Financial aid award letter.
In plain English
A financial aid award letter, also called an aid offer, is the document a college sends after you are admitted, listing the aid it will give: grants and scholarships that do not repay, loans that do, and work-study. The tricky part is that letters vary in format and can blur free aid with loans, sometimes showing a low number that leans on borrowing. The figure that matters is net cost, the total cost of attendance minus only the gift aid, which shows what the family actually has to cover out of pocket or through loans.
01Why it matters
Award letters can make a college look more affordable than it is by mixing loans in with grants, so learning to strip out the loans and find true net cost lets families compare offers honestly.
02The math, step by step
Two colleges send offers. One shows a big total aid number, but much of it is loans; the other shows less aid that is mostly grants. Subtract only the gift aid from each school's full cost of attendance, and the second school can be cheaper despite the smaller headline aid figure.
03What this is NOT
It is not the final price and the aid is not all free. Loans in the letter must be repaid with interest. The real out-of-pocket figure is cost of attendance minus gift aid only, not minus the loans.
04Receipts
Every figure on this page is sourced to a primary document. Tap to open the original.