Evaluating Financial Aid Award Letters

So you’ve been accepted to your top 3 universities and now you have 3 financial aid award letters sitting in front of you.  How do you determine which university is offering you the best financial aid package?  Which university is going to allow you to pay the least money out of your pocket by giving you a lot of grant and/or scholarship money?

Each college or university will likely refer to your financial aid award letter as a “financial aid package.”  What does this mean?  This basically means that they are offering you various types of financial aid in the form of college grants and loans, scholarships, and work study.

In order to make the wisest decision, you have to take your time and do a detailed analysis of each college’s offer.  Here are the top 5 things you should consider:

1.     Evaluate Cost of Attendance (COA) – Take each letter and compare them side-by-side.  Which elements is each college or university including in their COA?  Do they include all 5 elements – tuition and fees, room and board, books, transportation, and personal expenses?  Or do they omit one or more of these components?  In order to evaluate each award letter accurately, you must first make sure that you are comparing apples to apples.

What exactly does this mean?  Let’s say college A’s COA is $18,500 – but they’ve neglected to include room and board costs into their COA estimate, while college B’s COA is $20,000 and they’ve included all 5 COA elements…which college is less expensive to attend?  Likely college B, if we assume that room and board costs at college A will be more than $1,500 dollars.  This is crucial.  You have to make sure that you are budgeting for the right amount each year and considering each of the cost elements.

2.     Evaluate Expected Family Contribution (EFC) – What exactly is being reflected on the award letter – the government’s EFC or the school’s EFC?  Why is this important?  Because some schools may have a higher EFC than the government.  Also keep in mind that each year you fill out the FAFSA form, your EFC may increase – regardless of your parent’s income.

3.     Show Me The Money! – What exactly is the college or university willing to pay for?  Is there any unmet need?  In other words, if you accept the award letter, will 100% of the college’s COA be covered?  If yes, in what form?  Will it be mostly covered by loans and work study or will it mostly be covered by scholarships and grant money?  Which college or university is giving you the most FREE money?  If at all possible, you want to avoid graduating from college in a ton of debt.

4.     Scholarships – Are they offering you any merit or other extracurricular-based scholarship money?  Is this renewable for 4 years?  Is there a minimum GPA that you must maintain in order to keep the scholarship?  Can you switch your major and still keep the scholarship?  If you’ve received outside, private scholarships, will this affect your financial aid package at all?  These are all important factors to consider.

5.     Loans – What type of loans are included in each financial aid award letter?  What are the interest rates of these loans?  Which school offered you more than one type of loan?  What are the differences between these loans?  Are they Stafford student loans?  You should not sign the award letter until you fully understand your loan obligations.

I know that this is not an easy decision.  Remember to get your family involved.  If you are a dependent student, this is a family matter.  More often than not, your parents will have to borrow money as well to send you to college.  Good Luck!

Related Posts

The following two tabs change content below.


Lauren Anderson is a certified school counselor who's passionate about helping students all over the world successfully transition from high school to college! After spending 6 years as a business professional, she obtained her Master’s degree in School Counseling and now spends her spare time helping students.

Latest posts by TheCollegeHelper (see all)