Making Sense of Financial Aid Awards

Building Your College List, Financial Aid, Saving Money

I have to be honest – Spring is my favorite time of the year. Not only because I get to see students celebrate their acceptances, but also because I LOVE to evaluate financial aid award letters. Seriously.

I wish that colleges were transparent in their award letters, but unfortunately most are not. Many of them hide their true costs, leave out important details and call things by completely different names. Comparing multiple offers leaves many families scratching their heads, and unfortunately leads some to commit to a college that costs more than expected.

This is why I love to evaluate financial aid letters – I cringe when I hear stories of families sending their child to college only to be reeling from sticker shock a year later. College is one of the biggest financial investments someone can make, and I want my clients to make fully informed decisions. I love helping a family make sense of their awards and costs!

With that, here are some tips for evaluating your financial aid offers.

Learn the full cost of attendance (COA)
Before you even look at how much a college is giving you, figure out EXACTLY how much it will cost to go there. Most schools include their COA on the award letters, but unfortunately many will attempt to mask the full price tag by leaving items out. The COA should include all of the following:

  • Tuition
  • Fees
  • Room and Board
  • Books and Supplies
  • Transportation
  • Personal Expenses

If any of these are missing, look them up on the website. Double check that they are current – I’ve seen colleges that fail to update their costs and list figures for the previous year.

Then, compare your award with the full COA to know your actual financial obligation. A college may give what seems to be a generous aid offer, but if their COA is high to begin with, it may not end up being the best deal.

Check the variable costs
The last 4 items on the list above – Room and Board, Books and Supplies, Transportation and Personal Expenses – are variable costs, meaning that they aren’t set in stone. The college will give you their estimates and averages, but there can be wild variation. Be sure the figures are realistic, and adjust according to your situation.

For example, some colleges will quote unrealistically low amounts for the personal expenses or transportation. I recently saw a school in Wisconsin give a transportation estimate of $500 for a student from California – clearly far less than he will spend flying to and from home. Also note areas for potential savings; frugal students can decrease the cost of personal expenses, for example. Or, if you don’t have a car on campus, your transportation costs will decrease. There is even wiggle room in Room and Board costs, since most colleges have dorms and meal plans at different price points.

Separate gift aid from self-help aid
Gift aid is free money that never has to be paid back, usually in the form of grants or scholarships. Self-help aid is money that must be earned or paid back later, usually loans and Work Study. Add up the amounts in each category to know how much the college is giving you and how much obligation is still yours. At first glance, a school may appear to be giving a great offer, but a closer look will reveal that a significant portion of the aid is loans. And if you are offered Work Study, remember that this money must actually be earned – so if the student doesn’t get a job, they’ll never see this money.

Check if awards are renewable
As shady as it sounds, some colleges will throw free money at incoming freshmen, and fail to mention that the awards are only for the first year. For every college you are considering, it’s critical to find out if each of the grants and scholarships are renewable for all 4 years. Furthermore, it’s important to know what criteria a student must meet to continue to qualify. Most renewable grants and scholarships require the student to maintain full time enrollment and a minimum GPA. Call the financial aid office directly if this information is not included on your award.


Even if attempting to decipher multiple award letters makes your head spin, I strongly recommend taking the time to figure it all out. You’re about the make one of the biggest financial decisions of you life, and it will be worth it.

Feel free to contact us if you’re struggling to make sense of your awards – it may save you a lot of money in the long run!