The award letter outlines how much financial support a school will provide a student for the upcoming academic year. All schools follow a basic formula: Cost of attendance (COA) minus the expected family contribution (EFC) equals financial need.
The award letter explains the type and amount of aid the student will receive, and the student can choose which parts of an aid package to accept or decline. In addition to specifying aid, the award letter shows the remaining amount the student must pay.
It's this bottom-line dollar amount that you inevitably zoom in on, but that can be a costly mistake. The true differences between aid packages aren't always obvious. Before deciding which college is the best for you, evaluate each aid package carefully, then crunch the numbers for a true comparison.
One way Nellie Mae can help Compare different schools' award letters using Nellie Mae's free, online award letter comparison calculator and worksheet. You can easily enter the details of three schools' award packages at a time, and the program shows you an instant analysis.
Keep in mind that a very expensive school can offer a generous financial aid award that makes it affordable. For example, one school's award letter may offer a significantly lower "you pay" number than another. If School A's package emphasizes Federal Stafford Loans that must be repaid, then School B may be the better bargain if its package offers a major gift aid grant.
Do you have questions about an award letter? Contact the school so their financial aid officers can answer your questions.
Making your decision Once you decide which school and financial aid package is right for you, formally accept the offer of admissions and be sure to comply with all instructions and deadlines in the admissions letter. Notify the financial aid office that you're accepting their aid award in whole or in part. Let the other colleges know that you are withdrawing your application.
Dealing with "the gap" Obviously, cost is only one factor in choosing one school over another—but it's a major consideration for most families. Financial aid rarely covers the entire cost of attendance. More typically, "the gap" looms—the shortfall between a school's COA and the total aid awarded. Parents looking to bridge that gap may dip into savings, home equity, or retirement accounts, which can present difficult financial choices in some circumstances.
For parents preparing a child for college, this process can seem overwhelming. Nellie Mae's Parent Resources for Education Preparation (PREP) Program helps parents make sense of their school financing choices.
In fact, the PREP program has just published Financing Your Child's Future, a free booklet that spells out the pros and cons of all those financial options so families can make brilliant decisions about paying for college. For a copy of this free booklet, visit www.nelliemae.com/PREP.