Financial Aid Package/Award Letter

Around four to eight weeks after submitting your college applications, you will receive college acceptance letters.

It’s also usually during the same time when you will receive financial aid award letters.

Sometimes referred to as a financial aid package letter or school offer, a financial aid award letter is a document that indicates what financial aid a student is eligible for and how much he or she can get from a particular college. It contains the total cost of attendance and various financial aid-related details.

According to the Department of Education, approximately 17.5 million students filled out the FAFSA form during the last college admissions cycle.

What’s in a Financial Aid Award Letter?

A financial aid award letter contains various details, ranging from the cost of attendance (COA) to the types of financial aid a student is eligible for and how much he or she can get from each.

Understanding the components of a financial aid award letter is key to knowing how to read it.

Let’s take a look at the main parts of your financial aid letter:

Cost of Attendance

Simply put, the COA is the estimated cost of attending a particular college for one academic year.

It provides a breakdown of the different college expenses, including tuition, student fees, room and board, transportation and school supplies.

Colleges and universities in the US are required by law to provide an official COA.

It’s important to point out that the sum of adding all college expenses is just an estimation — it may not be the same amount that will appear on your actual college tuition bill.

Student Aid Index

Formerly referred to as Expected Family Contribution (EFC), your Student Aid Index (SAI) is the amount of money your family is expected to pay for your college education according to various factors such as annual income, savings and net worth.

A particular postsecondary institution determines your SAI based on the information you put in the FAFSA form.

Do note that your SAI is not necessarily how much money college will cost you.

Rather, it indicates how much need-based aid, federal and institutional alike, you are eligible for.

Financial Aid

Any financial aid award letter won’t be complete without the part where there’s a list of financial aid types for which you are eligible at the particular college or university you applied to.

The financial aid types you can opt for can vary from one institution to the next, depending on various factors such as the school, your year level, enrollment status, etc.

Other than the types of financial aid you are eligible for, this part of your financial aid award letter also indicates how much money you can get for each financial aid to help pay for college.

The following are the financial aid types you may come across in your award letter:

• Scholarships and grants
• Federal Direct Loans
• Federal Direct PLUS Loan
• Federal Work-Study Program

Net Cost

Last but not least, your financial aid award letter indicates the net cost for that particular college — or the COA minus the total scholarships and grants for which you are eligible.

So, in other words, the net cost is the amount of money that you and your family will have to shell out per year as you work on your undergraduate program.

It’s important to note that the net cost of college does not factor in student loans, which students have to repay after graduating as well as under certain circumstances — the net cost considers only scholarships and grants.

Award Letter Example

Financial aid award letters may look different from one another, depending on the colleges or universities that send them.

However, the key components remain identical and the point of issuing them stays one and the same for all schools.

Here’s an example of a financial aid award letter from Carnegie Mellon University:

Carnegie Mellon University

• 20XX-20XX Financial Aid Awards & Eligibility
• Student: Student Name
• Date: April 1, 20XX
• Financial Need: $40,700
• Number Reported in College: 1
• Number Reported in Household: 4

Cost of Attendance	Fall Semester	Spring Semester	Academic Year
Direct Billable Expenses
Tuition	$31,130	$31,130	$62,260
Activity Fee	$144	$144	$288
Technology Fee	$230	$230	$460
Media Fee	$5	$5	$10
Transportation Fee	$128	$128	$256
Living Expenses – Housing	$5,200	$5,200	$10,400
Living Expenses – Food	$3,534	$3,534	$7,068
Orientation Fee	$555	$0	$555
Subtotal Direct Billable Expenses	$40,926	$40,371	$81,297
Personal Expenses (Estimated)
Books, Course Materials, Supplies, Equipment	$500	$500	$1,000
Miscellaneous	$700	$700	$1,400
Transportation Allowance	$35	$35	$70
Subtotal Personal Expenses	$1,235	$1,235	$2,470
TOTAL COST OF ATTENDANCE	$42,161	$41,606	$83,767
Gift Aid (Grants & Scholarships)	Fall Semester	Spring Semester	Academic Year
Carnegie Mellon Undergraduate Grant	$17,100	$17,100	$34,200
TOTAL GIFT AID	$17,100	$17,000	$34,200
Loans	Fall Semester	Spring Semester	Academic Year
Need-Based Loans – Federal Subsidized Loan	$1,750	$1,750	$3,500
TOTAL LOANS	$1,750	$1,750	$3,500
PROJECTED REMAINING COST (Total COA Minus Total Gift Aid/Loans)	$23,311	$22,756	$46,067

Below are additional options to consider for financing your projected remaining costs:

Student Employment	Fall Semester	Spring Semester	Academic Year
Federal Work Study	Based on schedule	Based on schedule	Up to $3,000
Additional Financing Options	Fall Semester	Spring Semester	Academic Year
Monthly Payment Plan and/or
Parent PLUS Loan and/or
Private Loan	$21,811	$21,256	Up to $43,067

Common Questions

When Do You Get Your Financial Aid Package

Typically, a college will send you your financial aid award letter about one to three months after receiving the details of your FAFSA from the US Department of Education.

In some instances, financial aid award letters are sent at the same time college acceptance letters are sent. However, it’s possible for them to be received later than acceptance letters.

How To Compare Awards

Comparing financial aid award letters is done to determine which college is the most affordable.

To go about it, you should look at the COA, which is computed by the institution, and subtract any scholarship and grant you are eligible for, as indicated by the financial aid award letter itself.

The college with the lowest resulting net price is the most affordable.

Do You Have to Apply Every Academic Year

Since filling out the FAFSA has to be done every academic year and the financial situation of a college student may change each time, you will receive a different financial aid award letter every year that you spend in school.

Of course, the types of financial aid and the amount for each one, too, may change from one academic year to the next.