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Steps to evaluate a financial aid offer

By Catherine Mueller

March 23, 2023

Once a student has been admitted to a college, the question that often follows for both the student and the parents is how will we pay for it?

That’s where the financial aid offer (sometimes called an award letter) comes into the college planning process.

Now is the time of year when many prospective college students are receiving financial aid offers or award letters. Often these offers arrive via the student’s online portal and the student will receive an email notifying that they have an offer to review. In the past, the financial aid letter was mailed to the student and students need to be aware that some institutions may still follow that process.

Students and parents should review these offers carefully. If multiple financial aid offers are being compared, it’s important to analyze each offer to determine which college is offering the most financial aid to the student.

Here are some steps to evaluating the offer:

1. Use a tool to help you evaluate the financial aid offer(s). Mapping Your Future offers a “Comparing Cost of Attendance” tab on its Scholarship Tracking Sheet to help you evaluate a financial aid offer.
2. Make sure your information on the offer is correct. This is important because it could impact your costs as well as the amount of financial aid you are offered. For example, in addition to making sure your name or other personal information is correct, check that the offer includes your dependency status (dependent or independent for financial aid purposes), your program of study or major if chosen, and the type of housing you have selected (on-campus, off-campus, or at home with family). This is usually information pulled from your FAFSA (Free Application for Federal Student Aid).
3. Determine the total cost of attendance. The offer should provide information about the estimated cost of attendance. This includes tuition and fees; housing and meals; books and supplies; and personal and miscellaneous expenses. Make a note of that estimated total cost of attendance. Also, contact the financial aid office if you feel this estimated cost of attendance doesn’t accurately reflect your costs. For example, you may have higher transportation costs or personal costs, such as medical costs or insurance.
4. Check the total amount of financial aid offered to you and compare that to the cost of attendance. Before accepting any financial aid, determine what type of aid is being offered, if there are any requirements to be met, or if it must be repaid. In the “Comparing Cost of Attendance” tab on the Scholarship Tracking Sheet, list state aid, federal grants, federal loans, and scholarships. Grants and scholarships typically don’t have to be repaid but can come with requirements. Sometimes, if those requirements are not met, the grant or scholarship will have to be returned or can turn in to a loan that has to be repaid.
5. Analyze the types of aid and determine what you want to accept. If you don't want to owe any money for your education, you don't have to accept loans. Or if you don’t want to meet certain requirements (some scholarships may require that you live or work in a certain area), you don’t have to take the scholarship. However, while you don’t have to accept all the aid being offered, it could mean you have more out-of-pocket expense at that college.

If the student is considering more than one institution, the analysis of the financial aid offer may reveal some important insights. For example, sometimes a college with a higher cost of attendance may have less out-of-pocket expense for the student because of the amount of scholarships or institutional aid being offered.

In any case, an analysis of the financial aid offer is important for all students and parents to have a clear understanding of the total cost of an education.