Get Ready to Compare Financial Aid Offers Letters
College admission letters are in your hands! Decision time is so exciting…but, wait! Carefully compare the financial aid offered from each school before making a decision.
Financial aid offer letters begin arriving in early spring. The letter is important because it outlines the financial aid package offered by that school. Letter formats may differ from school to school, so be sure to pay extra attention when comparing the offers. How do you know which college offers the best deal? Is it College A with a lower tuition rate? Or College B with a large scholarship? First, let’s look at what we can learn from the financial aid offer letter.
What is a Financial Aid Offer Letter?
A financial aid offer letter includes the different types and amounts of available financial aid. Information from your completed FAFSA is sent to the colleges of your choice, which helps determine financial aid eligibility. The colleges use this information and the college application to determine the type and amount of financial aid available to students.
Here’s the University of Northern Iowa's financial aid offer letter example, which includes the following information:
Estimated Total Cost of Attendance (COA)
- Tuition and Fees
- Housing and Meals
- Books and Supplies (found on bottom right of UNI letter)
- Personal expenses (found on bottom right of UNI letter)
- Grants
- Scholarships
- Direct Subsidized Loans
- Direct Unsubsidized Loans
Other Financing Available
- Federal work study
- Other financing options (like private loans)
How Much Will I Need to Pay?
The net cost is the Estimated Total Cost of Attendance minus grants and scholarships.The net cost is the amount you need to cover with student loans, savings, and/or other loans. It’s important to use net cost when comparing the costs of college.
Net Cost = Total Cost of Attendance - (Scholarship + Grants) = Amount of Loans and/or Savings Needed
First, you will need to determine the amount of student loans, parent loans or private loans you will need. Next, you can calculate your specific out-of-pocket cost. This amount will need to be covered through savings or income earned through work. You can also use out-of-pocket costs when comparing colleges, especially if there's a big difference in the amount of loans available.
Remaining Gap = Net Cost - (Student + Other Loans) = Amount of Savings Needed
Compare All Costs 
Each school has a unique letter, and each letter may look quite different. These differences make it hard to compare the offers. Because of this, it's important to know exactly what you're comparing. For example, some colleges include room and board, personal expenses, books and supplies. Other colleges may omit these categories or move them around.
Consider using a spreadsheet or chart to compare the same information on the same page to make a true comparison. This tool from Sallie Mae can help with that.
To understand how important it is to compare schools, let’s compare two colleges. College A offers a scholarship for $2,000 and College B offers a scholarship for $20,000. Which one is the better offer? The answer might appear to be College B – the one with the biggest scholarship. That's quite impressive, and feels good to have such an offer! However, it may not be the best for you financially. When you consider all other costs, College A requires less out-of-pocket money (the remaining gap) than College B with the big scholarship.
Discover the true cost
Yes, there are multiple things to consider when trying to decide which college to attend, including college size, location and majors offered. College is a huge investment. You have to pay attention to what it will really cost to make sure you get the best return on that investment. Don’t be swayed by big scholarships or one-time grants. Knowing the true cost of each college will help you make the best decision.