How to understand your financial aid offer

How does financial aid work?

If you need help paying for school, your first step is to look into financial aid. To get financial aid for school, filling out the FAFSA^® (Free Application for Federal Student Aid) is a must-do. The FAFSA^® is used by colleges to determine how much financial aid they can offer you for one school year. Financial aid offers include grants, scholarships, work-study, federal student loans, and school and state aid to help families from various income levels cover college costs.

When will I receive a financial aid offer letter?

Financial aid offer letters get sent out after you’re accepted into your school(s). When you receive these offers depends on when you applied to school. Many schools send financial aid information out around the time they send admission letters. However, submitting your FAFSA^® or college applications late, the amount of FAFSA^® forms schools receive, being waitlisted, and more could lead to your financial aid offer letters coming later than expected. For more information on when you’ll receive your financial aid offer letters, contact your school’s financial aid office.

Decoding your financial aid offer

Got all your financial aid offers? All financial aid offers look different, and you may have some questions about all the different grants, scholarships, work-study, and federal loans you’ve been offered. Here’s the rundown of what all the information in your financial aid offer means.

What information is listed in a financial aid offer?

Cost of Attendance (COA)

One of the most important figures you’ll spot first in your financial aid offer is the cost of attendance (COA). Each school breaks the cost down per academic year. The COA is your estimated cost to go to that school. It includes tuition and fees, room and board, books and supplies, loan fees (if applicable), meal plans, and more. Remember, this number is just an estimate. Take the time to consider the true amount you’ll spend. Are you commuting a long distance? Would you be willing to buy used textbooks instead of new? There are lots of factors that could bring your personal cost of school up or down.

Student Aid Index (SAI)

The Student Aid Index (SAI) is the revamped Expected Family Contribution (EFC). It’s an index number calculated by the FAFSA^® that lets your school know how much and what types of financial aid you need. The numbers range from -1500 to 999999. A negative SAI means you have high financial need, while a positive SAI means your financial need is lower.^{footnote 1}

Grants

Grants are free money you don’t have to pay back, and they tend to be need-based. You can get them from federal and state governments, schools, or private institutions. Common grants that may be in your financial aid offer are the Pell Grant, Federal Supplemental Educational Opportunity Grants (FESOG), Teacher Education Assistance for College and Higher Education (TEACH) Grants, and Iraq and Afghanistan Service Grants.^{footnote 2} Grants aren’t always offered every year, so make sure you stay eligible for them.

Scholarships

Scholarships are another form of free money to help students pay for school, and they can be offered based on merit, financial need, talent, community service, academics, or more. Like grants, not all scholarships are renewable each year, so make sure you maintain eligibility just in case. Some scholarships are school-specific and you’ve earned them for meeting that particular school’s criteria. Other scholarships you may see in your financial aid offers can be based on:

• Merit
• Financial need
• Community service
• Academics
• State of residence

If you want more scholarships outside of your financial aid offer, find scholarships you qualify for by browsing categories that fit you with Scholarship Search by Sallie.