Financial Aid Award Letter
Your financial aid award letter isn’t just paperwork — it’s the difference between a school you love and one you can actually afford. A strong financial aid package can open the door to your dream school, while a less-than-stellar one might make you question whether the investment is worth it. Understanding your financial aid letter is crucial to assessing the true financial commitment you’re making. However, these letters can be difficult to interpret, as they contain a lot of complex information about your financial aid offer.
College financial planning isn’t easy, but understanding your financial aid letter can be. In this article, we will go over what a financial aid award letter is and how to read one. Specifically, we’ll explore:
- Different types of financial aid, including the difference between need- and merit-based scholarships
- When and how you’ll receive an award letter, and what to expect when you do
- Two example financial aid award letters
- How to get the best financial aid package from your college of choice
- Seven tips for deciphering your financial aid letter, and more!
By the end of this guide, you’ll have the tools to confidently navigate your financial aid letter and make informed decisions about paying for college.
Congratulations on Your College Acceptance!
Getting accepted to college is an amazing achievement, so take some time to celebrate this huge milestone! Once you’ve enjoyed the moment, however, it’s time to read the fine print.
Financial aid award letters can either arrive with your acceptance or follow a few weeks behind. Continue to check your email and financial aid portals, as schools use different methods to deliver financial aid award letters.
If you are fortunate enough to have acceptances from multiple schools, you can compare financial aid packages side by side. Just be careful because award letters can vary from school to school. Therefore, you may not see the same information, in the same format, on each one.
Although there are many different numbers to consider in any financial aid award letter, the most important one is the net cost of attendance. This number represents the total cost of attendance minus any costs covered by your financial aid package. Basically, it represents the amount you and your family are responsible for paying to the school.
The more generous the financial aid package, the lower your net cost of college will be. So, it is vital to read your financial aid offer carefully. That way, you’ll know exactly what is being provided in your financial aid award letter and what you will be responsible for paying.
Financing Your College Education
Attending college has many costs; some of which are direct costs, like tuition, room and board, and fees. These are fixed costs, making them easier to budget and plan for. However, there are indirect costs that you need to factor into your budget. These can include meal plans/groceries, furniture, school supplies, entertainment, healthcare, and transportation, to name a few.
Over four years, these college costs add up — no matter what school you are attending. Financial aid is the best way to lower those costs and bridge the gap between your family’s budget and the total cost of attendance.
The term financial aid covers a variety of methods for reducing the cost of college, including loans, grants, scholarships, and the federal work-study program. Loans are the least desirable form of financial aid as they must be paid back with interest. If you do need to take out loans, federally backed Stafford loans are preferable to private loans thanks to more flexible repayment terms and lower interest rates.
Grants and scholarships are excellent sources of financial aid as you don’t need to repay them. These types of “gift aid” can be further divided into two distinct categories:
- Need-based scholarships are awarded at least in part based on a student’s financial situation.
- Merit-based scholarships are awarded based on a student’s achievements, rather than financial need.
Finally, many financial aid letters contain money from the federal work-study program. This program provides eligible students with part-time, federally funded jobs during college. These positions can be either on or off campus and generally allow for students to work up to 20 hours a week while pursuing their education.
Understanding Student Financial Aid
As we have discussed, financial aid represents a college’s commitment to making higher education accessible and affordable. Some colleges even commit to funding students’ educations without the use of loans, though this is typically reserved for students with the most financial need. So, let’s talk about the types of aid you might encounter when you log into your financial aid portal.
Financial aid comes from a variety of places, including colleges and state, federal, and private sources. Federal aid includes Pell Grants, Direct Subsidized and Unsubsidized Loans, PLUS Loans, and the federal work-study program. Logically, residents of the state receive state aid. In many cases, you can only apply state aid to in-state colleges. Institutional aid includes school scholarships, endowment funded grants, and any other money coming directly from the college itself.
In order to be eligible for any kind of financial aid package, you and your family must fill out the FAFSA. Many colleges, mostly private universities, also require an additional form called the CSS Profile. Together, they use your FAFSA award letter and information from the CSS Profile to determine your total financial aid package.
Filling out the FAFSA as early as possible is an excellent way to get started with the college financial planning process. The form requires you to report important tax and income information, so make sure that both you and your parent(s) create logins to fill out the FAFSA together. Failing to document income sources can lead to delays in processing your FAFSA award letter.
Once your application has been processed, each school will receive a copy of your FAFSA award letter. You’ll then need to wait for your financial aid letter to arrive. This period of time is a great window to apply for local scholarships in your area!
What is an Award Letter?
After the issuance of the FAFSA award letter and your acceptance to college, the financial aid office will send you a financial aid award letter. Depending on the school, this letter comes by mail or posts digitally to your financial aid portal. Be sure to check for emails from your colleges with login information for your financial aid portal so you can see your financial aid letter as soon as possible.
Your financial aid award letter contains lots of important information about the types of financial aid you qualify for, as well as the total amount of aid being given. Typically, the letter lists types of aid along with the amount coming from each source. To calculate the total amount of aid you will receive, you may need to add the numbers on each line together. However, most schools will list the sum total at the bottom of the financial aid letter.
If you have financial aid award letters from multiple schools, it can help to compare them side-by-side. However, do not simply look at which school is offering more financial aid than the other. You must factor in the types of aid each school offers, and what your total net cost comes out to.
How do I get my financial aid award letter?
The financial aid process begins with filling out the FAFSA, which all colleges require for you to receive federal financial aid. Each college then uses your FAFSA award letter to create a unique financial aid package for you based on your family’s calculated financial need and their total cost of attendance. As previously stated, you may also need to submit the CSS Profile to qualify for financial aid.
Financial aid award letters only go out to accepted students, so you’ll need to wait until you receive your letter of acceptance. Once you’ve received your acceptance, your award letter will be posted to your financial aid portal or sent to you via mail or email.
It’s important to remain in contact with your school’s financial aid office and pay attention to digital notifications via email or the school’s financial aid portal. More and more schools are now using a financial aid portal rather than mailing award letters. So, don’t be surprised if your financial aid package is only available digitally.
When will I get my Financial Aid Award Letter?
After you apply for financial aid via the FAFSA and CSS Profile, you must wait for the college financial aid office to process your application. Typically, colleges send out financial aid award letters soon after notifying applicants of their acceptances — but every school is different.
Your application deadline affects the timing of your financial aid award letter. For instance, students applying Early Action to MIT can expect to receive their financial aid offer in mid-January. Students applying Regular Action won’t get theirs until mid-March.
If you have not received your financial aid award letter either by mail or through a financial aid portal, check with your school to see if there are any delays with processing your application. You may have been selected for verification and need to submit additional documents, or you might have missed a step in completing the process.
What to expect from your Financial Aid Award Letter?
One sometimes frustrating aspect of the financial aid process is the lack of consistency in financial aid letters. However, while colleges do not always use the same labels or formats for their financial aid award letters, there are a few features you can expect to see on any financial aid letter.
Typically, the letter lists total cost of attendance near the top, which represents the amount of money paid to the college. Some colleges list the total cost by year, others by semester, so make sure you examine this figure closely. Below that you can expect to see a breakdown of the financial aid package created by the colleges based on your FAFSA award letter. Finally, the letter will typically list the net cost near the bottom, which represents the amount you and your family will need to cover after applying the financial aid.
The size of your financial aid package depends on many factors and will vary from school to school. Some higher priced private colleges offer significantly higher aid packages, which can bring their cost down to that of a public university. Schools may offer higher aid packages to students with especially strong applications, who they would like to attract to their campus. They may also calculate your family’s financial aid differently depending on how they interpret the data from your FAFSA award letter.
If you think that you are getting a less generous financial aid offer than you deserve due to extenuating circumstances, you can file an appeal letter for financial aid. (We’ll talk about this in more detail when we answer the question, “Can I appeal my financial aid award?”)
Why is it important to read a financial award letter in detail?
In order to fully understand the contents of your financial aid award letter, you need to read it carefully. As we have discussed, there is no standard format for a financial aid award letter, so one school’s letter will not necessarily look exactly like another’s.
Pay attention to both the amount of aid being given and the type of aid. If there are loans, look at what type of loans they are and their interest rates. Finally, be sure to look at the costs the school expects you and your family to pay, especially as you compare offers from multiple schools.
Failing to read the letter carefully could result in you misinterpreting your expected family contribution. You might also miss important details about how to accept the various contents of your financial aid award letter, including login information for your financial aid portal.
It is also important to understand that you must manually accept every aspect of the financial aid award letter that you wish to receive, and can decline portions of the award that you don’t want to receive (such as loans). You should plan to take any money from grants or scholarships that don’t need to be paid back. Only accept loans if you understand the terms and are able to pay them back in a timely manner.
Is financial aid awarded per semester or year?
Most financial aid awards are given on a yearly basis, covering either two semesters or three quarters, depending on the school. Typically, schools disburse aid on a semester or quarter basis so it lines up with payments that need to be made to the school. It is important to budget effectively around these payment dates so you can make the best use of your financial aid funds.
One other important aspect of the financial aid process is that students must reapply for financial aid each year. This is important because you need to fill out a new FAFSA form every year and will receive a new FAFSA award letter with each new application you fill out.
Typically, unless there is a significant change in your family’s financial situation, you can expect to receive similar financial aid awards each year. However, schools don’t always guarantee financial aid from one year to the next. To ensure you remain eligible, talk with your school’s financial aid office about any requirements for maintaining scholarships or other types of aid.
Understanding Your Financial Aid Package
When you are evaluating your financial aid packages, you should first look for the total cost of attendance. Though the cost of college contains many indirect and direct costs, your financial aid letter should specifically highlight the direct costs (like tuition and fees) that you would pay directly to the college.
After checking the cost of attendance, you should subtract the sum total of the financial aid from this number to determine your Expected Family Contribution, the amount you are responsible for paying to the college.
Keep in mind that the Expected Family Contribution does not include loan repayments; even though they may be a part of the financial aid package, you will still have to repay them eventually. Therefore, the type of aid you are receiving is just as important as the amount. The more grants and scholarships you receive as part of your financial aid package, the fewer loans you will need to take, and the lower your Expected Family Contributions will be (both in the short and long term).
What does a financial aid award look like?
Understanding your financial aid package may seem like a daunting task. However, financial aid award letters aim to break down your financial aid offer into more digestible parts. There may be slight variation among schools, but generally, each financial aid letter you receive will include the same sections.
Let’s break down a financial aid offer from MIT to understand the typical format of a financial aid award letter.
Sections of a Financial Aid Award Letter
Costs paid to the school
This section includes costs such as tuition, housing, meal plans, and student fees.
Costs paid to others
Here your letter will provide an estimate of additional college costs such as transportation or books.
Resource information
This is a breakdown of what the university believes your and your family can reasonably contribute. It consists of a student contribution and a parent contribution.
Offer information
In this section, you’ll see your financial aid offer, broken down by semester.
Grants and scholarships
Here you’ll see federal grants and school scholarships. This section won’t include outside scholarships and grants.
Net price.
This is the cost of attendance after the school applies your financial aid offer.
Loans.
You may see a section with federal subsidized loans. The net amount is what you’ll receive after a processing fee has been charged. Note that not all universities include loans in their financial aid offers.
Student employment.
In MIT’s letter, this section includes a suggested amount that students can earn while working throughout the year. Typically, this is through a federal work-study program. However, at MIT, research might also be included as work. This section aims to lighten student loans.
Keep in mind that a student award letter basically includes your FAFSA award letter. Of course, you can also check your FAFSA status on their online financial aid portal. But if you have your financial aid award letters on hand, your FAFSA funding (or FAFSA award letter) should be reflected on each letter. FAFSA also has online resources to help students and parents understand the FAFSA award letter and federal funding process — check them out!
Financial Aid Award Letter Sample
As we mentioned, each financial aid award letter may vary slightly. In general, though, financial aid award letters outline your financial aid award and the cost your family needs to pay.
To get a better understanding of how to read these letters, let’s look at two samples of award letters. These are actual letters that students received from schools, breaking down their financial aid offers.
Financial Aid Award Letter Sample #1
In our first financial aid award letter sample, we can see the following sections broken down:
- Estimated cost of attendance
- Scholarships and grants
- Loan eligibility
- Federal work-study program eligibility
- Estimated payment required from the student
- Estimated indirect costs
In this case, after everything, the student and their family owes the school just under $20,000 a year. This is an example of a very thorough financial aid award letter.
Financial Aid Award Letter Sample #2
In our second sample financial aid letter, we can see a similar breakdown, displayed in a different manner. This letter only lists the cost of attendance, grants and scholarships, and loans.
At first glance, this letter doesn’t seem to include the total cost due. However, if we look more closely, we can determine the Expected Family Contribution by looking at the section containing loans. In this case, the student and their family owes the school just over $33,000 a year. Whether or not they take out Federal loans to cover that cost is going to be up to them.
What happens after you receive your financial aid award letter?
Now that you’ve received your financial aid package and your financial aid award letter — what do you do next? Well, you’ll need to determine if the financial aid package works for you and your family.
First, you’ll need to compare all of your offers from your schools. However, as previously mentioned, financial aid award letters don’t necessarily go out at the same time. Letters can be released on a rolling basis, depending on when students submitted their FAFSAs. Therefore, you’ll need to wait to have all of your offers before determining which is the best option.
Each school will have a deadline for accepting or declining your financial aid offer. If your letter doesn’t specify this deadline, you can check the financial aid office website for details, or contact them if necessary. You should also contact the office if you need clarification on your financial aid award letter.
The deadline to accept or decline a financial aid package often coincides with the enrollment deadline. Some schools accept electronic signatures, while others require students to mail in a physical signature. These requirements can affect your specific deadline, so be sure to review and meet all necessary deadlines carefully.
Can I appeal my financial aid award?
Yes, you can absolutely appeal your financial aid award. If your family’s financial circumstances have changed since you submitted your application — for instance, due to unexpected medical expenses or a significant shift in household income — you have the option to submit an appeal letter for financial aid. In cases like these, your existing aid package may no longer reflect your current financial need and could be reassessed accordingly.
That said, even if your situation hasn’t changed dramatically, you might still need additional aid in order to attend. While many schools have specific guidelines or forms for submitting an appeal, it’s always worth reaching out to the financial aid office to discuss your options. The worst they can say is no — and you might be surprised by what’s possible.
To appeal your financial aid offer, you’ll need to first contact the school’s financial aid office to understand their appeal process. Generally, you’ll need to gather official documents that show the change in you and your family’s financial circumstances. These will vary on an individual basis, but they could be tax returns, medical bills, or even letters from employers.
Then you’ll need to write a formal appeal letter for financial aid. You should be concise and formal, but also specific about your current financial circumstances. You should explicitly mention any changes in finances. Clear documentation and a detailed explanation of your change in circumstances will greatly strengthen your appeal letter. For more tips, check out our webinar on how to craft a compelling appeal letter for financial aid.
Comparing School Financial Aid Offers
The cost of college is an important factor when deciding which school to attend. You might have an appealing financial aid award letter from one school, and an underwhelming one from another. Therefore, you should compare each financial aid letter and financial aid package to see which makes the most sense for you.
When analyzing each financial aid award letter, focus on comparing net cost and loans rather than how much aid you were offered. Since all financial aid award letters don’t include loans, think about how much you’re willing to take out in student loans. Consider the interest rates on federal and private loans, and what your long-term cost could be. Many students prefer to take out less in loans and graduate with less debt.
Let’s consider a hypothetical situation. School A has sent you a generous financial aid award letter, with a seemingly better financial aid package than School B. But School B’s package has zero loans, and School A’s financial aid award letter includes loans. In the long run, School B might be the better choice if you’re able to cover your remaining cost without loans.
Making your decision!
Your financial aid package and FAFSA award letter play a huge part in your college financial planning. Indeed, your financial aid award letter will help you make an informed decision on which school is the best option financially.
Remember to look at the type of financial aid you’re getting in your financial aid award letter. It may not benefit you to take a financial aid package with many loans. However, if a school gives both need- and merit- based aid with few student loans, then that is much more manageable.
Of course, you need to consider both the academic fit of a school and its financial aid package. Make sure that the school you choose not only has a good financial aid package, but also suits your academic and personal goals.
Some students and families justify a minimal or nonexistent financial aid offer by the supposed return on investment of the education. While attending a top university may lead to a higher paying starting salary, that’s not always the case. What you earn upon graduation will have a lot to do with the major you choose and your ability to secure a job offer.
Consider what having thousands of dollars of debt upon graduating will do to your future. Will you be able to make payments with your dream job? Or will you be struggling month after month to minimize your debt?
If you have any doubts about your school and FAFSA award letter, ask a counselor at your school’s financial aid office. Remember, they are there to help you understand your options!
How do I accept my financial aid award?
You get to choose what types of financial aid to accept in your financial aid award letter. When you get an offer, you should first accept money you won’t have to pay back. The last option you should consider are federal student loans. And you don’t need to accept all of them — think about what you absolutely have to take out, and consider their interest rates.
Once you’re ready to accept your financial aid offer and enroll in a school, the process isn’t too complicated. Your financial aid award letter will likely give you a deadline to either return the letter signed or submit an electronic signature. You’ll also have to indicate which aid you’ll be accepting.
Most schools accept your grants and scholarships automatically, since you don’t need to pay them back. However, you’ll need to accept or reject loans, and this process can differ based on the type of loan. In your FAFSA award letter, you’ll receive federal loans. In order to accept them, you’ll need to sign a Master Promissory Note (MPN). This legal document assures you’ll pay back the loan as well as any interest accrued. School and private loans will have different processes, so check with your loan provider for next steps.
Be sure of deadlines when considering your financial aid award letter. You’ll likely need to accept an offer through a school’s financial aid portal. So be sure you have your financial aid portal login and your financial aid plan ready by the school’s deadline. If you’re ever unsure of processes or deadlines, contact the school’s financial aid office directly.
How long does it take to get your financial aid?
Once you accept your offer on the financial aid portal, you might be wondering when you’ll actually get that aid. Most colleges will make financial aid disbursements at the beginning of every semester or quarter.
On the other hand, you’ll need to pay your balance prior to the start of each semester as well. Exact deadlines may vary depending on the school. Some schools also offer monthly tuition payment plans. However, you should inquire about that prior to accepting your aid to be sure that it’s an option at your chosen college.
Students may also get a “refund” after receiving their aid. Refunds are money left over from your aid after everything has been paid. Students can use this money for their books and other expenses. Legally, schools can’t distribute this money until 10 days prior to the start of the semester. You also may not receive a refund — it depends on your financial aid award letter as well as the aid you accepted.
Additional Options for Financing Your College Education
If your expected contribution is still too high, there are ways to find funding beyond your financial aid award letter. These can include private loans, family savings, and even employer tuition reimbursement programs. Be sure to research every option when deciding whether to accept the financial aid package in your financial aid award letter.
External need- and merit-based scholarships are an excellent way to supplement the cost of college. There are plenty of local awards out there, plus these scholarships tend to have less competition than more well-known, prestigious awards. You just need to do some digging to find viable scholarships for you.
Keep in mind that new scholarships become available all the time. So, don’t stop searching at the start of your freshman year in college. You might become eligible for an excellent scholarship as a sophomore, junior, or senior!
7 Tips for Deciphering Your Financial Aid Letter
Deciphering your financial aid award letter can feel overwhelming. However, the aid you accept is a crucial part of college financial planning and your life post-graduation. Therefore, you should fully understand your financial aid award letter, as well as the terms of the aid you choose to accept.
7 Tips to Understanding your Financial Aid Letter
1. Focus on your expected contribution, not just the total aid amount.
It may seem exciting when you see you’ve been awarded thousands of dollars. However, the cost of college is high. Therefore, be sure you understand what you and your parents will need to pay in the end.
2. Separate gift aid from self-help aid.
Gift aid is money you don’t have to pay back, such as grants and scholarships. Self-help aid comes from loans or work-study. Understand which type of each aid you’re receiving in your financial aid award letter.
3. Review all terms carefully, especially for loans and work-study.
Know how much interest your loans will accrue as well as how you’ll be paying them back. Additionally, be sure you understand how to sign up for work-study, and how many hours you’ll receive.
4. Check if aid is renewable — and under what conditions.
Most students attend college for four years, so you’ll want to make sure your financial aid offer stays relatively consistent. Ask about requirements for any renewable academic scholarships or grants.
5. Confirm all expected scholarships and benefits are included.
Outside need- and merit-based scholarships are often left off your initial financial aid letter. Be sure that you understand to apply those forms of aid to your balance — most scholarships have their own terms and processes.
6. Compare offers from other schools to understand net cost.
Figure out which school offers the best financial aid package for you and your family. Consider loans vs. scholarships and your net cost after you apply all of your aid.
7. Ask questions if anything is unclear.
Most schools will have a financial aid portal within your student portal for accepting aid. However, each school may have a slightly different process or deadline. If you’re unsure of anything, ask the school’s financial aid office directly.
If you’re still waiting on financial aid, be sure to bookmark this article and come back to it once you’ve received all of your award letters!
Financial Aid Award Letter – Final Thoughts
Getting accepted to college is exciting, but understanding your financial aid award letter can be confusing. Still, it’s important to clearly understand the types of aid you’ve been offered, as these decisions can impact your financial future both during and after college.
In this article, we explored what a financial aid award letter is, how to get one, and what it entails. We highlighted the value of minimizing loans and maximizing gift aid, as well as the possibility of appealing for a more substantial financial aid package. We also discussed the importance of comparing financial aid offers to find the best package for you.
Remember, after accepting your aid package, you can track your funding through your school’s financial aid portal. Federal and private loan providers will also have separate financial aid portals where you can review loan terms, eligibility, and other important details.
If you want personalized support in reviewing and selecting your financial aid package, CollegeAdvisor is here to help. From applying for aid to understanding your award letter, our expert advisors have extensive experience guiding students and families through the financial aid process.
This article was written by Sarah Kaminski and Alex Baggott-Rowe. Looking for more admissions support? Click here to schedule a free meeting with one of our Admissions Specialists. During your meeting, our team will discuss your profile and help you find targeted ways to increase your admissions odds at top schools. We’ll also answer any questions and discuss how CollegeAdvisor.com can support you in the college application process.
