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I Am Not A Moron, But Understanding College Award Letters Can Be Confusing

The admissions and acceptance process is complete. You promptly and dutifully filed your income tax and financial aid forms. Now you are receiving college award letters and they are filled with different choices. If you are confused… join the club. But here’s some help.

First Step – Be patient

Wait for all the award letters to arrive so you can compare apples to apples. You don’t want to accept an offer before you have all the information. You need to see what each college is offering and what they are using for their cost factors.

Here are some terms that you need to understand and what they mean to you.

Cost of Attendance – The school will provide an estimate tuition and fees, room and board (if applicable) textbooks and supplies, personal living expenses and transportation. You may find all of these items or just some of them, so you need to carefully compare each so that you are looking at a fair cost comparison. I suggest that you only use their figure for tuition, fees, textbooks and room and board (if applicable). The other costs are discretionary and can vary widely from one student to another.

Expected Family Contribution – Your EFC is the amount that has been calculated by the federal government for what they believe you can afford to contribute to your student’s education costs. Your answers on the FAFSA determine this figure and will usually be very similar from college to college.

Financial Aid Needed – This is the difference between the college costs and your expected contributions and will be different for each school that you have been accepted at. Make up your own based on the basic costs mentioned above.

Now lets look at the three categories of financial aid that you will see in these offers.

High Quality Aid

This is aid that does NOT need to be repaid to the school, federal or state government. Included here you will find needs based and merit based scholarships, PELL grants, Supplemental Educational Opportunity Grants and private endowments. These dollars come right off the top and reduce your out-of-pocket costs.

Reasonable Quality Aid

This aid requires repayment or work on your part. Work-Study jobs, Perkin’s loans and Subsidized Stafford loans fall into this category. Work-Study is a job and you actually have to show up and work to collect your pay, but do allow time for studying when it is not busy.

Federal Perkins and Federally Subsidized Stafford loans are based on financial need, but interest does not begin accumulating until after you graduate or quit school. Interest rates on Perkins loans are usually lower than the rates on a Stafford loan.

Least Attractive Aid

All other loans fall into this category. Unsubsidized Stafford Loans, PLUS – Parent Loans and private student loans are the most commonly offered financial aid options to many students here. They tend to have higher interest rates and begin accumulating interest immediately. Offers that are primarily made up of these loans are the least attractive offers you can receive.

Other Items To Consider

  1. Does the financial aid offered, especially the scholarships and grants, change in subsequent years. Some schools will entice you with a freshman scholarship that disappears after year one. Be sure to ask if this is not specifically disclosed or mentioned in writing.
  2. How does the school adjust your aid if your student receives a private scholarship. Some schools take away other scholarships, some reduce loans and work-study and some will reduce each equally. If you haven’t asked, make sure you do.
  3. If your favorite school proposes an inferior offer, try making a formal appeal. Many schools are able to find ways to improve their offer if they know you are serious. Just make sure you provide supporting documentation with your appeal.

Your Final Step

Decide which offer best fits your needs and let that school know that you will be accepting. Just remember, you do not have to accept all of the loans or work-study if you can don’t want to or if you can do better without them. Don’t forget deadlines and by all means don’t miss them.


I don’t want to suggest that some colleges try to confuse you on purpose. But if all schools were required to provide a standardized comparison, it would be very easy to find the best offer. For now we will have to wade through the numbers and make our own direct comparisons.

You might want to consider printing this article and sharing it with a friend that may be going through the same confusion. You’ll probably save them a few headaches and maybe even some money. I’m confident that they will thank you for your efforts.

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