Reading a financial aid offer line by line

A financial aid offer lists the aid a school is prepared to give you for one year. Reading it line by line shows what you will actually owe and how each part is paid. Here is a way to sort the lines and compare offers from different schools.

Start with the cost of attendance

The cost of attendance is the school's estimate of a full year, not just tuition. It includes direct costs the school bills you for, such as tuition, fees and campus housing. It also includes indirect costs like books, transportation and personal expenses.

Separate the two before you go further. The direct costs show what the school will bill. The indirect costs are money you will spend, but no one will send you a bill for them.

Sort the aid into three groups

Grants and scholarships are gift aid that you generally keep. Work-study is money you earn through a job, paid as you work. Loans, including any Parent PLUS loan, are money someone has to repay with interest.

Subtract only the gift aid from the cost of attendance to find your net price. Some offers subtract loans too, which makes the remaining cost look smaller than it really is.

Questions to answer

• What the school will bill each term
• How much of the offer is gift aid
• Which awards renew and under what rules
• The date your response is due

Check the assumptions

Offers are often built on full-time enrollment and on-campus housing. If you plan to study part-time or live at home, the numbers will change. Ask the office to show you a revised estimate.

Look for renewal rules on each grant. Some school scholarships require a minimum grade point average or a certain number of credits to continue.

Accepting and comparing

You can accept, reduce or decline each line separately. Respond by the date on the offer, and report any outside scholarships, since they can change your other aid.

When comparing schools, line up the net price and the loans side by side. A larger offer can still cost more if most of it is borrowed.