Paying for College

Help Deciphering and Comparing Financial Aid Offers

Question: I’m a high school senior headed to my dream college this fall. I’m very excited to start the next chapter of my life and so glad that I got into my #1 pick. All this being said, I am a little concerned about one thing. The college recently sent me a financial aid letter and it’s more than a little bit difficult to understand. I don’t have a guidance counselor and my parents are just as confused as I am. Since I’ll be taking out loans to pay for college, I really want to understand what the school is offering me and if I’m getting a good deal. Where can I get advice? 

As simple as it seems, often the best advice comes from the colleges themselves. If you don’t understand a financial aid letter, call the financial aid office at the college that sent it and ask for an explanation. Don’t hesitate to ask the college official to explain the letter in simple layman’s terms. If he or she uses unfamiliar language, be polite but persistent and ask for further information. You’ve already been accepted and offered money, so don’t worry about being annoying. You won’t lose your place or your dough!


One of the trickiest parts of the typical aid letter is deciphering which funds are “grant” (the good stuff that you don’t have to pay back) versus “loans,” which you do. So if you’re not sure which is which, don’t hesitate to ask the financial aid staff to go over this as many times as you require.

Some of the questions you’ll have to ask yourself (and the colleges) include:

-Is this college meeting my full need or only part of it? And if the full need IS met, what percentage being offered is via loan and not grant?

-Will I get the same amount of grant every year or will the amount change, even if my family income doesn’t?

-Are my loans subsidized or unsubsidized? You may also be confused by these terms. You can find a pretty good explanation of the differences here: https://studentaid.ed.gov/sa/types/loans/subsidized-unsubsidized#subsidized-vs-unsubsidized  (Subsidized loans typically have better rates and the government will pay the interest on the loan while you’re in college and for a short period after you graduate.)

But perhaps the most confounding aspect of the financial aid process is comparing offers from different colleges. If your "dream" college isn't the only school offering assistance, you'll want to know if other colleges are providing a better deal. But you may feel as if you’re facing an apples vs. oranges decision, if the letters you’re comparing don’t seem similar at all.  And, in such cases, you may not be able to rely on the college folks to help you weigh their own aid offer against that of a competitor.

So here’s a suggestion:

On March 30th (next Wednesday night), MONEY Magazine will host a Twitter chat designed to explain your aid award letters to you and help you to compare them. A panel of experts will be on hand to answer questions about aid-award letters and appealing aid packages from 7 to 8 p.m. Eastern Time (for free, of course).  Use the hashtag #FinAidHelp to ask a question that evening or email your question to college@moneymail.com beforehand if you don't have Twitter. The experts willl answer your question during the chat and email you the answer. These admissions and financial aid insiders will help you to decipher your letters and can also offer suggestions on how to increase your aid award, if necessary.

If you miss the MONEY Twitter chat, you can also try posting your queries on College Confidential. While you’ll have to be wary of replies from other students who are eager to help but may be more clueless than you are, you are likely to get assistance from reliable, experienced CC members, too.

Keep in mind that even bankers, tax accountants, and other money-matters pros are often befuddled by college financial aid awards, so don’t be shy about asking for assistance!