The fat college envelopes have arrived! You've been admitted to several of your target schools—congrats! If you've submitted the FAFSA it won't be too long before you receive additional mail—your financial aid award letters.

evaluating your financial aid award letter

Offer letters may seem confusing at first, but we can help walk you through your award. Here’s how to compare offers to determine which one makes the most financial sense for you.

How to Compare Financial Aid Packages

Your financial aid packages are designed to bridge the gap between what college costs and what you and your family can afford to contribute. When you review and compare award packages, there are two criteria to take into account:

  1. how much of your need is being met
  2. how your need is being met

(For a more detailed explanation, read How Does Financial Aid Work?

Financial Aid Award Examples

Sometimes the total size of your financial aid package is not a good measure of its value. Sound contradictory? Check out these award scenarios.

Let's say that two colleges offer you admission: Jefferson College and Roosevelt University. Their sticker prices (cost of attendance) are respectively $20,000 and $40,000. Let's say that your estimated family contribution (EFC), a number which is determined by your FAFSA, is $9,000. Here's the breakdown:

Jefferson CollegeRoosevelt University
Cost of Attendance $20,000 $40,000
Your EFC $9,000 $9,000
Your Need $11,000 $31,000

Remember: Your EFC always remains the same. Your need, on the other hand, varies dramatically, depending on cost of attendance. Let's see how this plays out when your financial aid award letters arrive.

Scenario #1

Roosevelt University offers a hefty award package—more than double the amount offered by Jefferson College.

Jefferson CollegeRoosevelt University
Your Financial Award $11,000 $25,000
Your Need $11,000 $31,000
Your Unmet Need $0 $6,000

But there's a problem. Roosevelt has not met all of your financial need. If you decide to enroll at Roosevelt, you will need to pay $9,000 to cover your EFC, plus another $6,000 in unmet need. Jefferson, on the other hand, has met your entire need. In this instance, the bigger award is not the better award.

Scenario #2

Jefferson offers a financial aid package totaling $8,000 and Roosevelt offers one totaling $31,000.

Jefferson CollegeRoosevelt University
Your Financial Award $8,000 $31,000
Your Need $11,000 $31,000
Your Unmet Need $3,000 $0

Now as you probably recall, the cost of attendance is much higher at Roosevelt than it is at Jefferson. But when you factor in their total award package, the more expensive school becomes the more affordable school! (If you’re worried about the sticker price of college, read about the cost of college.)

But when you dig deeper into the financial aid package details, this scenario should give you pause. Take a look at how each financial aid package is made up:

JeffersonRoosevelt
Grants $1,500 $0
Scholarship $4,500 $10,000
Work Study $500 $1,000
Loans $1,500 $20,000
Total Financial Aid Award $8,000 $31,000

When comparing the two financial aid offers side-by-side, you can see that:

  • Jefferson didn't meet your entire need. After $9,000 EFC, you will need to come up with an additional $3,000, probably from a private education loan.
  • Roosevelt has met your entire need, but the award is very loan-heavy.

So which award package is the better one? In this case, that's entirely you and your family's decision.

Making a Financial Aid Decision

Let's reiterate. When you review and compare award packages, the two criteria to take account of are:

  1. How much of your need is being met.
  2. How your need is being met.

These are the financial considerations:

  1. If your dream school's award offer is loan-heavy, should you go to your second choice?
  2. If your dream school doesn't cover your entire need, should you borrow even more with a private loan?

When it comes to paying for college, only you and your family can answer these questions.

Our Advice

Before you accept an award offer and enroll in college, be sure you know what you are committing to and the consequences of your decision.