Financial Aid Award Letter Case Study

It is an exciting time when you receive the financial aid award letters along with your college acceptance letters!  You have been accepted to college and now it is time to figure out how to pay for college. Not all colleges charge the same amount of tuition nor to they offer you the same types of financial aid programs. Not all award letters are created equal! It can not be stressed enough the importance of comparing the financial aid amounts and types of aid offered by each college as well as figuring out the bottom line cost of each college. The sample case below is for illustrative purposes and provides  a great opportunity to walk through the necessary steps that should be taken when comparing financial aid offers and determining true out of pocket costs, or net price.







College Name

Hometown College

Sunny    University

Blue Water State College


College Grant



$ 5,000

SEOG Grant

Pell Grant

State Grant

Merit Scholarship


Other Grant

$  1,000


(A) Total Gift Aid



$ 5,000


Work Study

$  2,500

$ 3,000

$ 3,000

Other Work

(B)  Total Work

$  2,500

$ 3,000

$ 3,000


Subsidized Stafford Loan

$  3,500

$ 3,500

$ 3,500

Unsubsidized Stafford Loan

$  2,000



Perkins Loan

$  2,000

State Loan

Other Loan

(C) Total Loans


$ 3,500

$ 3,500


Total Aid A+B+C




Cost of Attendance(COA)




Total Aid




Family Responsibility

$ 7,000

$ 7,500

$ 9,700

Net Price




The importance of completing a detailed comparison of financial aid award letters cannot be stressed enough. See the explanations below regarding the award letters that were compared from three different sample colleges listed above:


In Sally Student’s Award Letter Comparison Worksheet, you can see that the “Family Balance” amount differs between the three colleges.

In the case of Hometown College, the family responsibility amount is $7,000. Although $31,000 in grant money was received, a total of $17,500 in loans is also included in the award package. Not only is that a large loan amount for the first year of college, but $10,000 of that amount includes a PLUS Loan. PLUS Loan eligibility is based on passing a credit test, thus the loan is not a guaranteed source of funding, until approved. In this sample case, the family responsibility amount of $7,000 is deceiving since a $10,000 PLUS Loan was included in the aid package. Note that the family responsibility amount is actually much higher as it is more realistically $17,000 after accounting for the PLUS Loan.

The net price of Hometown College equals $27,000 which was calculated by taking the Cost of Attendance (COA) and subtracting the total gift aid (grants and scholarships).


In the case of Sunny University, the family responsibility amount is $7,500, which is only slightly greater than the amount for Hometown College. However, the composition of the aid package is very different. With $30,000 in grant awards from Sunny University, the total gift aid is very similar to that from Hometown College. However, the aid package from Sunny University only includes a total of $3,500 in a student loan, a significantly lower amount than the package from Hometown College.

The net price of Sunny University equals $14,000, which is calculated by taking the Cost of Attendance (COA) and subtracting the total gift aid (grants and scholarships).

Looking at just these first two examples, you can see that Sally Student would have less loan debt and a lower net price if she attended Sunny University.


Blue Water State College is the option with the lowest Cost of Attendance (COA); however, the family responsibility amount is $9,700, which is actually the highest of the three options. The financial aid package included a $5,000 grant and a $3,500 student loan.

The net price of Blue Water State College equals $16,200 which was calculated by taking the Cost of Attendance (COA) and subtracting the grant amount.

In the case of Blue Water State College, it shows that the least expensive college may actually cost the family more to attend. This is a perfect example of why a family should look at the whole picture, including Cost of Attendance (COA), the composition of financial aid received, the proportion of gift aid awarded, and the net price before making final attendance decisions.

As you can see, there are many significant items to consider when comparing award letters. Certainly the bottom line that the family is responsible for should be a key consideration. However, as noted in the examples, the composition of the award letter is extremely important; a family should pay close attention to the ratio of both gift aid and loans that are awarded. The net price figure can also be a valuable guide for a family since that metric shows the true out-of-pocket cost to attend a specific college.

After this sample case, it is hoped that you have a clearer understanding of what should be considered when reviewing and comparing financial aid award letters. However, it would be impractical to think that college decisions are made in a vacuum. Certainly, for many, financial considerations are but one piece of the college admissions puzzle. Families need to also be mindful of academic considerations, program fit, geographic location, campus opportunities, and student desires and dreams. Considering those factors along with financial realities will surely guide you when ultimately deciding on which college to attend. Take great care in documenting all of the information that you receive from colleges and make a detailed comparison so that you arrive at a true sense of what you will need to fund college. Use a spreadsheet or one of the award letter comparison tools found in Financial Aid Sense to help you through the college financing process.  See what customers are saying about Financial Aid Sense!

Other articles related to Financial Aid Award Letters can be found at Financial Aid Awards, Comparing Financial Aid Award Letters, and at Sample Financial Aid Award Letter.

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Jan Marie Combs, EzineArticles Basic Author