Understanding Financial Aid Offers

What exactly is a financial aid offer? A financial aid offer (sometimes called an award letter) tells you the amount and type of financial aid you can expect to receive at a particular college or career school. Your financial aid offer is the key to determining how much college will cost. Once your FAFSA (Free Application for Federal Student Aid) has been submitted and processed, you’ll receive financial aid offers from colleges through email or postal mail. Some colleges may post financial aid information on your student portal.  

On your financial aid offer you’ll see:

  • The total Cost of Attendance (COA) – An estimate of what it costs to attend that institution for an academic year
  • Types and amounts of aid the school can offer you
    • Grants – aid based on financial need that typically doesn’t have to be repaid
    • Scholarships – gift aid awarded to you by colleges, state agencies, foundations, tribal and private organizations
    • Federal work-study – a need-based aid opportunity for you to work on- or off-campus to earn money for college expenses
    • Federal student loans – funds awarded based on financial eligibility that must be repaid, with interest
    • Federal PLUS loan – a loan your parent may borrow to help cover college expenses; your parent will be expected to repay the loan

To determine your estimated net cost, you’ll want to subtract your total financial aid awarded from the cost of attendance. Net cost is an estimate of the actual cost you and your family will pay to cover education expenses. The Understanding Your Financial Aid Offer PowerPoint will guide you through the ins and outs of understanding your aid offer.

Keep the following in mind:

  • You don’t have to accept all aid offered, especially student loans.
  • Consider making payments on your student loans while in college. It will save money in the long run.
  • Accept or decline your financial aid offer before the specified deadline date.
  • If you receive more than one financial aid offer, determine your net cost at each college and choose the school that’s the best fit for you.

Learn more about comparing financial aid offers at StudentAid.gov and read the helpful article, 7 Options to Consider if You Didn’t Get Enough Financial Aid.