Click here for a printable version.

It’s very exciting when the first acceptance letter arrives from a college. The months of taking tests, writing essays, completing applications are over and the results of those labors are now arriving.

A financial aid award letter will follow shortly after an acceptance letter. The award letter contains important information about the financial aid package you are offered by the college. Many students apply to 10 or more colleges, so it is essential to review each award carefully and compare it to the others before you make your final decision.

Award letters typically include the college cost of attendance (COA), your family’s expected family contribution (EFC) and the types of financial aid offered to you -- usually a combination of scholarships, grants, and loans. Since there is no standard award letter, and each college uses its own format and terminology, it may be challenging to compare “apples to apples.”

You can use the accompanying financial aid award comparison chart to sort and analyze each award to see how each compares to the others.

Keep these important considerations in mind as you review each award:

  • Cost of Attendance: The COA should include current costs for tuition, fees, room and board, in addition to projected costs for books, transportation and personal expenses. Does your award letter itemize these expenses and realistically estimate them?

  • Expected Family Contribution: The school’s EFC should be included on your award letter. This may be different than the EFC noted on the Student Aid Report (SAR) you received after filing the FAFSA.
  • Scholarships and grants do not have to be repaid. Does your award letter clearly list scholarships and grants? If so, and if not already stated, you should know whether the money will be awarded all four years or for a limited time. Must you maintain a certain grade point average to keep the scholarship? If you decide to switch majors, will you be able to keep the award?
  • Federal Work-Study: Many colleges have jobs on campus for students to work and earn money, usually at minimum wage. Apply for work-study positions early as possible, since Federal Work-Study funds are limited.
  • Loans are funds that must be repaid. If loans are included in your financial aid package, what specific loans are being offered? What are the interest rates? Were you offered more than one federal loan? You may be offered a subsidized Stafford loan, a parent PLUS loan, an unsubsidized Stafford loan, a Perkins loan, or some combination of federal loans. It is important to know the difference. A quick reference chart outlining the difference can be found on HESC’s Web site.
    You can accept the federal loans on the award letter, but you may decline them later when you are invoiced. It is more difficult to decline them on the award letter only to find you need them to help pay your invoice later.
  • Is there unmet need? Does the award letter clearly state whether the school is able to award your full need or not? If it is offering you full need, is most of the money in the form of scholarships and grants or loans and work-study? How much of the money must be repaid?
    After totaling the financial aid, and the amount, if any, your family will contribute, how much is left to pay? How will you fill the gap? You may have some money in savings to use, but if not, will you turn to an alternative (private) loan? And, most importantly, will you be able to afford the additional debt you will incur by taking a private loan, usually at higher interest?
  • Private education loans, also known as alternative education loans, help bridge the gap between the actual cost of your education and the amount the government lets you borrow. Alternative loans are offered by private lenders. There are no federal forms to complete. Eligibility often depends on your credit score. Rates, fees and terms vary, so compare private loans carefully and read the fine print.
    Borrowing a private loan is a serious financial commitment. Private loans have higher interest rates and most charge fees making them more expensive than federal loan options. Be sure to exhaust all federal loan eligibility before taking a private loan.
    If a private loan is needed, student borrowers will secure better terms and pricing by adding a credit worthy co-signer to their application. Always check the interest rate, fees, interest rate capitalization policy, repayment period, prepayment penalties and other terms and conditions before you sign a promissory note.


Talk to your family realistically about your “dream” college and those you can actually afford. The key is being open to all the possibilities each college or university can offer at a price you can pay.

-30-