Blog

Browse All Blog Topics

Understanding Your Financial Aid Award Letter

Along with acceptance and rejection letters, colleges are sending out another nerve-wracking piece of mail this month: the financial aid award letter.  For many families who have only recently discovered the "joys" of completing the FAFSA, the financial aid letter can bring about a whole new kind of terror and confusion.  Even for people who are somewhat familiar with aid, deconstructing the naming conventions and occasionally less-than-detailed explanations on various colleges' award letters can be frustrating, as can mounting an effective comparison among differing aid packages.  Below is the first part in a series on understanding your financial aid award letter.

Understanding Your Financial Aid Award Letter, Part I: COA and EFC

Two of the most important numbers on your award notice will be the cost of attendance (COA) and the expected family contribution (EFC). These are instrumental in determining your award, and they also have some of the most obscure and misleading meanings. Despite their prominence, they're occasionally tucked in strange places on the letter, such as near the bottom or in a box in the middle. Finding them can kind of be a Where's Waldo moment.

Cost of Attendance

The cost of attendance, often abbreviated COA, is occasionally referred to by other names, such as your "budget."  This number is not what you owe the school, nor what a year of education will necessarily cost you there. Instead, it is the average amount paid by a student in your situation: dependent living on campus, independent living off-campus, part-time living rent-free at home, etc. The COA will include tuition, student fees (these could change if you later register for classes with special fees, such as art or aviation), room and board (either what the school is charging you or what the average student in your housing situation pays), books, and miscellaneous living expenses.  Your school's financial aid office will likely have a detailed breakdown of this number available online or in the office if you ask.

The important thing to realize here is that this number is significantly higher than the amount of money you will actually owe the school. If you plan on working your way through college or receiving assistance from your parents for living expenses, you may not need aid to cover your full COA. It can still be a good tool for comparing among colleges, though, especially since they factor in handy things like average living expenses in the area.

Expected Family Contribution

The other big number on your award letter will be the expected family contribution, or E FC. Again, this is not the amount your family actually owes the school or is expected to pay out-of-pocket. Instead, this is the amount that, according to the information you submitted on your FAFSA, a family in your situation should ideally be able to contribute towards a college education. This is used to determine your eligibility for "need-based" aid, which includes state and federal grants, work-study, and even subsidized loans. Certain grants and scholarships can only be awarded to students with an EFC below a specific number (for example, 4671 for Federal Pell Grants), so if you are not eligible for grants but your financial circumstances have changed since 2008, talk to your financial aid office to see if your EFC can be adjusted downward.

Your EFC should be the same at pretty much every school, since they're using the same information to determine it (some schools require both a FAFSA and a CSS profile, so there could potentially be some differences).  However, it's still useful for comparisons among schools, since you can use it to determine whether your full "financial need" has been met by each school. Like nearly everything else in student financial aid, this term does not necessarily mean what one might think it should mean. Your financial need is a number calculated based on the two numbers we just discussed.  Your full financial need is your COA minus your EFC, and your unmet financial need is generally your COA minus your EFC minus any need-based aid and scholarship awards you've received.

So, how do you determine what the need-based awards and scholarships are on your award letter?  Check out Part II for that information.

And remember, there’s no need to rely on expensive student loan options to pay for your college education. For more information on finding free scholarship money for college, conduct a Scholarships.com free college scholarship search today, then apply and win! It’s that easy!

Discuss

Share your thoughts and perhaps thousands of students will benefit from your unique insight on the subject!



If you can read this, don't touch the following fields


 

Most Shared Articles

Fighting crime is no easy task and is not meant for everyone. Careers in criminal justice aren't limited to police officers. You can study to be a criminal law paralegal, a crime lab analyst or even work for homeland security. If you plan to take this route, don't forget to apply for these solid scholarships to reduce debt while also doing your part to reduce crime: [...]

0 months ago 0 comments Read More

Due to Oregon's $1.8 billion budget crisis, public university leaders want funding reallocated from the Promise program to the state's need-based grant, which is awarded to low-income students who attend Oregon's public universities. [...]

0 months ago 0 comments Read More

The traditional college route isn't the best choice for everyone. There are ample scholarship opportunities for students who opt for a vocational career, whether it be in the plumbing, carpentry, electrical, firefighting or many others. If you want to learn or hone a specific skill as an alternative to attending a more traditional four-year college, take some time to consider these vocational scholarship opportunities: [...]

0 months ago 0 comments Read More

Wheaton College, a liberal arts college in Massachusetts, has created a refugee scholarship following the POTUS' immigration order in an effort to preserve their "foreign-born community." Another scholarship called The Privilege Grant, was recently created and is exclusively for white men "pursuing college on equal footing with their female, queer and ethnic minority classmates." [...]

0 months ago 14 comments Read More

February is Black History Month, or National African-American History Month, and is annually spent celebrating the achievements and contributions of black Americans in U.S. history. MLK had a dream - what is yours? Ours is helping you go to college with as little debt as possible. If that's your dream, check out these Black History Month-inspired scholarships: [...]

0 months ago 1 comments Read More

Living the college life has gotten way more expensive since 1980, and not including just tuition and fees. While many types tuition freezes, government tuition-free programs, scholarships, and grants help foot the tuition bill, housing and food remain uncovered, according to MarketWatch. [...]

1 months ago 2 comments Read More

The NFL Super Bowl is right around the corner, and while you may be enjoying the highly entertaining commercials or half-time show, we’ve compiled a list of football scholarships for those of you who one day aspire to play in the Super Bowl. If you have a passion for the game and wish to play at the collegiate level and beyond, check out these award opportunities and get paid to play: [...]

1 months ago 0 comments Read More

At elite colleges, more students come from the top 1 percent than the entire bottom 60 percent, according to a new study. While roughly one in four of the wealthiest students attend elite schools, including five Ivy League schools, graduating college helps "level the playing field for students of all socioeconomic backgrounds," according to Inside Higher Ed. [...]

1 months ago 0 comments Read More

Not all scholarships are awarded to the best writers with the strongest essays. So whether you're too busy writing other essays for school or simply not the best at literary composition, there are scholarship providers that dole out funds for unique hobbies or skill sets; or even for simply entering a contest. Check out these no-essay (or essay-alternative) awards for a chance to fund your college education:: [...]

1 months ago 3 comments Read More