The college acceptance letter is one of the most joyous letters that a student can receive from their respective college. But it is arguably not the most important letter. The College Award letter is always mentioned as one of the most important letters received by the aspiring scholar. Why is it so important? Simply stated, just because you have been accepted into the college of you dreams does not mean that you will be able to attend the college of your dreams. The college award letter offers the first glimpse at whether of not you can afford the college you want to attend. According to FinAid.org, “This letter spell out the details of you financial package.” So before you make your final college decision, here are some truths you need to know to Understand Your College Award Letter
Understand Your College Award Letter: Know the Differences in Cost of Attendance.
The most important piece of information you need to find on the award letter is the cost of attendance (COA). The COA may or may not be clearly stated on the award letter. Even if it is stated it still may be a little different for every student. It includes items such as: tuition, fees, room, board, books, transportation, and personal expenses. Many colleges are including this in the award letter, but if it is not included, you will need to figure out this cost with a little research on the school’s financial aid web page.
Knowing the student’s COA is vital to understanding their award letter. Once the student has figured out their total COA, they are ready to move to the next important part of the award letter which is understanding their college need.
Understand Your College Award Letter: Know the Difference between COA and need.
You now know the COA, but that is not the only number you need to know. The second number you need to know is your need. Your need is the COA minus your expected family contribution (EFC). For instance, the college of your dreams COA is 32,000 and your EFC is 17,000. Your college need is 15,000. This is why we always say that the EFC is the “minimum” you can expect to pay for your annual college expense. You will have to pay the EFC, plus some, if not all, of the need. It is this need where colleges are often willing to offer some scholarships and grants. More often than not, this need area is covered by college loans.
Understand Your College Award Letter: Know the Differences in Awards.
There are only two types of awards noted on the college award letter: gift aid and self-help aid. The difference between the two types is that one has to be be paid back and the other does not. You are probably more familiar with the words scholarships and grants. The aid from grants and scholarships is gift aid. They will not need to be paid back. This aid may be granted for excellence in academics or sports. But it can also be grants given by the university to the student for various other reasons. The Pell Grant also falls into this category of aid. This aid is usually awarded on the grounds of financial need.
But that is not the only kind of aid marked on the award letter. There is also self-help aid. This aid refers to loans and work study. The federally funded Federal Direct loan (formerly known as Stafford loan) both subsidized and unsubsidized will need to be repaid. Another form of loan that may or may not be listed on the award letter is the parent plus loan, which again will need to be repaid.
It is important to understand your college award letter and know what type of awards you will be receiving. This will help you as you evaluate each college award letter and ultimately make the decision on which college to attend. Soon you will be preparing for your first day of classes.