Understanding Your Award Letter

By Jane Goldman, Citizens Bank Staff

Your financial aid award letter will help you understand the total cost for the upcoming year of college and how much of it will be covered by financial aid. It will provide you with an understanding of how much you may need to borrow to pay for college.

Why did I get an award letter?

Each year you complete the Free Application for Federal Student Aid (FAFSA), your school will send you a financial aid award letter. Based on the information you reported in your FAFSA, the school will use your Expected Family Contribution (EFC) to determine how much financial aid you’re eligible to receive.

Before your freshman year, you’ll receive an award letter from each school you’ve been accepted to. Each award letter looks a little different, but they all list the same core information.

Here’s a sample of what a financial award letter looks like:

Cost of attendance ($40,281)¹

Your overall cost of attendance (COA) includes more than just tuition and fees. It also factors in an estimated cost for books and supplies, transportation, and personal expenses, plus room and board for one academic year. These individual costs probably won’t be called out in your award letter, but you can find a breakdown of the numbers on the college website.

Tip: Make sure to compare your aid offerings to your overall COA.

Total financial aid ($16,500)

Your total financial aid package is comprised of four different types of aid:

1. Scholarships & Grants: Sometimes called “gift aid” since it doesn’t need to be repaid.
2. Direct Subsidized Loan: Need based; the government often pays the interest if certain requirements are met.
3. Direct Unsubsidized Loan: Not need based; accruing interest is paid by the borrower or capitalized at repayment.²
4. Federal Work-Study: This is earned and paid throughout the academic year, so it’s not always deducted from the cost of attendance.

Estimated direct cost of attendance ($23,781)

This is your net price, or your cost of attendance minus scholarships, grants, and federal aid. Pay attention to this number when comparing college aid offers. You’ll probably need to cover this remaining cost with savings, work-study, or private student loans.

¹Cost of attendance calculated as average of public and private data from collegedata.com

²For details on federal borrowing limits, visit: studentaid.ed.gov

What to remember

Since you’ll get multiple financial aid award letters, it may make sense to wait on making a decision until you get them from all of the schools you’ve been accepted to. The school with the lowest estimated direct cost of attendance could be the information that acts as a tie-breaker when making your final decision, no matter who is paying the bill.

More information

We are committed to helping you reach your potential. If you have questions, or would like more information about how to pay for college, call 888-716-4631 to speak to a Student Lending Specialist, visit us online, or visit your nearest Citizens Bank branch.