Review your award letter and accept aid
Your award letter, also known as a financial aid offer, outlines the financial aid package being offered to you.
Your award letter provides you with information about your school’s cost of attendance and the financial aid the school has awarded to help you pay these costs. Your award letter also may show how your college calculated your financial need:
- Expected Family Contribution (EFC)
- Estimated financial aid
* Some schools may not be able to provide enough financial aid to cover your financial need. This is often referred to as unmet need or gap. Some schools will attempt to reduce the unmet need by including loans or underestimating costs.
Your award letter provides a term-by-term breakdown of your aid, according to type, amount, and source. It also may include information about the terms and conditions of each award.
It is important to know how the school will distribute your award letter. For example, some schools provide the award letter online through a secure web portal. Others may provide it via e-mail or postal mail.
You need to determine if you are required to take action upon receipt of your award letter. Some colleges will require you accept, decline, or reduce each aid source. Others may “auto-award” and not require any action on the student’s part. If you do elect to reduce or decline any aid sources (loans, work study, etc.), the school will not be able to increase other aid sources to compensate for the difference.
What’s the bottom line?
Since award letters can vary from school to school, it will be easier if you compare them based on the bottom line (or out-of-pocket) costs. You can determine the bottom line by:
- Estimated free financial aid
* If your award letter does not contain your cost of attendance Cost of attendance can vary from school to school and typically includes tuition, fees, housing, books, supplies, food, transportation, and other educational-related expenses. , check the school’s financial aid website for further information. You also may want to increase or lower certain components in each cost of attendance to match your personal situation. For example, if the school estimates $10,000 for housing, and you know that your housing choice will be greater or less than their estimate, you need to make those adjustments into the cost of attendance.
As outlined above, only FREE financial aid Grants, scholarships, etc. that do not have to be repaid. is included in this calculation. This allows you to determine how much the student and their family must pay, earn or borrow to cover their TRUE unmet financial need. Since FREE financial aid can vary from school to school, this calculation will also vary. When comparing the TRUE unmet financial need between one school and another, if the difference is minimal, then it should not impact the student’s choice.
A higher bottom line will lead to a heavier work burden and greater student loan debt. Both of which can affect you as you pursue higher education. A higher debt level can impact whether or not you complete college, your future career goals, and lifestyle as you transition into adulthood.
You can reduce some higher education costs to help lower your bottom line.
Determining award types
Some schools use acronyms to identify aid sources on your award letter. These acronyms can make it hard to tell the difference between FREE financial aid sources and sources that require repayment. It’s important to research the different aid sources to help you make the right choices when determining what aid to accept, reduce, or decline.
Grants and scholarships
Some schools may offer more grants and scholarships to initial students versus returning students. This process is known as “front-loading” and is often done to entice students to choose their school over another. Students should review awards carefully and determine if the grants or scholarships are renewable or a one-time offer.
Since award letter formats are distributed annually and can vary from school to school, you may find it difficult to compare them on your own. If you are having difficulty, there are FREE comparison tools available online to assist you in your review, such as:
The most common loan types include:
- Direct Loan (subsidized), also may be referenced as a Stafford Loan
- Direct Loan (unsubsidized), also may be referenced as a Stafford Loan
- Federal Perkins Loan
- Direct PLUS Loan for parents, also may be referenced as a parent PLUS Loan
- Direct PLUS Loan for graduate or professional students, also may be referenced as a Grad PLUS loan
- Health Professions Student Loans
- Federal Nursing Student Loans
- Private (or alternative) loan
- TEACH Grant (a grant which converts to a loan if the eligibility criteria is not met)
Award letters often include non-need based loans such as the unsubsidized Direct Loan or the Direct PLUS loan for parents. While students and their families are eligible to receive loans, students are not obligated to accept those awards. After careful review of the award letter and determining the bottom line, you can determine whether to accept, reduce, or decline the loan awards. It is important that you borrow conservatively throughout your education. Living like a student while you are in school ensures that you won't live like one after you graduate!
Even when awards are identified as loans, research which loan is the right fit for you! You want to look for loans that are cost effective with reasonable repayment terms. Don’t overborrow, you can decline any aid you are awarded. Use the debt/salary wizard to determine an acceptable amount for you to borrow.
Federal Work-Study is a form of student employment that also may be included as an aid source. If you are offered work-study and accept the award, there is no guarantee that you will be appointed to a position or earn the full award amount indicated on the award letter. Students who are interested in Federal Work-Study should contact the Financial Aid Office for more information.