So you’ve applied to the college of your dreams, submitted the Free Application for Federal Student Aid (FAFSA) and any supplemental forms, received an acceptance from the Admissions Office, and now you’ve gotten an award letter from the Financial Aid Office. Here, at the Center for College Planning (CCP), we see the award letter as the final piece of the college decision puzzle. Here are our answers to some Frequently Asked Questions (FAQs) from college seniors and their families:
- What’s an award letter and why is it so important?
- Award letters tell students and their families the types and sources of financial aid available to them in the upcoming year. The financial aid office will use your FAFSA and any supplemental forms to determine the types of aid they award-gift aid (grants and scholarships) and/or self-help aid (loans, tuition payment plans, and work study employment). The award letter is a critical piece of your college decision because it will determine affordability.
- I applied to several schools so I am getting several award letters. Why do they all look so different?
- Award letters are confusing because each institution uses a different format. For example, many schools will not list total Cost of Attendance (COA) and if they do, this number will likely only include billable costs (tuition, fees, room and board) and leave out non-billable costs (books and supplies, transportation, living expenses, health insurance, etc.). If the school does not provide the COA on your award letter, be sure to do some research on their website so you can determine your cost of attendance after aid. It’s also important to note that award letters can be unclear about loans (self-help aid) and grants (gift aid). It is not uncommon to see grants and loans listed together, as financial aid offices may not use the word “loan” in the award letter.
- I’ve found my COA, my gift aid, and my self-help aid, now what?
- Your next step is to determine the net cost, which subtracts free money or gift aid from the total COA for that institution. In other words, the net price is your bottom line; this is the amount you must pay from available resources (cash, savings, income, or loans). We do not include loans in this formula because you will eventually need to repay all money taken out in a loan and is therefore not free.
- Follow this formula or use this tool to find your college’s net price: Total COA (remembering billable and non-billable costs) minus total amount of gift aid that does not need to be repaid (grants and scholarships). This number will be your net price, which will help you to compare your costs of attendance for one year at the different schools you were accepted to.
- Remember: total cost of attendance (COA) – total amount of gift aid = net price. Once your net price is calculated you can determine if utilizing the Direct Stafford Loan made eligible to you through the FAFSA is needed along with any other private or federal loans.
- Determining the net price is critical because it helps you to make sense of the numbers. For example: college A offers you $15,000 in gift aid and college B offers you $5,000 in gift aid. The total cost for college A is $50,000 and the total cost for college B is $35,000 per year. Using the net price formula, you will see that although college A gave you more money in gift aid, your net price is $35,000 while college B’s net price is $30,000.
- I don’t think my family can afford this. Can we try and negotiate?
- This is a tough question to give a definite yes or a definite no. Although all schools have a formal appeal process, the school has likely created a fair and equitable financial aid policy to help each student finance their education. If your family has experienced a major financial change-parent’s loss of a job, parent’s change in marital status, disability-or if you made a mistake when filing, you should reach out to the financial aid office so they are aware and file a special circumstance. Although we cannot guarantee that you will be awarded more aid by doing this, more information is better information; financial aid staff cannot help if they do not know of tricky family circumstances.
For any questions on award letters or to review financial aid award letters with a College Counselor, call us at 800-747-2383 ext. 119 to schedule an over-the-phone appointment!