The Free Application for Federal Student Aid (FAFSA) is an important first step in the financial aid process. After you’ve submitted the FAFSA, your college(s) of interest will process the information you provided and will determine your eligibility for federal and state aid. The college(s) will also calculate the loans and institutional scholarships you’re eligible to receive. The summary will be sent to you in an award letter, either electronically or via the U.S. Postal Service. Keep in mind, it takes time to process this information, so most campuses will send out aid offers in late March or early April for those starting college in the fall.
When your offer arrives, it’s important to read it carefully. You’ll be asked to accept or decline all or some of the offered financial aid. On your aid offer, you’ll see several different numbers, which are outlined below.
Cost of Attendance (COA): This is the estimated cost to attend your college for one year.
Expected Family Contribution (EFC): This number is used by the college to determine how much financial aid you’re eligible to receive. While the EFC is a calculation of all the information provided on the FAFSA by you and your parent, it’s most likely not the amount you’ll be expected to contribute. Want to learn more about the EFC? Check out our EFC Overview .
Award Package: The letter will list the types and amounts of aid the college can offer to you. You may see some of the following:
Grants: These are considered gift aid that can come from federal, state and tribal governments. Grants are usually based on financial need.
Scholarships: These can be based on need, merit or interests. They’re awarded by colleges, state agencies, companies, foundations, tribal and private organizations.
Federal Work-Study: This is an opportunity to work on- or off-campus to earn financial aid. Think of it as a part-time job specifically to pay for college.
Federal Student Loans: Loans are borrowed money to help you pay for college. Loans must be repaid, with interest.
Remember, you don’t have to accept all of the aid offered to you, especially when it comes to borrowing student loans. A monthly payment of tuition and fees during college may be a better option for you or your family than a loan payment with added interest after you’ve completed your education. To learn more about the different types of financial aid, check out our publication: Are You Looking for Money?
Talk with your family about your financial situation and decide how much financial aid and which types of aid you need to accept. Still have questions about the financial aid letter? Take a look at our new resource, Understanding Your Award Letter.