How to Break Down Financial Aid Award Letters

And have a better understanding of what it all means.

First things first, contact your student’s financial aid office

Looking at award letters can be tricky.

Brendan Williams, Director of Knowledge at uAspire, a Boston-based nonprofit that provides free financial aid advice to students and their families, says to contact the school if you don’t understand something. One call to the financial aid office can help you better understand costs, the delivery methods of financial aid updates for future reference, and any possible financial needs that might not be covered in the initial award letter. 

Since awards letters are offers of financial aid to students, you don’t have to accept anything you don’t want. So ask a lot of questions about the types of aid that are being offered. If you are still deciding between colleges and comparing financial aid offers, a good resource is the Consumer Financial Protection Bureau’s Compare Schools tool. The tool allows families to compare three schools at a time based on financial aid offers. While you should compare school costs, William recommends erring on the side of caution when communicating with different schools and disclosing your student’s award letter to ask for more money. He says that while most schools do not care about what another school is offering, if they do ask, you need to be able to show them. Also note that the amount of money awarded to students must be accepted by the student and guardian before the funds can be distributed. If a young person does not have a guardian to help them go over their letter, Williams recommends they talk with their high school counselor. “It’s important to review the award letter and talk to someone who is familiar with the process. Without that you won’t be able to identify errors, or details.” 

Next, estimate the net price and cost of attendance

The cost of attendance is the total sticker price of the school, including room and board, meal plans, transportation, health coverage and a host of other fees.

The net price is the amount of money students and families are responsible for paying after financial assistance like scholarships and grants are subtracted from the overall cost. When going over the award letter and breaking down tuition costs, the Department of Education’s College Shopping Sheet is a resource that allows you to map out and break down the facts and figures from award letters for a better understanding of what is being offered and what you will need to pay. 

Identify the types of aid you’ve been awarded

Take a look at the total financial aid awarded to the student. This is also referred to as your financial aid package.

In this package there are different sources of financial aid offered to students. Money offered in packages is intended to offset the costs of tuition, including the expected family contribution. Here are the possible types of aid you might receive and see listed on the letter:

Ask More Questions

Before you and your student accept a financial aid offer, make sure that you get the answers to any questions you might have, whether it’s the terms of agreement for money that is being borrowed or the cost of the school over the course of four years.

Here are some questions you can ask financial aid counselors:

  1. How can I appeal for more financial assistance?

  2. Does the cost of attendance change annually?

  3. What are the requirements to qualify for in-state tuition?

  4. What are the conditions of the institutional scholarships?

  5. Will my financial aid package look different next year?

  6. What is the average debt students acquire while attending this school?

  7. Do you have information about outside scholarships?