Financial Aid: FAFSA Award Letter Breakdown with Samples

An award letter is a document universities and colleges send students to inform them about the cost of attendance (COA) and possible financial aid the student is eligible to receive.

Other names for the award letter are the financial aid package, financial aid award letter, student aid package, FAFSA award letter, school offer, and financial aid offer. Students applying to more than one college must submit a Free Application for Federal Student Aid (FAFSA) at every university. They can expect to receive a different FAFSA award letter with acceptance notification from each school. Although every award letter is specific to its educational institution, the universal goal of this document is to define the total amount of financial support the institution will offer each student to attend a college or university.

Schools offer different types of financial aid to help their students compensate for insufficient expected family contribution (EFC) and acquire the necessary means to pay for the cost of attendance (COA). Students are under no obligation to accept every type of financial aid offered to them. Upon receiving the offer and choosing a desired type of financial aid, they should inform the school about it with a signed copy of a letter. However, the school will not compensate for refused financial aid by increasing the accepted one.

This article will discuss how award letters work, their essential components, and some of their shortcomings. We will also provide award letter samples and templates for various types of financial aid to familiarize you with their structure and content.

How Does an Award Letter Work?

After your FAFSA submission is approved, you will receive an award letter detailing the type and amount of financial aid the school can provide. You will receive the letter via email or at your home address.

In most cases, the information in the award letter is about the upcoming school year. The details included in the award letter will help you develop a budget plan for your college expenses.

The structure and content of award letters vary depending on the sender. Still, they usually include information about loans (such as Stafford and Perkins loans), grants (for example, Pell Grants and Federal Supplemental Educational Opportunity Grants), scholarships, and work-study eligibility. The school will expect you to send a written response specifying which type of award you accept and which part of the aid package you reject.

Note: Award letters usually arrive with the notification of acceptance or close to it. If you want to know the precise arrival time of your award letter, you can contact your selected school for more information.

Key Components of an Award Letter

With a few exceptions, every financial aid offer you receive from your schools should contain at least some of the following information. These are the essential components of a typical award letter:

Cost of attendance

The cost of attendance (or COA for short) is the approximate amount of money you will be expected to pay for attending your selected college for an entire school year. The COA includes tuition and additional fees, your dorm room and board, books, and other school supplies. In most cases, transportation is included as well. However, COA does not include additional costs of living while studying, such as travel or medical expenses.

Expected family contribution

The expected family contribution (or EFC) is the average amount your family can set aside for your college expenses, calculated based on the financial information you have provided in your FAFSA. This is only the estimate; your family does not have to pay the expected amount. The EFC is a crucial factor in determining the financial aid package for each student, as students with lower EFC will get higher monetary assistance, and vice versa. 

Type of financial aid

Colleges and other educational institutions offer several types of financial aid to their future and current students. This includes various forms of gift aid that require no repayment, such as Federal Pell, state, and need-based institutional grants, merit-based scholarships, employer-paid tuition benefits, and non-need-based student loans.

These are the main characteristics of each type of award:

  • Gift aid (scholarship & grant) is the most beneficial financial aid for students, as it does not have to be repaid. It comes in two forms, scholarships and grants. Scholarships come directly from schools and other private institutions. They are usually awarded to exemplary students with achievements in all or specific fields, such as sports. Grants, on the other hand, can also be provided by the government. Unlike scholarships, grants are reserved for students who genuinely need financial support, such as those from low-income families. If you have to decide between several types of financial aid, it is recommended to choose gift aid first.
  • A work-study program allows students to obtain college funding by working while studying. Many universities and schools participate in the federal work-study program that helps students find part-time employment to practice what they learn. Depending on the program, you will have to work for more or less money. You should know that your selected school is not obligated to find you a job if there are no openings for the position you are studying for. 
  • Student loans are the least popular option for students needing financial help because they have to repay them. If you have no other choice, a student loan will still be able to help you pay for college without putting you in a financial struggle. The maximum amount you can borrow as a first-year student is $3,500 per school year. Student loans offer better terms than other types of private loans, such as lower interest rates and flexible repayment. If you are eligible, you can apply for a direct subsidized or unsubsidized loan or have your parents apply for the so-called PLUS loan. The difference between the first two types is that the government will cover all interest on your subsidized loan. While you will need to pay for the interest on your unsubsidized loan. You can expect to receive up to $2,000 per school year as a first-year dependent student and as much as $6,000 per school year as an independent student. With a parent PLUS loan, your family can count on the total amount of your COA minus the total amount of other financial aid you will receive.

Net costs

An award letter sometimes outlines the net cost, which is the estimated amount of money you must provide yourself to pay for your college expenses. You can calculate net costs by reducing the cost of attendance by the total amount of your scholarships and grants. 

Additional information

Most award letters include additional information and guidelines for accepting, rejecting, and receiving different types of financial aid. For example, your award letter may inform you of the deadline for sending your response to the school and describe what you need to do to accept or decline financial aid formally.

You may also find necessary information about when to expect to receive your financial support and how. Your award letter may specify the period the financial aid will cover and the documentation you need to provide.

Tip: Every award letter is unique. Two schools can have very different award letters but should contain the above information in one form or another. If any information is missing from your award letter, you can contact your selected school and ask for clarification before accepting or rejecting any aid. The same happens if you need help understanding its content due to acronyms or technical language.

Sample Award Letter 

Given below are sample letters:

Sample 1


Mr. Paul Willis

302, Chestnut Lane, LA


Dear Mr. Willis,

We are happy to inform you that the University of Los Angeles has approved your Free Application for Federal Student Aid. Based on your FAFSA, your financial aid package for the school year of 2023/2024 may include Gift Aid (scholarships/grants) or Self-Help Options (Federal Work Study/Student Loans). You can expect an average cost of $50,000 in tuition and other fees, which will not include personal expenses.

Below, you will find a detailed statement of the financial aid package you have been approved for. You are under no obligation to accept every type of financial aid.

Proposed Financial Aid Package for the school year of 2023/2024

University Grant                                                                                                 $15,000

Federal Direct Subsidized Stafford Loan                                                     $3,000

Federal Perkins Loan                                                                                         $2,000

Federal Work-Study Program                                                                         $2,000

The final deadline for sending your formal response to the proposed financial aid package is September 15, 2023.


Jenna Coleman

Sample 2


Mr. Victor Cornell

47 W 13th St, New York

NY 10011

Dear Mr. Cornell,

I am pleased to inform you that you have been selected to receive the Stafford scholarship for the academic year of 2023/2024. On behalf of the NY University, congratulations!

Your annual Stafford scholarship has been approved based on your FAFSA and calculated using the financial information you have provided in your application. You can expect to receive a total of $27,000 in three equal payments for the academic year in December, March, and June. The University will send you the first draft as soon as we receive your signed response.

We will not need any additional documentation from you at this time. Please contact me through the financial award office if you have any questions or experience difficulties withdrawing your payment.

The NY University wishes you every success in your academic achievements this year.

Kind regards,

Helena Lewandowski

Free Templates

Given below are award letter templates:

Free award letter template in printable format 01
Editable award letter template in Word 02
Award letter template in Word 03
Downloadable award letter template in Word format 04
Printable award letter template in Word 05
Free Word award letter template 06
Formal award letter template with professional format 07

    Limitations of Award Letters

    A well-drafted award letter should help students and their families plan for the future and organize their finances better. Unfortunately, there are a few shortcomings of an award letter you should know:

    Different definitions of COA

    The cost of attendance varies significantly from one school to another. Virtually all award letters include at least some COA information, but significant variations exist. Some schools offer limited information (they specify only the cost of tuition and fees but omit the cost of room and board and vice versa) or include everything you need to know under a different name. Some schools provide only the key components of COA, and others include only the total amount. There are even schools that provide no COA information at all. 

    Complex identification of award components

    Financial award letters contain technical language that is difficult to understand. Most essential details, such as the cost of attendance and expected family contribution, are provided in acronyms that you can only translate with professional help. Information about loans often needs more crucial details about interest rates and repayment terms. Some letters do not specify the type of loan, so it is easy to confuse private loans with the need-based loans the school provides.

    Front loading of grants

    Financial aid packages often include different awards for freshmen and other students. Most schools will provide more grants to first-year students and leave loans for later years. There are two reasons for that. First, many students never return to college for the second year. Second, the direct loan limits increase with every academic year. We recommend you ask your award office whether or not they front-load grants to their students before you accept financial aid.


    Many schools do not have enough means and financial resources to provide the help promised in their award letter. It is a common practice for these schools to leave a gap and try to conceal it with non-need-based awards. Students should consult a school representative or another professional before they accept or decline an aid.

    Packing of non-need-based aid

    You do not have to come from a low-income family or have unique financial needs to be eligible for monetary assistance. On the contrary, some loans are available to students in all schools, whether or not an award letter explicitly mentions them. These are the so-called non-need-based loans, such as private student loans, PLUS loans, and unsubsidized loans.

    Listing specific lenders on the award letter

    Every financial aid package is a combination of various types of awards coming from different sources. Some are available from the school directly, while the government or private institutions ensure others. When loans are in question, students receive help from independent lenders that may or may not be listed on the award letter. Even when the school lists recommended lenders, you can borrow your money from a different source.

    Frequently Asked Questions

    When will I get my financial aid award letter?

    Typically, you can expect your award letter to come together with your acceptance notification. However, that is not always the case. Some schools compile financial aid lists in December or January after all students have submitted their FAFSAs. However, it is common for a school to send award letters in May and June after a spring application deadline.

    How can I compare financial aid award letters if they look so different? 

    Award letters can be challenging to understand, let alone compare. Because they can be very different, students must pay close attention to every term and try to translate every acronym. The critical information you should search for in every award letter is the COA and the total financial aid the school offers. Comparing these two types of information from different award letters should give you a general idea about which school provides better financial assistance.

    Can I negotiate my financial aid packages?

    Students unhappy with the amount of financial aid the award letter proposes can appeal to the school’s offer. That is especially helpful if your or your family’s financial situation has changed since you submitted your FAFSA due to a family member’s death, job loss, or other financial hardship. You can negotiate your financial aid package if the award is insufficient to help you attend college. 

    About This Article

    Christopher Taylor
    Authored by:
    Teaching | PhD in English Literature and Medieval Studies
    Christopher Taylor is a renowned expert in teaching. Currently serving as an Adjunct Assistant Professor of English at Austin Community College in Texas, he combines his deep knowledge of literature and art to create visually stunning and impactful designs. With a PhD in English Literature and Medieval Studies from the University of Texas at Austin, Christopher brings a unique perspective to his work, fusing creativity with academic rigor to produce engaging and captivating lectures.

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