Receiving a financial aid award letter is exciting — but it can also be confusing. Here's how to read it accurately and compare offers across schools.
The Three Types of Aid in Your Package
Grants and scholarships are the best form of aid — you never repay them. These come from the federal government (Pell Grant), your state, or the college itself (institutional grants). This is the number that actually reduces your cost.
Loans must be repaid with interest. Federal subsidized loans don't accrue interest while you're in school; unsubsidized loans do. Loans in your aid letter are not "free money" — they're debt.
Work-study gives you the opportunity to earn money through a campus job, but you have to work for it and receive it as a paycheck — not as a credit on your tuition bill.
How to Calculate Your True Net Cost
Take the total cost of attendance (tuition + fees + room + board + books + personal expenses) and subtract only grants and scholarships. The result is your actual out-of-pocket cost — what you and your family will need to cover through savings, loans, or work. This is the number to compare across schools.
Why the Same Sticker Price Can Mean Very Different Costs
A school with a $75,000 sticker price and a $45,000 grant costs you $30,000. A school with a $45,000 sticker price and no grant costs you $45,000. Comparing sticker prices is misleading — always compare net costs.
How to Appeal Your Aid Package
If your family's financial situation has changed (job loss, medical expenses, divorce), or if another school has offered significantly more aid, you can write a professional financial aid appeal letter. Many colleges have a formal appeals process — call the financial aid office, explain your situation, and provide documentation. Appeals succeed more often than students expect.