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Understanding Financial Aid Offers



For many prospective college students, receiving a financial aid award letter is a pivotal moment in the college application process. These letters detail the financial assistance that the college or university is offering to the student and their family. However, for many, deciphering these letters can be a daunting task. The elements of a typical financial aid award letter and provide tips on how to interpret them are discussed below:


Cost of Attendance

The first item you will likely see on a financial aid award letter is the Cost of Attendance (COA). The COA is the total amount of money a student can expect to pay to attend that institution for one year, including tuition and fees, room and board, textbooks, and other expenses. It is important to note that the COA is an estimate and may not reflect your exact expenses for the year.


Expected Family Contribution

The Expected Family Contribution (EFC) is the amount of money the student's family is expected to contribute to their education. The EFC is calculated based on information provided on the Free Application for Federal Student Aid (FAFSA). The EFC is subtracted from the COA to determine the student's financial need.


Financial Need

Financial need is the difference between the COA and the EFC. This is the amount of money the student will need to cover their educational expenses. The financial aid award letter will typically include the total amount of financial aid the student is being offered to cover their financial need.


Types of Aid

The financial aid award letter will also detail the types of aid being offered, including grants, scholarships, work-study, and loans.

  • Grants and scholarships are forms of financial aid that do not need to be repaid. They can come from federal or state governments, colleges or universities, or private organizations.

  • Work-study is a program that allows students to work part-time on campus to earn money to pay for their education.

  • Loans are borrowed funds that must be repaid with interest. The financial aid award letter will typically include information on the types of loans being offered and the terms and conditions of each loan.

Accepting Aid

After reviewing the financial aid award letter, the student will need to decide which forms of aid they wish to accept. It is important to read the terms and conditions of each form of aid carefully before accepting. The student may choose to accept all or some of the aid being offered, or they may choose to decline all of it.


Receiving a financial aid award letter can be an overwhelming experience. However, by understanding the elements of the letter and carefully reviewing the types of aid being offered, prospective students can make informed decisions about how to finance their education. Remember, if you have any questions or concerns about your financial aid award letter, please contact the college or university's financial aid office for assistance.



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