Understanding your financial aid offers 2025

After a grueling application process, your hard work has paid off. You toured campuses. Sat for standardized exams. Wrote essays and asked teachers for letters of recommendation. You've finally been accepted to the colleges you applied to.

Then come your financial aid offers. Confused? Don't be. Below we walk through what financial aid offers are and what each section means.

Understanding what information is typically included in a financial aid offer, sometimes referred to as a financial aid award letter, and what key items to look for can help you compare your options and choose the most cost-effective school.

What is a financial aid offer?

Whether you plan on pursuing a certificate, associate's degree, bachelor's degree or are working to a master's degree or professional credential, completing the Free Application for Federal Student Aid (FAFSA) is a critical first step, and you must submit a new FAFSA for every year you're in school.

The FAFSA asks for details about you, your household, your income and your assets. Once you submit the FAFSA, you'll receive a FAFSA submission summary that lists your details and gives a preliminary estimate about your eligibility for federal financial aid.

Also included is your Student Aid Index (SAI), a number that colleges and universities use to build financial aid offers. The SAI is a critical number that affects what grants, loans and other aid you're eligible for in college.

Before your first semester, you'll receive financial aid offers from each school that accepted you. When they go out depends on the school, but most offers are sent between February and May. If you applied for early decision, early action or the school uses a rolling admission structure, you could receive the offer as early as November.

Understanding your financial aid offers

Financial aid award offers vary by school, so they may have different formatting and designs. They may include:

• Total cost of attendance: This is your complete cost of enrolling in college for an academic year. Offers are broken down to show direct expenses, such as tuition, school fees, housing and food, and indirect expenses such as textbooks and transportation.
• Federal grants: If you're eligible for federal grants, such as Pell Grants or TEACH Grants, the amount you're eligible for will be listed.
• State grants: Some states operate their own financial aid programs, so you may be eligible for grants to cover some of your education costs. If you are, the offer will include the grant program's name and the amount of aid you can receive.
• Institutional grants: Some colleges and universities have their own need-based aid programs, so you may be eligible for school-issued grants.
• Scholarships: If you qualify for school scholarships based on your academics, athletic performance or other achievements, the college will list the scholarship amount.
• Net cost: This is the cost of attendance minus gift aid — financial aid like grants and scholarships that normally don't have to be repaid. For example, if the cost of attendance is $30,000 and you're eligible for $18,000 in grants and scholarships, your net cost would be $12,000. This is the portion you'll have to cover with savings, income or loans.
• Student loans: The offer will list what federal student loans you may be eligible for and the maximum amount you can borrow. As an undergraduate student, options may include federal Direct Subsidized and federal Direct Unsubsidized Loans.
• Work-study: Work-study programs are another option for eligible students. Federal, state and institutional work-study programs involve working part-time to earn money to pay for some of your educational expenses. If you're eligible for work-study, the financial aid offer will list the maximum amount you can earn.
• Next steps: The financial aid offer will detail what next steps you need to take to finish the enrollment process and accept the offered financial aid. The college or university will list key deadlines, such as when you need to contact the school to notify it of your decision.
• Other sources of aid: Some schools will outline other potential sources of financial aid, such as private student loans or private scholarships.

Financial aid award letter sample

Each school has its own format and design, so comparing your financial aid offers may be challenging. But, by knowing what details to look for, you can better understand your options.

Here's a sample of what one financial offer may look like:

How do you know which financial aid offer is best?

Now that you know what information financial aid offers include, you can compare them to choose the best option for you. When reviewing your offers, ask yourself these questions:

1. How much gift aid is each school offering? How much gift aid you receive will determine how much you’ll have to pay with savings, income and loans. You’ll need to consider gift aid alongside the cost of attendance. In general, public, in-state schools will be substantially cheaper than private or out-of-state colleges. However, some private schools offer significant amounts of financial aid, so a school with a high sticker price may end up being less expensive overall.
2. How much money will I need to borrow? Minimizing the how much money you have to borrow will save you costs after graduation. So it may make sense for you to choose a school whose offer will require you to borrow the least amount.
3. What other costs might I have? The financial aid offer may not be inclusive of all your personal expenses. Depending on where you plan to go to college, you may have added indirect costs, such as the cost of flying home and back during breaks or added supplies.
4. What makes the most sense to me? Comparing financial aid offers isn't solely a practical, objective exercise. Your needs and desires should play a role too. If you're torn between two schools, and the more expensive one has the perfect program for your career goals or you fell in love with the campus, it may be worth the premium. But, by having a clear understanding of what financial aid is available and what costs you'll take on, you can make a more informed decision.

To help making comparing financial aid offers easier, the Citizens college planning platform, College Raptor,® has a Financial Aid Offer Comparison tool. Available online for free, this allows prospective students to upload their financial aid offers for a clear side-by-side comparison.

Consider all your other options

Your financial aid offer plays a crucial role in determining what college to attend and your financing options. If your financial aid package is inadequate for your dream school, take a look at these options:

• Consider another school: Although it may be difficult, you may want to look at attending another, less-expensive college. A cheaper school, such as one closer to you or an in-state public school, can slash your education costs and reduce how much you have to take out in student loans.
• Appeal your financial aid offers: In some cases, you may be able to appeal the college's financial aid decision. If your circumstances have changed — for example, if your household has experienced a loss of income or had another child — you can contact the financial aid office and ask for another review of your information. Depending on your circumstances, you may qualify for additional aid.
• Explore private student loans: If you have your heart set on a particular school, but haven't received enough aid and don't have enough income or savings to cover the full cost, another option is to apply for a private student loan. A private student loan could help you bridge the gap between the cost of college and what you have available from other financial aid sources.

Private student loans may help cover higher ed expenses

Citizens has undergraduate, graduate and parent student loans with fixed or variable rates and flexible repayment options.† You can view your student loan options and get a rate quote in about two minutes.