Evaluating and comparing college costs can be confusing. Here are things to keep in mind while reviewing your College Financial Aid Award Letter.
Evaluating Your Financial Aid Award Letter
A College Financial Aid Award Letter, also known as your “Financial Aid Package,” outlines the annual amount of financial aid you can receive from federal, state, private and institutional sources.
You don’t have to be a rocket scientist to figure out your Financial Aid Package. However, there is no standard format for College Financial Aid Award Letters, which means each letter may look slightly different. While the letters may look different, the information within will be similar.
Types of Need
There are two main types of aid: Need-based Aid and Non Need-based Aid.
- Need-based Aid (sometimes referred to as Gift Aid or Free Aid): Scholarships and grants that, in most cases, don’t have to be repaid.
- Non Need-based Aid: Aid that is not determined by your income. Loans that must be repaid, or work-study funds that must be earned are examples of Non Need-based Aid.
While some Financial Aid Award Letters will separate these types of aid, many will not. As a result, you will need to evaluate the options carefully and decide which type of aid best suits your needs.
Sources of Aid
The main sources of aid you may see on your Financial Aid Award Letter include:
- Federal Perkins Loans
- Parent PLUS Loans
- Federal Subsidized Loans
- Federal Unsubsidized Loans
- Private Loans
- Work Study (Non Need-based aid)
In most cases there is a deadline for accepting or declining your aid offer. Additionally, a college may request additional documents to finalize your award. The college will provide directions for submitting any documents, however, if you have any questions, contact the college’s financial aid office.
Comparing Your Costs
Finally, keep these things in mind when comparing colleges and determining your financial needs:
- Financial Aid Awards are separated by semester and totaled for the academic year.
- Your Award Letter might not have the school’s Cost of Attendance (COA) listed. However, you can usually find the COA on the college website’s financial aid page. Furthermore, you should note what is covered in the COA for each school.
- Your Estimated Family Contribution (EFC) is the amount you (and possibly your parents) are expected to contribute towards the Cost of Attendance. The FAFSA determines your EFC, this number will remain the same regardless of the school you choose.
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