How to read your financial aid award letter

Financial aid award letters are notorious for making a college look more affordable than it is. The trick to reading one is simple: separate the money you keep from the money you pay back.

Three very different things

• Grants and scholarships: free money you do not repay. This is the good column.
• Loans: money you borrow and repay with interest. Federal, Parent PLUS, and private loans are all loans, even when a letter lists them under 'aid'.
• Work-study: money you earn by working a part-time job. It is real, but you have to work for it, and it is paid over time.

Find your real cost

The number that matters is your net price: the total cost of attendance minus only the grants and scholarships. Loans do not lower your cost, they spread it out. If a letter subtracts loans to show a small 'remaining balance', do the math yourself.

Comparing two offers

• Line up cost of attendance against cost of attendance, including housing, fees, and books, not just tuition.
• Compare grants to grants. A bigger 'total aid' number can just mean bigger loans.
• Check whether grants are renewable, and what GPA keeps them.

If it still does not add up

You are allowed to ask questions, and you are allowed to appeal. If your situation changed or a comparable school offered more, the aid office can re-review your award. Try our 2026 tuition gap calculator to see what you still owe after aid, and read how to appeal your offer. Confirm any federal details at studentaid.gov.