How Do You Interpret Your Award Letter?

How Do You Interpret Your Award Letter?

You have made some decisions about your college education and made application to one or two schools. As the school looks at your financial need and what they can offer in financial aid, they will send you what is known as an award letter. This award letter will list what they can offer you in the way of financial aid for the coming year.

The first thing you’ll want to notice about the financial aid is how much of the money that they are offering will come in the form of grants, work-study programs, or scholarships and how much of the money will come in the form of a loan. The difference in these types of aid is that some of it will need to be paid back while some of it will not need to be paid back.

There are several types of grants that you could possibly receive. Some grants would come from the federal government while some would come from the school itself or from state-sponsored grants. Work-Study programs will be those programs that will allow you to work for the school to pay your remaining tuition or for a private or publically funded entity that has an agreement with the school to help in their work-study programs.

Since scholarships can come from anywhere, the school will include any scholarships that you have already applied for and received from outside sources (that you have informed them of) as well as any scholarships that the college will have to offer you. These three types of money are available from differing sources and do not have to be repaid.

What you will particularly need to be clear about in the letter is the money that fits into the above categories and the money that fits into the loan category. The loan money will eventually need to be repaid. You will need to be sure to understand the terms of the loans and the repayment terms before you accept this portion of the letter.

Usually, the award letter will inform you first of how much you can expect the first year of college to cost. It will let you know how much the federal government, by review of your FAFSA, will expect your family to contribute and how much the government is willing to help.

You will then need to sign the letter and send it in to the college’s financial aid office. Be sure to read the award letter carefully and follow any instructions it may give you about loan documents. Usually, you will have to do extra paperwork to accept any of the loans offered.