Understanding Your Financial Aid Award letter
After filing your FAFSA, the schools you have applied to will send you a financial aid award letter, which is often included in your school acceptance package. This document will be very important when assessing your financial standing. By comparing your award letters from different schools, you will be able to determine which school has offered you the best aid package and you can choose your school with a full understanding of the aid you are eligible for.
Before receiving your financial aid award package, you will have received your Student Aid Report. It is important that you have checked for any errors on this report, otherwise your award amount could be affected. If you find an error, make sure to send your corrections right away so that your award letter includes the correct information.
What to Expect on Your Financial Aid Award Letter
Your financial aid award letter outlines all of the aid you are eligible to receive through a university piece by piece. This does not mean you have accepted or applied for the awards, so when you decide on a school, you will have to follow through with the aid application process. This includes federal grants and loans, outside sources of aid such as scholarships, and federal work study.
The first section of the letter determines a student's financial need. This is calculated by taking the cost of attendance and subtracting any outside scholarship or source of aid, as well as your Expected Family Contribution. The amount remaining is what the school has determined your financial need to be. The cost of attendance varies by whether you are an in-state or out-of-state student. In some cases, you have the option to waive out-of-state tuition, essentially giving you a deduction on tuition costs.
The second section then delineates the money you are eligible to receive. It breaks down your total award money by award type. For example you may be eligible to receive $1,000 for a state scholarship grant, $2,000 for a school-based merit scholarship, and $5,000 in Stafford loans. This means your total award would be $8,000.
When reading through your letter, look at all aspects of the aid requirements and note any stipulations. For example, if you are be eligible for a certain amount of work study money, you may be required to work a particular number or hours. Make sure to compare the requirements of each aid package you receive, because the terms or conditions may change how you choose.
Is Your Financial Aid Package Enough?
In order to determine if this is enough aid, you should plot out your school expenses. Make a list of all of the expenses you will be faced with, including how much you expect to spend on each. Your list should include tuition, fees, room and board (if applicable), books, transportation, and incidentals (for unanticipated expenses). If this amount is significantly more than your total award amount, you will need to make up the difference. If it is enough, you have the option of accepting all or even parts of the aid package. For example, if you get enough money with grants and scholarships and believe you can cover the rest, you are able to reject the loan.
If you feel that you are eligible for more aid than you received, there is an appeals process. Your first step is to contact the school's financial aid office. You will likely be asked to submit a letter explaining why you believe your package should be reconsidered. You can appeal on two grounds - need and merit. If you appeal because of need, you must demonstrate why your need is greater than the amount provided. This could be for a number of reasons including recent loss of a job or unexpected medical bills. If you believe you deserve more based on merit given your academic record, you can also file an appeal. Look into your college's scholarships or grants and if you feel you qualify for more aid than you are receiving, you may be able to get a stronger scholarship offer.
If, after going through this process you do not receive enough aid, there are options for making up the difference. You can apply for private student loans or outside scholarships in order to supplement the federal and school aid you have received.
Need an example? Walk through a sample award letter here.
Next Step: Learn about your federal loan options