Woman at table with laptop computer looking at paperworkA critical part of the college decision is affordability. You’ve been thinking about paying for college. And hopefully, you’ve also been planning for it. No matter what, you can’t make a sound decision regarding the financial aspect of college until you receive and review your financial aid award letters. MEFA has many resources, including this blog, to help you understand the financial aid you’ve been offered.

First, each financial aid award letter can look a bit different. This makes it difficult to compare award letters from different colleges, but that’s exactly what you need to do. You must gather the same information from all of your schools and look at it side by side. A great tool to help you do this is MEFA’s College Cost Calculator, which you can access here. On it, you can input each school’s cost and the financial aid received to determine your net cost at each school.

To best review your financial aid award letters, you need to understand the different categories of information.

What can you expect to see on a financial aid award letter?

1. Costs

The most helpful financial aid award letters include the yearly costs of the school. If yours do not, take the time to find each school’s annual costs including tuition, fees, room (if applicable), meal plan (if applicable), and an estimate of other expenses, such as books, supplies, and travel costs. These costs will be listed in the documents that accompany the award letter or on the college website.

2. Grants and scholarships (“gift aid”)

On the award letter, you will see any grants and scholarships that you have received. You may see federal grants such as a Pell Grant, state grants, and/or grants and scholarships offered by the college. Note that the terms “grant,” “scholarship,” and “award” are often used interchangeably. The good news? All of these are direct funds that can be subtracted from the school’s costs and don’t need to be repaid.

One important clarification you should make sure to understand is which funds were awarded based on your financial need and which were awarded based on merit. This is important because if money has been awarded based on merit, you’ll want to know if the student needs to keep a certain grade point average (GPA) in college or complete other requirements (such as community service or selecting a certain major) in order to continue to receive this money every year. Note that all aid awarded based on financial need also requires a certain cumulative GPA, usually between 1.70 and 2.00.

Additionally, you’ll want to make sure you have a good understanding about which gift aid you can expect to receive in future years, and the requirements necessary to do so. Check the materials that accompanied the financial aid award letter for these details.

3. Work-Study

Your financial aid may include a work-study award. Though your work-study award will list a dollar amount, you will not receive this money up front. Instead, this is an opportunity to get a job on campus and earn this amount of money in paychecks received throughout the year. Usually, students use the money earned through work-study jobs to pay for miscellaneous personal expenses.

4. College Loans

We cover college loans in detail in our blog post here. The most important point to understand about loans is that they need to be repaid, usually with interest.

 5. Private Scholarships

Any private scholarships that you received and reported to the financial aid office may be listed on the financial aid award. Though sometimes, schools do not list them, so keep any private scholarships that you did receive in mind when calculating your costs at each school.

 6. Factors that determined your financial aid eligibility

Sometimes, the eligibility factors used to calculate your financial aid will be listed on the award, such as the student’s enrollment status and planned housing arrangement, the number of people in your family, and the number of family members attending college in the upcoming year. Make sure these are accurate, and notify the financial aid office if any of this information is incorrect or if it changes during the upcoming school year.

While award letters can be confusing, they do contain lots of important information to help you make your college decision. Review them carefully, and read everything that you receive with the award letter. If you still have questions, you can contact the financial aid office to ask. You can also bring your questions with you to any Open Houses or Accepted Student Days on campus. As well, you can bring your letters to any of our After the College Acceptance community seminars. There, you can ask MEFA experts any of your questions. Visit our events page to find an upcoming seminar near you. And of course you can always call or email us. Reach out to (800) 449-MEFA (6332) or collegeplanning@mefa.org.