What Is a FAFSA Award Letter?
An award letter is the documentation sent from a college or university to the student that details how much financial support the student is eligible to receive. The award letter is sent following the student’s submission of the Free Application for Federal Student Aid (FAFSA) and application to attend college or university.
A financial aid award letter explains the total amount of monetary assistance a school will offer you to offset its costs.
Key Takeaways
- Financial aid award letters detail how much financial assistance a school is willing to offer you.
- The Free Application for Federal Student Aid (FAFSA) is the online form you need to submit to get any federal financial aid.
- There are four main types of financial aid: grants, scholarships, work-study programs, and loans.
How FAFSA Award Letters Work
Award letters help families budget and plan for college expenses. The award letter outlines the type and amount of all financial aid that’s offered to the student, including grants (such as Pell Grants and Federal Supplemental Educational Opportunity Grants), loans (for instance, direct subsidized loans or parent PLUS loans), scholarships, and any work-study eligibility.
Unless otherwise specified, the award letter pertains only to the upcoming school year. Upon receipt of their award letters and deciding which school to attend, students must inform the selected school how much of the award (financial aid) will be accepted.
In general, each financial aid award letter explains:
- The cost of attendance (COA): Your COA is an estimate of what you will pay for one year of school, including tuition and fees, room and board, books and supplies, and transportation.
- Your student aid index (SAI): The SAI is a number the school uses to determine how much financial aid you’re eligible for. In general, the lower the SAI, the more funding you can get.
- Details (and dollar amounts):Â These pertain to whatever grants, scholarships, work-study programs, and loans the school is offering you.
FAFSA and Financial Aid
Financial aid refers to money that helps you pay for college or a career school. It can come in the form of grants, scholarships, work-study programs, and loans. The FAFSA is a form you need to fill out to get any federal financial aid. Many states and colleges use the FAFSA to determine whether you’ll get financial aid—and if so, how much.
After you submit your FAFSA—and depending on whether you qualify for aid based on the information you provide—you’ll receive a financial aid award letter from each school you list on it. Each letter explains the federal and nonfederal financial aid options the school is offering you.
You’re not obligated to accept the aid that is offered in your award package. You can compare your offers from different schools before you decide.
Whether you accept or decline an offer, you need to respond to the school to let it know your decision. Be sure to check each school’s deadline, so you reply on time.
Schools typically send out financial aid award letters close to when they send their acceptance letters. If you have questions about the timing for the institutions you’re considering, you should reach out to each school’s financial aid office for more information.
Do I Have to Accept the Entire Amount Listed on My Award Letter?
No. Your FAFSA award letter is only a menu of the financial options available to you. Once you know what you’re eligible for, you can pick and choose what works best for you.
What Types of Financial Aid Are Best?
Most students want to reduce the cost of their education without adding to their debt load. Scholarships and grants are the most sought-after financial aid, as they don’t have to be repaid. Work-study jobs are also attractive, as they are typically on-campus and are convenient for students. Loans should be the last resort, with federal direct subsidized loans as the first option.
Can I Find Other Scholarships That Aren’t Listed on My Award Letter?
Yes. You’re welcome to apply for scholarships offered by private institutions like civic groups, non-profits, booster clubs, and more.
The Bottom Line
The FAFSA is your gateway to financial aid, and receiving award letters from your chosen schools is an exciting occurrence. Examine all your options carefully, as every school will award a different package based on your income, resources, and the school costs.