Sallie Mae: How to Read Your Financial Aid Award Letter

After colleges send you acceptance letters, they'll send you another letter that's just as important, your financial aid award letter.

There's no standard format, but they all have the same basic information.

Here are four tips on how to read your award letters and figure out which school is offering you the best financial package.

Tip number one, understand the cost of attendance.

The letter gives you the real cost of attendance, or COA.

It includes tuition and fees, room and board, books, and even living expenses.

You may find the school costs more than you thought.

Tip number two, figure out how much financial aid you're getting.

The letter lists how much financial aid you're being offered, including grants, scholarships, and work-study.

You don't have to pay back any of these.

Work-study is a job on campus with pay.

You can use that money for living costs.

You'll also see your eligibility for federal student loans, which you will have to pay back with interest.

Tip number three, do some simple math.

Once you've found those key numbers, subtract them from the cost of attendance.

The remainder is what you'll have to pay on your own, through private student loans or with other funds.

Tip number four, compare your offers.

You'll get an award letter from every school that's accepted you and where you've requested financial aid.

Comparing them can be tricky.

The easiest way is with a simple spreadsheet.

Seeing them side-by-side can be helpful, or you can use an online calculator.

The College Board has one that lets you compare up to four schools.

Keep in mind, the school with the highest price may have more money to offer you, so it may actually cost less.

You need to do the math for each school.

Now that you know how much each school will cost, it's time to decide which one is right for you.

Good luck, and see you on campus.

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