Typically, colleges for which you have been accepted will send an awards letter to you in March or early April. This letter contains important information. From it, you should be able to determine your total cost and the financial aid you are offered. Unfortunately, there is no standardized format for these letters, nor is there a standardized set of data that must be reported in the letter. Each school formats their letters a little differently, and so it can be very difficult to decipher.
On your letter, you may see several acronyms. Let’s go over a few of them so that the letter itself will become clearer. Prior to receiving your Awards Letter, you received a notification from FAFSA which included your EFC – your Expected Family Contribution. This is the amount that you or your family will be expected to cover, using loans or other means. Your COA – is your cost of attendance. It is the amount listed on the letter that shows the total cost to attend the school. Your FAFSA of course, is your Free Application for Federal Student Aid and is the application you completed to start the whole process.
The letter should outline your COA, so that you understand the overall costs. If you are comparing schools, this is often a very important number. You will also see the Net Price, which is the COA minus your gift aid. Gift Aid is considered the scholarships and grants that you were awarded through the school and the FAFSA. While COA is an important number, the Net Cost can be even more important. The Net Cost is the Cost of Attendance (COA) minus the financial aid you received. This includes all grants, scholarships, and loans. The Net Cost is composed of your EFC plus a GAP, which is the difference between the total cost and the EFC – something that goes beyond your expected family contribution.
The Net Cost can be important because, even if the COA of one school is higher than the other, that higher priced school might have more aid available. This could mean that by looking at your net cost, you may find that you could actually pay less to attend a more expensive school because they have more scholarships and grants available.
Once you have decided on a school (if you’ve applied to more than one) it is important for you to review the Awards Letter and return it to the school. When you review your Awards Letter, you will be accepting some or all of the Financial Aid offered. It is important to get this done as soon as possible so that your aid can be applied to your account at the school. You can choose to accept or not accept any portion of your financial aid. When looking through your aid package, you’ll want to accept all grants and scholarships first, followed by any federal loans prior to accepting private loans. This will help ensure that your overall costs stay low.