Your Guide to Evaluating Financial Aid Offers

portrait of Victoria Hudgeons
by Victoria Hudgeons
Published on September 28, 2021 is an advertising-supported site. Featured or trusted partner programs and all school search, finder, or match results are for schools that compensate us. This compensation does not influence our school rankings, resource guides, or other editorially-independent information published on this site.

Ready to start your journey?

Your Guide to Evaluating Financial Aid Offers

A Note from BestColleges on Coronavirus and Financial Planning in College

The COVID-19 outbreak has caused rapid and significant changes in students' lives. Campus closures have pushed students to online learning, and life after graduation is uncertain for many.

Saving money and budgeting in college is top of mind for many students, even in the best of times. Our Financial Aid Guide can help you understand and plan your finances in college.

We are also working to provide information and resources to students about the impact of coronavirus on college life. Read our latest Coronavirus Resources for Students.

We encourage students to contact their college's financial aid office for any financial questions related to coronavirus. Many services have moved online as schools work to support students through this challenging time.

If you complete a Free Application for Federal Student Aid (FAFSA), you can expect to receive financial aid award letters in the mail from colleges and universities that accept you.

In this article, you can learn how to read and compare these financial aid award letters, determine the difference between common financial aid sources, and decide what questions you should ask each of your prospective schools.

What Is a Financial Aid Award Letter?

A financial aid award letter helps students and their families understand the cost of attendance at a particular school. There is no standard award letter format, but all letters contain the same fundamental components.

Your cost of attendance (COA) provides an estimated total for tuition, fees, room and board, books, and other supplies. Letters also list your available sources of financial aid, including federal loans, grants, scholarships, and work-study programs. Letters may also state your estimated family contribution (EFC).

Award letters reflect information for only one year of attendance. Students receive new award letters each year they apply for aid.

Frequently Asked Questions

How do I get my financial aid award letter?

To receive a financial award letter, you or your parents must fill out the FAFSA using information from previous bank statements and tax returns. Schools may request or require submission of additional documents to fully process financial aid applications.

What does a financial aid award letter mean?

Receiving a financial aid award letter means you qualify for monetary assistance to help cover the costs of tuition, fees, books, and supplies at a prospective college. These documents may also be called "financial aid packages," "financial aid offers," or "award letters."

How long does it take to get a financial aid award letter?

Colleges typically mail out award letters around the same time as acceptance letters. Delivery times may vary depending on when you submitted your FAFSA and each school's individual processing time. Contact financial aid departments for specific information.

What information is listed in a financial aid award letter?

Your financial aid award letter breaks down your total estimated COA for the year, the types and amounts of federal financial aid you qualify for, and how much money your family is expected to contribute.

What is the average financial aid package?

According to CollegeBoard's 2018-2019 data, undergraduate students received an average of $15,210 in financial aid. However, financial aid packages can vary widely based on an individual's income and assets, as well as the estimated costs at a specific school.

When Will I Receive My Financial Aid Award Letter?

According to the U.S. News & World Report, financial aid award letters may arrive anytime between October and April. The timing generally depends on two primary factors: when you submit the FAFSA and the individual processing schedule of a school. Each year, families can submit the FAFSA starting on October 1st.

How Do I Read My Financial Aid Award Letter?

If you receive financial aid award letters from more than one school, the formatting may look different, but each letter should have the same general components.

true Cost of Attendance

The COA listed on your letter is not the amount billed by the school. Rather, it provides an estimation of total expenses, including tuition, fees, on-campus room and board, books, supplies, and transportation.

Estimated Family Contribution

Despite the connotation of the word "expected," an EFC is not the amount of the money your family is required to pay for college. The EFC measures your family's financial strength. Schools use this estimate to calculate a student's eligibility for certain types of federal financial aid.

Awarded Aid

Your letter likely includes a list of several financial aid sources. Loans require repayment, while grants and scholarships do not. Federal work-study programs provide students with part-time jobs while they are enrolled at school.

You may also receive a college financing plan. These standardized U.S. Department of Education forms break down expenses and aid, allowing for simplified understanding and comparison between schools.

What's the Difference Between a Loan and a Grant?

The federal government provides loans and grants as forms of financial aid. Loans require repayment of the principal as well as interest. Grants require no repayment, except in certain circumstances, such as program withdrawal, a change in enrollment status, or a change in financial need.

What's the Difference Between a Scholarship and a Grant?

The federal government provides grants based on the financial need of a student's family. Scholarships — commonly awarded by individuals, organizations, and businesses — may be based on need and/or merit. Additionally, other eligibility requirements commonly apply for scholarship recipients, such as minority status, academic major, or organizational affiliation.

What Questions Should I Ask About My Financial Aid Package?

Award letters primarily focus on numbers — usually without detailing aid terms or disbursement. To learn more about your aid package, consider reaching out to your prospective school with the following questions:

Schools try to provide a comprehensive COA estimation, including tuition, fees, room and board, books, transportation, and other common personal expenses. However, some costs, like mandatory student health insurance, may not be factored into that total.

Grants and scholarships may seem like free money, but they usually come with strings attached. Understanding these terms can help ensure you receive the full value. You should know whether awards are contingent on academic performance, enrollment status, or other factors. Be sure you understand how each scholarship or grant will be allotted and whether any awards are renewable for future academic years.

To ensure future financial stability, student borrowers must fully understand the terms of any loan before signing on the dotted line. Ask for specifics about interest rates (the amount and whether it is variable or fixed), the possibility of deferment (whether or not you can wait until after you graduate to start paying off the loan), and how long repayment will take.

To qualify for work study, students must demonstrate financial need and complete the FAFSA by the priority filing deadline. Students who receive a work-study job work up to 19 hours each week while classes are in session. Hourly pay rates vary by job, employer, and total award amount. Unlike other forms of financial aid that apply directly to tuition costs, work-study students usually receive payments directly.

Deadlines to accept financial aid offers vary. Schools may maintain firm acceptance deadlines for all financial aid or for select grants or scholarships. Check with each of your prospective institutions about their deadline requirements. Once you have accepted aid, you need to meet certain requirements to receive it. These requirements usually include maintaining full-time enrollment, academic progress, and a qualifying GPA. If need be, many forms of aid allow students to take semesters off with minimal financial consequences.

Aid usually starts to be disbursed one week prior to the first day of the semester. Although most financial aid awards apply to an entire academic year, funds are distributed on a semester basis. If you receive a $4,000 Pell Grant, for example, you can expect to receive $2,000 each semester.

How Do I Compare Financial Aid Offers?

Take the time to carefully compare all of your financial aid offers. You should subtract the amount of gift aid (grants and scholarships) from the school's estimated COA. This provides you with an estimated net cost, i.e., the amount you would need to take out in loans or pay out of pocket to attend.

You should also compare each individual loan offer listed in your award letter. Consider interest rates, repayment plans, grace periods, and whether the loan is subsidized or unsubsidized.

This online tool from the Consumer Financial Protection Bureau can help you compare financial offers from multiple schools.

How Do I Know If a Financial Aid Offer Is Good or Bad?

Determining whether a financial aid package is good or bad largely depends on how your EFC compares to your estimated out-of-pocket costs. A school that provides a large financial award may still carry a significantly higher net cost than your calculated EFC. This generally equates to a poor aid offer.

How Do I Accept or Reject My Aid?

You can accept or reject any part of a financial aid package. When accepting aid, keep borrowing to a minimum. Prioritize scholarships, grants, and work study over student loans.

Accepting or declining aid generally requires filling out an online or paper form. Additional steps may apply to accept grants and loans. Your school provides directions in your award letter.

Can I Ask a School for More Money?

If your school's net cost is significantly higher than your family's expected contribution, you can appeal for additional aid. Students interested in appealing their aid package based on financial need should contact the financial aid office of their prospective school. Students may also contact the admissions office to request an increase in scholarships or other merit-based funding.

To effectively state your case to the school, utilize specific examples and documentation related to your family's financial circumstances. Allow a few weeks for the appeals process.

Editor's Note: This article contains general information and is not intended to be a substitute for professional advice. Please consult a professional advisor before making decisions about financial issues.

Learn about online bachelor's in healthcare management programs, career opportunities, job growth projections, and salaries. South Carolina is a great place for students to attend community college and prepare for careers in high-growth industries like biotech and aerospace. A guide to educational opportunities offered at the best community colleges in Oregon and career paths that await graduates. is an advertising-supported site. Featured or trusted partner programs and all school search, finder, or match results are for schools that compensate us. This compensation does not influence our school rankings, resource guides, or other editorially-independent information published on this site.

Compare your school options.

View the most relevant school for your interests and compare them by tuition, programs, acceptance rate, and other factors important to find your college home.