How to Read Your Financial Package Letter

How to Read Your Financial Package Letter

The LCU Blogging Team
November 7, 2017 at 3:10 AM

FAFSA: check! College applications: check! Once you’ve submitted your FAFSA and college applications, the real fun begins.

Acceptance letters will start rolling in and are usually followed closely by a financial aid package. Remember, you will receive a financial aid package from each school where you are accepted, not directly from the “FAFSA people.” Each school prepares your financial aid package based on the results of your FAFSA.

Financial aid packages are a bit different from school to school. Here’s how to read and decipher the information you’ll receive.

Cost of Attendance

The first portion of your financial aid package will outline the Cost of Attendance or COA. The COA is an outline of expenses for your first year of college. This includes direct costs billed by the school such as tuition, fees, and room & board. Book purchases may also be included in the COA if your school allows you to charge books to your student account. Generally, transportation and miscellaneous expenses are not factored into the COA.

Worried about college expenses? Download our College Budgeting Roadmap to learn about the fundamentals of budgeting.

Financial Aid

After the COA, your financial aid package will break down the aid offered to you by type: scholarship, grant, work-study, or loan. It’s important to know what each type of financial aid means. For reference, we went over the types of financial aid in detail last month on our blog.

With this information, you can see how much tuition will be covered with your financial aid package. To determine whether or not you still need funds for college, use the following formula:

COA - (EFC + Aid Award) = Need

Take the total of your Expected Family Contribution (found on the SAR from your FAFSA) and add this to the total aid award in your package. Subtract this total from the Cost of Attendance (COA) for the school. The remaining number is how much funding you still need to secure. You can fill this gap with college work study earnings, a Parent PLUS Loan or a private student loan.

Heads up! You don’t have to accept all of the aid that is offered to you in your package. To help you get a better look at your package and decide what to accept or decline, separate each type of aid into one of three categories:

  • Gift Aid: includes scholarships & grants
  • Work Aid: financial aid you earn by working
  • Loans: financial aid you are expected to pay back with interest

Now that your aid is prioritized, you may want to ask the school a few questions about the type of aid they are offering. Here are some common questions to help you.

Feel confident about submitting your FAFSA with this checklist

Gift Aid (Scholarships & Grants)

  • What are the requirements to keep my scholarship each year?
  • Can I expect this award amount to remain the same each year I’m in college?
  • What happens to my aid if I win an outside scholarship?
  • Can the aid be increased if my family has financial problems?

Work Aid

  • Are work-study jobs guaranteed or do I have to find one?
  • How are work-study jobs assigned?
  • How many hours per week am I required to work?
  • What is the hourly wage?
  • How will I receive the funds?


  • What are the terms of the loan?
  • What is the interest rate?
  • When does repayment start?
  • How much will I owe after graduation?
  • What will my monthly payment be?

Finding the answers to these questions will help you decide how much aid to accept or reject. It’s important to review this information and notify each school by the provided deadline. Use our College Cost Calculator to narrow your choices and make the final decision.

Essential Checklist for Completing Your FAFSA