification, remember this was available starting October 2016, and we will work with them to complete verification so financial aid can disburse. I promise, just because the IRS DRT Tool is down you can still apply for student financial aid.

Anonymous   November 6, 2017 at 1:27 AM

Hey guys if you want some unlimited fun then here on our homepage you will play game watch moves and you can do many thing it is one of the best online fun website you can do it free of cost without paying any amount it is one of the best portal.

Blogger Unknown   December 14, 2017 at 5:01 AM

You have done a great job. I will definitely dig it and personally recommend to my friends. I am confident they will be benefited from this site. How to get help in Windows 10

Anonymous pay for homework   April 17, 2018 at 4:48 AM

You are probably sitting in your dorm room, in full blown panic mode-kicking yourself for having procrastinated for this long you dread having to break a sweat trying to cobble together a version of the assignment at the last minute.

We are here to lessen that midnight feeling of dread and angst and replacing it with the feeling of ordered calm that comes from knowing that your essay is being handled by a team of experienced professionals.

Blogger Unknown   August 29, 2018 at 1:34 AM

I am very happy that I have visited your blog because you have shared a one of a kind
blog which has all the things in a very pleasant manner.The information you shared here is unique and informative which is very rear to see nowadays.I am writer working at write my paper for the past 7 years.I would have missed the useful information if I didn't find your site.So keep on sharing hope to see more from you.

Blogger Michael Jones   December 7, 2018 at 12:16 AM

All Assignment Help is a web portal where students get help in making assignments for all the subjects, with the help of our experts. You will get 100% plagiarism free assignment. Expertes consultation is also available for students. If they have any query they can contact with our experts anytime.

Blogger Unilex business consultants   January 24, 2019 at 5:30 AM

we provide you a hassle free registration process which would be dealt by our professionals within a time frame of 10 working days and is subjective to governmental processing time. Our team One Person Company registration takes care of the documentation and aids in provide you the realistic estimation of cost.

Blogger james cook   March 25, 2019 at 11:51 PM

It is nice to read such high-quality content. It is a good article that discusses the topic at hand quite well. I am looking forward to read more articles from your site. Keep up the good work.
assignment help

Blogger Domenic Tylor   April 1, 2019 at 7:20 AM

If you feel that you are stuck, you can take instant assignment help online to get proper ideas and work. There are several web services which can help you to find out a suitable solution to your requirement. Book now at

Anonymous   June 14, 2019 at 3:49 AM

The information you shared is very helpful, thank you very much.

Blogger Angel Claudia   August 20, 2019 at 8:52 AM

We provide clients with Write My Essay Services irrespective of the discipline and field of study.Order our Religion and Theology Writing Services that are cheap but doesn’t lack in quality.

Blogger Sophie Grace   August 21, 2019 at 11:57 PM

Thank you so much for sharing this great blog.Very inspiring and helpful too.Hope you continue to share more of your ideas.I will definitely love to read net worth

Post a Comment

<< Home

Finding and Comparing Student Loans 

Tuesday, April 8, 2008

For many of you, taking out student loans is a necessary part of going to college. You're probably already receiving letters and e-mails from student lenders, highlighting the "benefits" of their student loan program. It's no easy task sorting through all your options.

Which Student Loan is Best

Navigating your way through the maze of private student loan options can be difficult, even if you're a math genius. One lender is offering you money back when you graduate. Another lender lowers your interest rate if you set up bill payment by auto-debiting your bank account. How do you decide which student loan is best for you?

Student Loan Marketplace

It just so happens that now has a tool to help you make apples-to-apples comparisons of Stafford, PLUS, and Private loans. It can be difficult to compare loans that may have different interest rates, origination fees, and borrower benefits. Student loans have lots of moving parts and figuring out which option is better for you can be a dizzying task.

Our Student Loan Marketplace makes it easy for you to find a whole bunch of loan options in one place and then compare them side-by-side. We even help you make sense of all the ins and outs by providing a single number called a Loan Cost Index that you can use to make comparisons about which loan may be the best for you.

What is the Loan Cost Index?

Our Loan Cost Index gives you a quick sense of how costly a loan is (in today's dollars). Think of it as kind of like a price tag for a student loan, the lower the number the better. We want to help you become a bargain hunter when it comes to student loans.

Let's walk you through a quick example. You select a student loan with a Loan Cost Index of 125. That means that for every $100 in student loans that you take out, you will be repaying $125 (in today's dollars). Our Loan Cost Index takes into account the interest rate of the loan, any borrower benefits for the student loan, and any upfront fees as well as other factors like in-school and grace periods.

The Loan Marketplace also lets you customize the results. If you want to exclude all borrower benefits, you can. If you plan on making interest payments for your private loan while in school, that's possible, too.

The Loan Marketplace is intended to help you make good decisions when it comes to picking the best student loan for you and your parents.

A Word of Advice about Student Loans

One thing we hope you keep in mind before you start your search for private loans, make sure you take advantage of more affordable funding options first. That includes, searching for scholarships and taking advantage of federal loan programs like Stafford loans. Once you've done that, you're ready to turn your attention to private loans.

Labels: , , , , ,


Blogger Unknown   May 31, 2017 at 3:00 AM

I think it’s possible to get out without student loans if you’re a very careful student, qualify for grants and scholarships, perhaps do work-study, and live modestly while a student. But, it's very difficult assignment for many students and they are not just taking out student loans to cover college costs, but also pay money to different lab report writing services to get a good grade.

Anonymous   November 6, 2017 at 1:30 AM

Hey guys if you want any windows technical support then here on our homepage you will get all windows 10 related problem for your pc.

Blogger Unknown   February 15, 2018 at 2:47 PM

Gracias al Plan Ejecutivo de Cooperación e Intercambio Educativos entre el Ministerio de Educación de la República Popular China y el Ministerio de Educación, Cultura y Deporte del Reino de España, ya hay un programa de becas que ayuda a alumnos españoles que quieren irse a estudiar en China, tanto como alumnos chinos que quieren venirse a estudiar en España. One Person Company Registration India

Blogger writing tips   April 9, 2018 at 1:06 AM

I want you to thank for your time of this wonderful read!!! I definately enjoy every little bit of it and I have you bookmarked to check out new stuff of your blog a must read blog
dissertation Writing Service

Anonymous Visit site   February 28, 2019 at 2:16 AM

Unexpected information. I would add in that 'Exceptional merge is a delight to the eye' too; that is the reason we have every single one of the styles and figure inclinations to make it is a wonderful try for readers. I truly value your hard-working work for bringing this useful. Education contain classic tasks like essay, task, look into article writing and a large number of the students can't finish their assignment well inside the time.

Anonymous recover password   March 5, 2019 at 12:48 AM

You can use any PC without knowing its password remove programs in windows 10. It is very helpful site.

Blogger Mary robinson   March 18, 2019 at 3:20 AM

Thank you for other magnificent post. The place else could anybody get that kind of information in such an ideal manner of writing- Dissertation formatting service

Blogger jacklinemelda   August 20, 2019 at 10:00 AM

When students seek our Nursing Papers Writing Services from us, they never have to worry about the quality of our work. We guarantee all our clients that they will always receive Psychology Papers Writing Service that has been written using relevant information.

Post a Comment

<< Home