For people applying to college, finance and financing is key to the process. Financial award letters go a long way in helping students fulfill their dreams. After submitting an application for financial aid, the colleges to which you apply will generally send back a financial aid award letter. This generally comes through by mid-April, the letter spelling out all the details of the aid package. A financial aid package consists of various kinds of financial aid from multiple sources. Financial aid fills the gap between someones ability to pay (expected family contribution or EFC) and college costs (the cost of attendance or COA). Simply put, it is the difference between COA and EFC.
The following infographic by Citizens Bank helps potential students decipher their financial award letters.
The difference between COA and EFC is a simplistic subtraction for students to look at. The complex bit though has to be calculating Out of Pocket costs. The infographic tells us to pay close attention to these costs before applying for any loans, scholarships or grants. This is a variable cost that can tip the scales towards one financial aid letter versus the other. Students should use this calculation to weigh up their offers.
The infographic also lays down the various kinds of grants loans and scholarships that students should understand about prior to proceeding. For example, Perkins and Subsidized Direct Stafford loans are need based. Then again, your financial award letter may allow you to take private loans from banks, in which case you would need to check with the bank advisor for details.
The visual is extremely informative and insightful for students as it gives them direction on how to weigh up offers and proceed with applications.