University of Virginia

Financial Aid Award Letters

Acceptance letters bring a huge sigh of relief across the country.  But arriving shortly behind those is the financial aid award letter.  This is the letter that needs to be scrutinized closely, and colleges do not make it easy to do that.  Don’t let your excitement about being accepted interfere with the need to review and understand the terms on which you’ve been accepted!  Here are some tips to do that.

First, schools use different terminology for the same thing.  It’s important that you understand exactly what is in the letter line by line.  What are the important items to determine?

1.  What’s the real cost of attendance?  For this you’ll need to do a little research.  Check out the college’s own website and search for “cost of attendance”, or go to, search for the college and click on the Cost & Financial Aid tab.  Write down the line items:  Tuition and fees, Room and board, Books and supplies, Personal expenses, Transportation, and Other expenses.  Of these, only the first two are determined by the college, the others are simply estimates of what you will spend.  Colleges may supply estimates in their cost of attendance or they may not.  You want to be sure each of these items is accounted for.  Books will not cost significantly more at one school than another, but transportation might.

2.  Next, separate the gift aid from the loans and work-study.

Gift aid includes any grants and scholarships whether from the college or an outside source.  You want to know:

  • Is it for one year or for four years?
  • Is there any performance requirement (GPA, etc.) for the grant?
  • Does it come from the government (state or federal) or from the college?  Government budgets are under pressure, can you reasonably expect this amounts to be available in the future?

3.  Loans go by the name Stafford (either subsidized or unsubsidized), Perkins and PLUS.  Identify what is in your package, and be sure you know what the terms are.  Be sure there are no private loans in your package.  If you see anything other than Perkins and Stafford loans, make a note to ask about it.

Most important:  loans will be in an amount for one year, but you are planning on college for four years. Stafford loan amounts are determined by the government and actually increase as you get older.  You need to understand clearly what your loan  payment will be when you graduate!   Please do not skip this step.  Calculate what your loan payments will be, the schools will not do it for you.  If you need help with this step, drop us a note.

Work-study employment is not guaranteed.  Those jobs are coveted and can disappear if you wait too long.  If that is part of your package and you want to accept it, don’t delay when it comes time to apply for that job.  Be sure you give some thought to the implications of working while in school and that you are comfortable with that.

4.  Finally, with the numbers you now have, calculate your out of pocket cost.  That’s the cost of attendance less the free money parts, the gift aid and work-study.   This tells you what you will pay, either now or in the future (through repaying your student loans.)

If you have questions about a specific letter, the financial aid office of that college can help sort it out for you.  Do not accept any award that you don’t fully understand!

For some additional reading and a suggested comparison table, take a look at Julie Morgan’s piece.