An award letter summarizes sources of aid available from a college to help a student finance their education. The information in the letter is based on financial information submitted on the FAFSA (Free Application for Federal Student Aid). The FAFSA helps determine your SAI (Student Aid Index). Once accepted to a college, the financial aid office will send you a letter detailing the total cost of attendance (COA), federal and state grants, institutional scholarships and loans.
It is important to understand the award letter to help you determine your financial need and out-of-pocket expenses for the schools you are considering. You need to have a thorough understanding of this process. This will help you decide which school is giving you the best deal, since aid amounts vary based on the cost of attendance and your student aid index. Pay attention to the amounts listed as Direct and Indirect costs. Direct costs are fixed amounts, and Indirect costs are estimates which are flexible amounts.
If your aid offer includes student loans it is important for you to understand that you do not have to take the full amount or none at all. Incoming freshmen are offered $5500 in loans which will be in the student’s name. Researching outside scholarships can help reduce this loan amount. As you continue into your sophomore and junior years the loan amounts offered will increase. For every $1.00 offered in loans, you can expect to pay back $2.00 or more. You need to understand all the conditions for keeping eligibility for the loan and your affordability in repayment.
It is imperative that you understand your net price before May 1. If you find the school is still not affordable or your financial situation has significantly changed you should find out the procedure for appealing. Check the college’s financial aid website for information on how to submit an appeal. Appeal letters should be submitted to the Financial Aid Administrator of the school. If you are unable to find the information on the website, you should contact the financial aid office. More information about award letters can be found on the Federal Student Aid website.