Compare Your College Financial Aid Award Letters

It’s college acceptance time and letters are arriving to excited college-bound students almost daily; financial aid award letters follow right behind. The award letter contains important information about the financial aid package being offered by the college, usually a combination of scholarships, grants, work-study and loans. Some colleges include a College Shopping Sheet to outline your award; if you have applied to multiple colleges, there may not be a standard award letter, making it difficult to compare and get to the bottom line cost for each college.

The New York State Higher Education Services Corporation (HESC), the State’s student financial aid agency that helps people pay for college, provides information and a Financial Aid Award Comparison Tool to help students and families interpret their award letters so they can make informed decisions about the true cost of each college before making their decision. HESC’s website at details the various types of federal and state financial aid.

Plan to apply as early as possible for college aid

Applying early ensures you'll have enough time to compare financial aid packages from all the schools you are considering before you make your final decision.

Understand the ABCs of Financial Aid

Award letters typically include the cost of attendance (COA), the expected family contribution (EFC) and the types of financial aid being offered -- usually a combination of scholarships, grants, work-study and loans. Here are a few terms to know as you review your financial aid award letters:

Cost of Attendance (COA):

The COA should include direct costs for tuition, fees, room and board and indirect costs for books, transportation and personal expenses, which may vary and are not billed to you by the college.

Expected Family Contribution (EFC):

The EFC is the financial contribution your family is expected to make towards the college’s cost of attendance and is used to determine your financial need. It is generated from the information you include on the FAFSA.

Grants and Scholarships – Gift Aid

Federal and state scholarships and grants do not have to be repaid. Your award letter should clearly list scholarships and grants, if offered. The most common federal grants are the Pell Grant and the FSEOG (Federal Supplemental Education Opportunity Grant).   New York offers the Tuition Assistance Program (TAP), a need-based grant for New York State students attending a college in New York State, as well as various scholarship programs based on merit or need.

Additional scholarships and grants may be awarded by the college, based on financial need and/or merit. It is important for you to know if the award is for one year or several years and if you have to reapply for the funds every year. The award may be specifically for students in your area of study and may require maintaining a certain grade point average (GPA). You should know if your award is contingent on any factors such as your financial need, your major, participation in an activity or any other obligation on your part.

Net Costs

Some award letters will define net cost as your out-of-pocket costs to attend the college -- the cost of attendance minus grants and scholarships (gift aid). Others may include need-based loans in net costs. Loans need to be repaid and should be considered an out-of-pocket cost of attendance.

Options to Pay Remaining Cost of Attendance

Federal Work-Study (FWS): Many colleges have jobs on campus at which students can work and earn money, usually at minimum wage. If you are awarded FWS, apply for a position as early as possible; the college’s federal work-study funds may be limited.

Federal Education Loans 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? A chart outlining the differences can be found on

You may accept the federal loans on the award letter, and decline them when you are billed by the college if you don’t need them. You may find it more difficult if you decline federal loans on the award letter, but find you need them to help pay your bill later.

What’s the bottom line?

The award letter should clearly state whether the school is able to meet your full need. After totaling grants, scholarships and any federal loans and work study offered, how much is left to pay? How will you fill the gap? You may wish to consider a monthly payment plan; most colleges offer interest-free monthly payment plans. For a small application fee, you can spread your payments over 10 or 12 months, depending on the plans the college offers. Contact the student accounts office at the college for details.

You may have savings, but do you still have unmet need? Private education loans, also known as alternative education loans, are offered by private lenders. Borrowing a private loan is a serious financial commitment. Be sure to exhaust all federal loan eligibility before taking a private loan. And, most importantly, will you be able to afford the additional private loan debt that often is offered at higher interest rates or with fewer benefits? If you are considering a private college loan, be sure to compare interest rates, fees, and other costs. Use HESC’s Private Student Loan Tool, a comprehensive list of private lenders, their loan rates and terms.

Most importantly, consider your ability to pay back all of your student loans, both federal and private, following graduation, taking into account the career you are planning and the projected income at an entry level. Be open to all the possibilities each college or university offers and talk to your family realistically about the “bottom line,” your “dream” college and those you can actually afford.