February 2019
5 Things to Know When Reviewing Award Letters
Receiving financial aid award letters is very exciting but can also produce confusion when trying to understand and compare them. Fear not! The following are some tips and things to know that can ease the confusion and help you make an informed financial decision when selecting your school.
1. They All Look Different
Award letters are like apples and apricots; they are both round fruits but they look different. Some have more information on them than others, such as cost of attendance or terms and conditions. While the names of some types of aid like the Federal Pell Grant and State of Maine Grant are usually consistent across all award letters, others, like grants or scholarships from the school itself, are not. And, just because one letter has more items on it, doesn’t mean it’s a better offer.
2. Work-Study Works Differently
Federal Work-Study (FWS) provides funds that are available to students to work on campus (and sometimes off-campus) and earn a paycheck. While an allotment of work study money will show up on the award letter, it is not money that will reduce the tuition bill. With FWS, students work at a job and are issued a paycheck, just like other jobs. Award letters differ in the amount of detail they provide about how FWS “works.” So while FWS earnings are a great ways to cover expenses like laundry, gas and other incidental expenses, they are not available to pay the tuition bill.
3. Be in the Know about Loans
Generally, students will see an offer for Federal Direct Loans on each award letter they receive. The amount is determined by filing the FAFSA and is based on the student’s year in school. There are two types of Federal Direct Loans , available to students, Direct Subsidized Loans and Direct Unsubsidized Loans . In addition, there may be other offers of loans on the award letter, usually presented as an estimated amount. They have varying names and types such as:
  • Private Loan or Student Loan
  • Alternative Education Loan
  • Parent PLUS Loan

It is important to understand the differences among all types of loans. Loan options should be researched before any borrowing occurs and we recommend starting with TheLoanforME . Remember, even if loans are offered, students and families are in the driver’s seat and are never required to borrow unless they choose to do so.
4. An Award Letter is NOT a Bill
The award letter will arrive before the bill and is an itemized list of the types of aid a student is eligible to receive. However, to understand the actual cost of the school, the award must be compared to the cost of attendance. If the cost of attendance is not included on the award letter, check the supplemental information included with the award letter or on the school’s website. Next, compare the information using a tool like FAME’s Comparing Costs & Financial Aid Awards worksheet. This comparison will provide a more accurate estimate of the out of pocket cost for each of the schools the student is considering and help students and families make a more informed decision. It will also result in fewer surprises when the tuition bill arrives.
5 . Additional Action is Usually Required
It is important to be on the lookout for additional steps that must be taken to accept and receive the financial aid award. For example, students must electronically complete a Master Promissory Note and Entrance Counseling before they can receive a Federal Direct Loan. Students planning to use work-study will need to complete federal and state tax information such as the I-9 and W-4 forms and any other work related forms the school requires. Read all the information included in the award letter and any supporting materials provided. Contact the financial aid office with any questions.
Want More Information?
Join us for this month's FREE Wednesday Webinar:
Understanding and Comparing Award Letters
Wednesday, February 13, 2019
10:00–11:00 a.m.

College and university award letters are apples and apricots; same category, but they all look different. In this webinar, you’ll get an in-depth overview of award letters including how to interpret what is listed on the letters, what to look for on each one, and how to compare financial aid awards to determine the bottom line and help students and families make an informed decision.
For additional helpful information and resources, find  previous issues of 5 on the 5th on our website.

FAME's College Access and Financial Education Team:

Mila Tappan, College Access and Outreach Manager
Jessica Whittier, College Access Counselor 
Nikki Vachon, College Access Counselor
Maria MacDougal, College Access Counselor
Floreka Malual, College Planning Advisor
Mary Dyer, Financial Education Officer
Jennifer Lanphear, Education Programs Officer
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