The Insider’s Guide to Deciphering College Financial Aid Award Letters

The student has put in the work, received the grades, written the essays, submitted the applications, and – voila – has received prized acceptance letters from multiple colleges. Now it’s decision time. Families who are clear-eyed have a single goal in mind: push the button for the school that offers the best financial aid package. Yet college financial aid award letters can be so cryptic that it’s difficult to separate the best from the rest. Here’s how to tell which college is offering the closest thing to a debt-free deal.

Your Spreadsheet is Your Friend

First things first. Start a spreadsheet. Whether using a Google Sheet, Excel, or ledger paper and a pencil, a spreadsheet is the best way to compare financial aid award letters. Label the columns across the top:

A – College Name
B – Cost of Attendance
C – State Grants
D – Federal Grants
E – Institutional Grants
F – Work Study
G – External Scholarships
H – Other Free Money
I – Total Free Money
J – Net Cost

Filling in the Blanks

Now it’s time to fill in the blanks. Start by listing the college names, one for each row, in column A.

Some financial aid award letters outline the estimated cost of attendance (COA) for that college. The cost of attendance typically includes tuition and fees, room and board, books and supplies, transportation, and personal expenses. If a financial aid award letter doesn’t include that number, then Google it. It should be on the college’s website. List the COA for each college in column B.

Free Money in Financial Aid Award Letters

Columns C through E are where you’ll list free money. Some states award need-based grants (such as the California Cal Grant or the New Mexico Scholars Scholarship), so enter any state awards in column C. Column D is for federal grants (not loans), such as a Pell Grant, FSEOG, and TEACH Grant. Column E is for institutional grants and scholarships. This is the free money that the university is offering. In the college financial aid award letters, these grants might be listed as a Regents Scholarship, Dean’s Award, a Jones Science Scholarship, or some other name. A single college financial aid award letter can have multiple scholarships listed, so add them up and enter the total into column E.

If, on the Free Application for Federal Student Aid (FAFSA), the student checked the box that indicated they are interested in work-study, the college financial aid award letter might include an amount for work-study. While work-study jobs aren’t guaranteed, the student who is on top of it should be able to nab one. While this isn’t free money, it’s free-ish money, so go ahead and list it in column F.

More Free Money

The information for the next two columns won’t be found in the college financial aid award letters. Column G is the total amount of external scholarships – like those listed in Scholarship Money Online’s scholarship directory – that the student has been awarded. Column H is for other free money the student might have access to, such as assigned veterans benefits.

Column I is the total of columns C through H (C + D + E + F + G + H = I). This is the amount of free money coming the student’s way. Column J is the cost of attendance less the total free money (B – I = J). In other words, column J is the family’s net cost of the student’s first year of college.

Peppering in Loans

Almost every college financial aid award letter will boldly include loans in the list of “award information.” This is because the college is responsible for making up the difference between the COA and your expected family contribution (which is calculated using the FAFSA or CSS Profile.) Loans are definitely not free money, so there’s no need to consider them in these calculations. Federal loans offered in a college financial aid award letter could include a Direct Subsidized Loan, a Direct Unsubsidized Loan, and a Direct PLUS Loan. If a college financial aid award letter includes private loans, it means that the school or a school partner is the lender.

All You Need to Know

Column J has all of the information necessary for a family to determine where the money is. Colleges that seem like a bargain at first glance (because of generous institutional scholarships, for example) may actually be more expensive because their cost of attendance is so high. On the flip side, the cheaper state school might actually have a higher net cost than a private college that offers multiple sources of free money. It’s only once you put the numbers side by side that you’re able to compare apples to apples and make a fully informed decision about which college to attend.

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About the Author:

Sally Smith is a college and scholarship coach who helps families navigate the path after high school. She facilitates in-person and online group workshops, and provides one-on-one coaching on a variety of topics. Sally can help families gain an understanding of the college selection, application, and decision process; pinpoint scholarship opportunities; write effective college admission and scholarship essays; decipher the FAFSA and CSS Profile; gather stellar letters of recommendation; and develop strategies for college entrance testing and test preparation. To learn more about the services she provides and to schedule a free 30-minute consultation, visit

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