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Home Ask Ask the Edvisor What’s the best way to compare financial aid award letters?

What’s the best way to compare financial aid award letters?


I have been accepted by 4 colleges for next fall. Needless to say, I am very excited!

Here’s the hard part: Each of the colleges has sent me a financial aid award letter with various types and amounts of financial aid. What’s the best way to compare these award letters?


Congratulations on your acceptance to the colleges!

When comparing financial aid award letters from difference colleges, calculate the net price of each award. The net price is the difference between the total cost of attendance and just the grants, scholarships and other gift aid. Be careful to distinguish between loans and grants, as some financial aid award letters can be confusing. A loan does not reduce college costs.) The net price is the amount the student and his or her family will have to pay from savings, income and loans to cover the college costs. Think of it as a discounted sticker price.

There are, however, two caveats about the net price:

• Front loading of grants. About half of all colleges practice front-loading of grants, which provides a better mix of grants to first-year students than to upperclassmen. This will yield a lower net price during the freshman year than during subsequent years. Ask the college whether it practices front-loading of grants, or visit College Navigator at and use the financial aid section to compare the percentage receiving “Grant or scholarship aid” and the average grant or scholarship aid amount for beginning undergraduate students and all undergraduate students. If the college practices front-loading of grants, there will be a significant difference in these figures.

• Scholarship displacement. All colleges must adjust the need-based financial aid package when a student wins a private scholarship. But, each college can choose how to adjust the financial aid package. Some colleges will use the private scholarship to reduce or eliminate unmet financial need, if any. Then, some colleges will use the private scholarships to reduce loans and/or student employment, in which case the student’s net price will decrease. Other colleges will use the private scholarship to reduce the college’s own grant funds, in which case the student gets no net financial benefit. Students should ask each college for a copy of its “outside scholarship policy” if they’ve won private scholarships. It can make a big difference in the net price to the student and his or her family.

Some colleges have adopted the Financial Aid Shopping Sheet, which is a standardized one-page summary of the financial aid award letter, including a personalized net price. But, be careful, as some colleges will include a net cost figure on the shopping sheet in addition to the net price figure. The net cost subtracts the entire financial aid package, including loans and student employment, from the cost of attendance, making the college look less expensive than it really is.

For additional suggestions on how to evaluate financial aid award letters, check out:

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