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Understanding Your Financial Aid Award Letter

Last updated November 20, 2023

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Screenshot of a sample financial aid award letter, with annotations.

Total Cost of Attendance (COA)

The COA is an estimate of what you can expect to pay for one year of college. In addition to tuition costs, the COA also includes:

  • Food and housing
  • Textbooks and supplies
  • Lab and course fees
  • Transportation
  • Health & medical care
  • Personal/miscellaneous living expenses

The things listed above won’t be specifically mentioned or broken down in your financial aid package, so it’s important to dig into how much these might cost over the course of your time in college.

Student Aid Index (SAI)

The SAI is the formula that a school uses to determine how much financial aid you’re eligible for. This number is calculated based on the information you provided on your FAFSA.

Scholarship and Grant Options

This section lists the financial aid options that you do not have to pay back, like scholarships and grants.

Any scholarship funds earned from an outside organization (like Get Schooled) that are disbursed through your college may impact the amount offered in your award letter. If this applies to you, contact both your school and scholarship provider to explore your options.

Net price

Also referred to as “net cost,” this number is an estimate of the cost of attendance minus total scholarships and grants. The net price is what you’re expected to pay while attending the college, either out of pocket or covered by loans or other aid.

Loan and work options

This section will list available federal loan options - including the types, available amounts, and interest rates. If you're considering student loans, it's important to keep in mind the amount of debt you would be taking on at the schools you’ve been accepted to, so that you can make an informed comparison.

This section also indicates whether you qualify for work-study or other aid that may be available to you - like tuition payment plans, Parent PLUS loans, and more.

Comparing your award letters

To determine which school is offering you the best financial aid package, we recommend using Scholarships360’s free Financial Aid Award Letter Comparison Tool. This tool will help you make sure you’re comparing your award letters “apples to apples” to help you determine which college might be the best financial fit for you.

While reviewing and comparing your letters, consider these factors to come closer to finalizing your college decision:

Which college is, overall, most affordable?

Which college is offering you the most scholarships and grants (aka aid that doesn't have to be paid back)? Are the scholarships going to be awarded every year or one time?

This can get tricky for two reasons. The first is that some colleges have much higher tuition rates, so they may offer more grants but still leave you with unmet need. Second, If a college only offers you a huge scholarship for the first year, you’ll need to figure out how your next few years in college will be covered.

Financial fit matters

How does that college rank on your list and why? One of the most difficult decisions some students have to make is to forgo attending their first choice because it simply isn't a good fit financially. In many cases, it doesn't make sense to put yourself in a ton of debt if another school is a better fit all around, especially financially. Some students attend a local community college or live at home for the first two years and transfer to a four-year later to help save on costs.

Where is each college located?

What are housing prices and the job market like for each college? Is it in a large city with plenty of job opportunities, but a high cost of living? Is it in a smaller town with cheaper housing but less job opportunities? Think about how these semi-hidden costs factor in.

Know your numbers

Cost of attendance is merely an estimate of average costs per year. Creating a budget can help you determine if you will actually need all the aid that is offered to you.

For example, let’s say you decide to attend a local college not far from home and you ride the city bus for free with your student ID card. In addition, your financial aid package has $3,200 in loans, and a transportation cost estimate of $1,200. It’s likely you will not need the additional $1,200 for transportation costs offered in your package, which gives you the ability to decline $1,200 of your loans. No need in taking out the full $3,200 in loans to cover an expense that doesn't apply to you!

Finding your financial fit can look many different ways. Go into the process open about what your college experience could look like to ensure your college costs are covered.

You don’t have to figure out financial aid on your own! Text #FAFSA to 33-55-77 to chat with one of our advisors. If you're using a mobile device, click here to have the text message set up for you! They can answer any of your questions and help you make a decision that works best for you.

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