WSAC Loan Education Center

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Understanding Aid Options and Comparing Award Letters

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Outcomes

If you are thinking about going to school or are already in college, you may be wondering what options you have to pay for school and how to know which school is offering you the best deal. In this module we will cover:

Once your have successfully jumped over the hurdles of applying to schools, filing out the FAFSA (or WASFA), and maybe even applying for other scholarships; now it’s time for the exciting part – deciding where to go to school!

As your acceptance letters and award letters come rolling in, take some time to compare your offers.  A few key things to compare are:

  1. The estimated total cost of attendance à does it accurately reflect your living situation, travel expenses, etc.?
  2. How much of your total costs can be covered by grants and scholarships?
  3. Are there work-study opportunities available to you?
  4. How much will you have to pay using savings and loans?

Also, consider the school’s:

  • Graduation rate;
  • Loan default rate;
  • Graduate earnings;
  • And if the school is a good fit for you

This is just the tip of the iceberg!  Take the plunge and join us in the rest of this module as we help you understand aid options and give you the tools you’ll need to start comparing your award letters!

Key Terms

Cost of Attendance: includes tuition and fees, along with estimates for housing, food, books, transportation, and a variety of other costs you may have during your time at college
Gift Aid: grants and scholarships that can be put toward your cost of attendance and that does not need to be repaid
Grants: gift aid from the government based on your FAFSA/WASFA
Scholarships: gift aid from a school or outside organization that generally requires an application
Graduate Assistantship: often a tuition waiver and stipend in exchange for a graduate student working as a teaching or research assistant
Work-Study: federal and state programs that give you access to part-time campus employment to help cover your expenses
Net Costs: the cost of attendance minus all gift aid
Expected Family Contribution: calculated based on your FAFSA information to determine eligibility for financial aid (your family will not necessarily be responsible for paying this much money)
Loans: money borrowed to pay for student expenses that must be repaid with interest
Graduation Rate: the percent of students who graduate from the school within a certain number of years
Loan Default Rate: the percent of students who default on their loan within a certain number of years after leaving the school (a lower default rate is better)
Median Borrowing: the typical amount of money borrowed by students at the school
College Bound Scholarship: this program is an early commitment of state financial aid to eligible students who sign up in middle school and fulfill the scholarship pledge

What options do I have for paying for college?

When it comes to paying for college, you generally will be relying on a combination of the following:

Payment Method Options
Money that is given to you that you don’t have to pay back
  • Grants: through FAFSA or WASFA
    • Washington College Grant
    • Pell Grant
    • SEOG
  • Scholarships: can be found in many places, and you must typically apply for them separately from the FAFSA or WASFA.  They may be offered by the institution you’re attending or by organizations or businesses in your community.
    • To search for scholarships offered by an institution you’re attending or thinking about attending, review the school’s website or contact the financial aid office.  Community-based scholarships may be offered by a wide variety of organizations, including the following:
    • Any local community activity you are involved in (dance studio, scouts, etc.)
    • Community-based or philanthropic organizations, such as Kiwanis Club, Lions Club, Elks Lodge, etc.
    • Your elementary, middle, or high school
    • Churches or local faith groups
    • Local banks or credit unions
    • Local or county political parties
    • Your parent or other family members’ employers
    • For scholarships outside of your school, take a look at The WashBoard, a free web-based scholarship matching clearinghouse for Washington residents and students attending college in Washington. You create an account, enter information about yourself, and the site suggests scholarships in WA that you may wish to apply for.
      • A quick warning – you should never have to pay to find scholarship information or apply for a scholarship. If you are asked to pay or told you are guaranteed a scholarship, it may likely be a scam. If you are unsure, ask a teacher or guidance counselor.
  • College Bound Scholarship
  • Tuition waivers
Money that you work for
  • Work-study
    • State work-study
    • Federal work-study
  • Research
  • Graduate research assistantship/graduate teaching assistantship
  • Working a part-time job
Savings (not an option for many students)
  • Your savings
  • Money from parents or other family
  • College savings account (see College Savings Plans for more information)
Money that is given to you that you have to pay back with interest (loans)
  • Federal loans
    • Direct Subsidized – no interest as long as you are a full-time student
    • Direct Unsubsidized – interest accrues as soon as you receive the loaned money
    • Direct PLUS
      • Parent PLUS – parent is the borrower and can borrow up to the cost of attendance minus other financial aid; higher interest rate
      • Grad PLUS – similar to the Parent PLUS loan, but available to graduate and professional students
  • Private loans
    • Banks
    • Credit unions
    • Schools
    • Other financial institutions

How do I go about qualifying for different types of financial aid?

  1. Fill out the FAFSA (or WASFA if you are not eligible for federal aid). This will determine your eligibility for federal (or state) grants and loans, as well as work-study and some scholarships
  2. Talk to the financial aid office at your school to see what scholarships and other options are available at your institution
  3. For scholarships outside of your school, take a look at The WashBoard for scholarships for Washington students and see if there are any scholarships being offered by local organizations
  4. Fill out other applications for scholarships, graduate research or teaching assistantships, or tuition waivers

So now I have my award letter, what should I be looking for?

In 2021, all award letters in Washington will be standardized so it is easier to understand and compare your awards. In the meantime, take a look at this example provided by the U.S. Department of Education.

As you look through your award letter, consider the following:

  • Is the estimated cost of attendance relevant to you (i.e. if you live at home, your housing costs may be lower and your commuting costs may be higher)?
  • How much of your costs will be covered by gift aid (grants and scholarship) and what are the requirements for maintaining the gift aid (GPA minimum, Satisfactory Academic Progress (SAP)?
  • What work-study opportunities are available to you?
  • For graduate programs, are Graduate Assistantships or Graduate Teaching Assistantships available to you?  These awards usually waive tuition and pay you a stipend in exchange for employment at the university.
  • How much money will you and/or your family have to pay with savings?
  • Will you have to take out a loan?
    • If so, how much money will you have to borrow?

I am trying to decide between schools, how do I know which one gave me the better offer?

Comparing colleges can be hard, but the Advanced Award Letter Comparison Tool from finaid.org is a good place to start! This tool helps you to easily compare award offers and non-financial characteristics of the schools.

Here are some things you may want to compare when making your decision:

    • Your award letters
    • Graduation rates (the higher the better)
    • Loan default rates (lower is better)
    • Graduate earnings (higher is better) for the schools and programs you are considering

What other factors should I consider?

In addition to costs, you should consider a number of other factors in deciding which school to attend such as:

  • Is the school a good fit for me?
  • What percentage of students who enroll actually graduate
  • Do graduates find jobs in their career of choice?
  • How successful are graduates in their professional careers?

Check Your Understanding

#1. Which of the following are common options for financing college?

All of these are common ways to finance college

Next

#2. When thinking about a school’s default rate, which is better?

A lower default rate suggests that graduates are doing better financially after graduation because they are able to keep up with their loan payments.

Next

#3. What is the most important thing to consider when deciding which school to go to?

Some people may be looking to minimize financial costs, others may have to stay in a certain location to support family, and others may have other non-financial priorities

Finish

Results

Nicely done!  It looks like you really understand this module!

If you are still a little confused, you may want to review this module.

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Resources

CFPB Award Letter Comparison Tool
FinAid Award Letter Comparison Tool
Sample Award Letter
WashBoard Scholarships
College Bound Scholarship Program

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