The Guide to Interpreting Your Financial Aid Award Letter

In Paying for College on Apr 08, 2016

Financial aid award letters can be cryptic and confusing. Figuring out how much each college will cost you can be challenging.

There isn’t yet an official standard format for financial aid award letters, although some colleges have voluntarily adopted the Financial Aid Shopping Sheet, a proposed standard that was developed by the Consumer Financial Protection Bureau (CFPB) and the U.S. Department of Education.

Higher education is the only major life-cycle expense that does not yet have a mandatory federal standard. Cars have the Monroney Window Sticker. Credit Cards have the Schumer Box. Home mortgages have the HUD-1.

Ideally, a financial aid award letter should summarize the college’s cost of attendance and provide details concerning the financial aid package. The financial aid package combines different types of aid from various sources, including money from the federal government, state government and the college’s own funds.

Types of aid may include gift aid, which doesn’t have to be earned or repaid, and self-help aid. Gift aid includes grants, scholarships and tuition waivers. Self-help aid includes student loans and student employment.

Financial aid award letters should arrive with or soon after the college’s offer of admission, typically in late March or early April. In some cases, the college will email a financial aid notification, with instructions to log into the college’s website to review the college cost and financial aid information online.

Not everybody receives a financial aid award letter or notification. If you don’t qualify for financial aid, you might not receive an award letter.

Students have until the National Candidates Reply Date of May 1 to accept the offer of admission and financial aid.

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