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5 Things to Keep in Mind When Reviewing Your College Financial Aid Offer

When you're applying to colleges, financial aid can be an important factor in deciding which school to attend. Once you've received your acceptance letters, the next step is to review the financial aid offers from each school so you can make an informed decision about where to enroll. It's important to carefully review these offers, in conjunction with the school’s Cost of Attendance information. You’ll need to understand both the educational costs and the direct living costs that you incur by attending the school. 

Here’s what you need to know:

  1. Understand the types of financial aid.

There are several types of financial aid that may be included in a college financial aid letter. These include:

  • Grants: State, federal or private grants are typically awarded based on financial need and do not need to be repaid. (They often come with terms and conditions regarding your enrollment. Note if the funds are renewable to a student and annually disbursed, or if the funds are a one-time grant.) If the college participates in Federal Student Aid programs, you would have been prompted to complete the Free Application for Student Aid (FAFSA). The most common federal grant award is the PELL Grant.

  • Scholarships: Scholarships are typically awarded based on merit or financial need and do not need to be repaid. If the scholarship is coming from the college, the funds are most often paid directly to your student account.

  • Work-study: This is a federal student aid program that allows you to earn money through part-time work on campus. Some colleges have their own on-campus work programs or opportunities. Note: This aid should be listed separate from grants or scholarships, since it does require a student to work in exchange for funds paid to the student account. It should also indicate the dollar value associated with hours a student will work.

  • Loans: Loans are borrowed funds that must be repaid with interest. If the college participates in Federal Student Aid programs and you completed the FAFSA, there should be a separate section for what federal loans you qualify for. 

It's important to understand the types of financial aid included in your offer so that you can determine how much of your expenses will be covered by grants and scholarships versus work opportunities or loans.

2. Understand how to calculate your net cost

Your net cost is the amount you'll be responsible for paying per term (semester, quarter or year) after all grants and scholarships have been applied. Each school should have a “Net Cost Calculator” on their website for you to use. See The Institute’s here. 

However, to manually calculate your net cost, do the following equation:

Determine the combined annual cost of the following elements:

Annual tuition, fees, residence living, student meals, and any other educational item the school lists like books, equipment, etc.

Determine the total value of annual grants and scholarships that the school is offering you.

Take the total Cost and subtract the total Aid.


This will show you what cost you will have to pay out of pocket for the year. If the school indicates that you’re eligible for work-study programs or loans, you can use these funds to pay your remaining costs.


If you decide to utilize the work-study option, you can subtract the work-study amount from your out of pocket cost. 

Next, you can look at the school’s published Cost of Attendance and see what they list as estimated direct costs. Direct costs are expenses you incur, and that you pay on your own, rather than billed to your student account. Evaluate how you will pay for these expenses. Will you get a job? Get help from your family?

You now have an informed assessment of how much money (and time for work-study or loans) you will spend to attend this school. 

3. Compare offers from multiple schools

It's important to compare financial aid offers from multiple schools to determine which one is the best fit for you financially. Don't just look at the total amount of aid offered, but also consider the types of aid and the net cost after all aid has been applied. It's also a good idea to compare the graduation rates, access to internship programs and job placement rates of each school to determine the potential return on your investment.

4. Understand loan terms

If you're offered loans as part of your financial aid package, it's important to understand the terms of the loans. This includes the interest rate, repayment term, and any fees associated with the loan. You should also consider your ability to repay the loans after graduation and whether or not you'll need to borrow additional funds in the future.

5. Ask for clarification

If you have any questions or concerns about your financial aid offer, don't hesitate to contact the financial aid office at the school. They can provide additional information and help you make an informed decision about affordability.

With these 5 tips, you are set up to make an informed decision about where you choose to enroll.