How To Read Your Financial Aid Award Letter

Financial aid award letters are documents from universities that set out what financial aid is available to you. They’ll be mailed out after you fill out the Free Federal Student Aid (FAFSA) Application, and the details will help you find the right college for you.

Each school uses a different grant notification format, but there are usually some similarities that you will notice. Here’s how to understand your benefit packages and how to compare between schools.

What is a funding notification?

A grant notification is a letter informing you of the funding that a university would like to offer you. These include scholarships, school grants, student traineeships, student loans, and more. Grant letters can also describe the total cost of participation for the year, including tuition, fees, and room and board.

To get this help you need to fill out the FAFSA form. When you submit the form, list colleges you are interested in and colleges use the information in your FAFSA to create your award package – although you will only receive award letters from schools that will accept your application.

Your grant letter will usually be mailed with your college admission, but the timeframe may vary depending on the specific school’s help process and when you submitted your FAFSA. While you only need to apply to a school once, you will need to reapply to FAFSA each year to determine your eligibility.

What will be included in your donation notification?

Here are some key terms to look out for when reviewing your writing:

• Expected family contribution (EFC): Your Expected Family Contribution (EFC) is an estimate of your family’s financial resources based on income, family size, wealth, and more. The Department of Education calculates your EFC based on your FAFSA and uses that number to determine how much on-demand assistance you are entitled to.
• Estimated Cost of Participation (COA): Estimated Cost of Attendance (COA) is the university’s estimates you will spend on tuition, fees, room and board, books, supplies, and more over the course of an academic year. This can be listed as your “direct cost”.
• Gift help: Gift grant is the financial aid that you are not responsible for repaying. These include scholarships, grants and dual study programs.
• Student Loans: Student loans are financial aid that you have to repay within a certain period of time. Your letter will state the maximum amount you can borrow and what your interest rate will be if you do so.
• Outstanding balance: The remaining amount is the cost per academic year after all financial support has been accounted for. This can be listed as your “net cost”.

This is how the financial requirement is determined

Your financial needs are determined by subtracting your EFC from the school’s total COA, which schools are required by law to disclose. After the Department of Education determines your EFC, the school will use it to calculate your financial needs.

Your financial needs will be different at each school as the schools have different COAs. Let’s say your expected family contribution is $ 30,000. If School A has a COA of $ 40,000 and School B has a COA of $ 55,000, your financial needs would be:

• School A: $ 40,000 (COA) – $ 30,000 (EFC) = $ 10,000 (funding needs)
• School B: $ 55,000 (COA) – $ 30,000 (EFC) = $ 25,000 (funding needs)

Remember that even if you need more money at a school, you will not necessarily be offered enough financial assistance to cover that amount. The needs-based aids available vary from school to school, so one school may offer you a certain amount and another.

How to Compare Grant Packages

Every school calculates your financial support differently. How to Compare Auxiliary Letters:

Consider the details of the loans:

• What is the interest rate?
• Is there a grace period?
• What are the repayment conditions?
• What is the monthly payment?
• Which loans are subsidized vs. unsubsidized?

Consider the details of the gift help:

• How long are your scholarships and grants?
• Do they renew automatically every year?
• What responsibility do you have to keep the fellowship or scholarship?

Compare the aid amounts:

• Which school offers larger donations?
• Where is my remaining balance lower?
• Can I afford to pay the balance for four (or more) years?
• What resources does each school offer to support tuition fees?

Take into account the availability of dual study programs:

• How many hours a week do I have to work?
• What do I earn every hour?
• Are the required hours feasible with my expected workload?

Acceptance of a grant grant

After you have carefully checked all the details and decided which school to attend, you need to accept your offer of help. You can usually find the details of accepting your parcel and the acceptance deadlines on the letter.

If no deadline or instructions are listed, call your school’s financial assistance office as soon as possible for more information and guidance.

You do not have to accept all of the resources listed. Even if there are no disadvantages to accepting scholarships or grants, think carefully about them before accepting a student loan or opting for a dual study program. Private organizations also offer scholarships and grants, and applying for them can help cut your costs further.

If you decide to take out a student loan, keep in mind that you can apply for an amount lower than what is stated on your grant letter – it is best to borrow the minimum amount that you really need.

Learn more:

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