Financial Aid Award Letter

Interactive Video

[An excited young man displaying an open-mouth smile, holding a stack of papers.]

[Animation of an illustrated hand completing the FAFSA and the SAR (Student Aid Report) online. The SAR then travels electronically to 3 different buildings.]

Narrator: After you’ve completed the FAFSA and your Student Aid Report (SAR) is sent to the schools you noted, you need to follow up with the schools’ financial aid office.

[An animation of a SAR producing an Award letter which travels to a mailbox in the form of a letter in an envelope.]

The schools use your SAR information to generate a student financial aid award letter. Letters generally arrive between January and April. 

[3 different college buildings with 3 different sized piles of money in front.]

Every school may offer you something different; don’t assume it’s all the same. Wait until you receive financial aid award letters for all the schools you are seriously considering. 

[An excited young man displaying an open-mouth smile, holding a stack of papers. A letter from Excalibur University appears on the screen. The total tuition due after financial aid is $10,468.]

You might be surprised…the most expensive school may turn out to be the least expensive after financial aid is offered. 

[An animated laptop displaying a website. An envelope labeled award letter is in front of the laptop. The financial aid award letter slides onto the screen. The letter is from Excalibur College located at 555 Old Town Rd. Boone, ME 01234.]

When you get the award letter in the mail or review it on the school portal, you’ll be given a lot of information to review. Not every school’s letter follows a standard format or necessarily provides identical information, but the essential information is relatively the same. 

[A financial aid award letter divided into sections: the fund award, the cost of attendance, and the need calculation.]

Let’s decode the financial aid award letter so you can read yours or your student’s when it’s time to understand the financial school costs. You’ll see the fund award, the cost of attendance for that school, and the need calculation. 

[On screen text]: Select each area to learn more about the award letter components.

Area 1: Fund award

Financial Aid Award Letter with instruction text: Please accept, sign, and return one copy.

Your award listing may include gift aid, self-help options or student loans. To assist you in calculating your costs, we have provided information to show you what your estimated costs will be minus any gift aid.

For financial aid eligibility for the upcoming school year are as follows:

Gift Aid Section: Lists funds with total amount and broken down by semesters and an Accept (yes or no) field

Dean’s Scholarship: $12,500; $6,250 for Fall semester and $6,250 for Spring semester

Rotary Club Scholarship: $5,000; $2500 for Fall semester and $2500 for Spring semester

Federal Pell Grant: $4770; $2,385 for Fall semester and $2,385 for Spring semester

Loans Section: Lists funds with total amount and broken down by semesters; an Accept (yes or no) field and a Loan Amount field.

Direct Subsidized Loan: $3,500; $1,750 for Fall semester and $1,750 for Spring semester

Direct Unsubsidized Loan: $2,000; $1,000 for Fall semester and $1,000 for Spring semester

Self-Help Aid Section: Lists funds with total amount and broken down by semesters and an Accept (yes or no) field.

Federal Work Study: $2,500; $1,250 for Fall semester and $1,250 for Spring semester

Award total: $30,270 total; $15,135 for Fall semester and $15,135 for Spring semester

*You may request a different loan amount, but please pay attention to the annual loan limits based on your class level. (Refer to general information sheet). Subsidized loan and work study eligibility is based on estimates and may change once your FAFSA results have been reviewed. Work study should not be used in calculating your payment. Work study wages are paid directly to the student.]

Narrator: Gift aid funds are based on need or merit. These include grants and scholarships and are not paid back. 

Loans are lent by the federal government and are classified as subsidized or unsubsidized. Subsidized loans are for undergraduate studies only; the interest is paid by the government while the student is in school and the loan amounts are generally lower. Unsubsidized loans are not need based. Undergraduate or graduate students qualify for these loans and require you to pay interest while in school; these loans offer higher loan amounts. 

Federal work-study is considered self-help. Students normally work on campus at a job and are paid to help contribute to their educational costs. 

Area 2: Cost of Attendance

Estimated Cost of Attendance (COA) section:

Tuition and Fees: $45,325

Room and board: $11,585

Books and supplies: $1,600

Computer: $1,500

Travel: $500

Total: $60,510

Need Calculation Section:

Cost of Attendance: $60,510

Expected Family Contribution (EFC): $22,250

Financial Need: $38,260

Financial Aid Award: $30,270

Net Need: $7,990]

Narrator: The school lists all related costs for that school year to prepare you for an estimated total cost. Sometimes things such as travel or a computer don’t have to be factored into your costs; they are just trying to give you a realistic idea. [Text appears, “all related school costs,” with a travel icon and a computer icon.]

Area 3: Need calculation section:

Cost of Attendance: $60,510.00

Expected Family Contribution (EFC): $22,250.00

Financial Need: $38,260.00

Financial Aid Award: $30,270.00

Net Need: $7,990.00]

Narrator: The Expected Family Contribution (EFC) is what the Department of Education determined is your personal contribution to education based on the income information you provided for you or your parents or guardians in the FAFSA.

The expected family contribution is subtracted from the cost of attendance to determine financial need. This is the number that the financial aid office uses to decide how much to award you in your financial aid package and how they will divide up the funds among their students. 

If there is a net need remainder after the financial aid award is applied, that is a number that you are also responsible for. You can pursue private educational loans or look for scholarships online or locally to apply to make up the difference. 

[Three College Campuses labeled school 1, school 2, school 3.]

School 1- Net Need: $10,468

School 2- Net Need: $4,112

School 3- Net Need: $7,809

Once you have the numbers from the school, you can do the math.