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You did your homework, researching dozens of colleges and sending out applications to a handful that you decided were right for you. If all went well, you’ve got acceptance letters from more than one school.

Now you’re ready to compare the financial aid award letter that you should have received from each school that accepted you. Here’s how to zero in on the most important numbers, and compare financial aid offers you’ve received from each school before making your final decision.

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What is a financial aid award letter?

A financial aid award letter lists all of the aid that a college is prepared to offer you. Depending on the information that you submitted on your Free Application for Federal Student Aid (FAFSA), you may be offered scholarships and grants, work-study, and student loans.

An offer of financial aid typically shows you exactly how much money you’ll need to come up with to pay for your first year of school after subtracting “gift aid” that doesn’t have to be repaid, like grants and scholarships. That number is called the net price. The best way to make a fair comparison between the financial aid offers you receive is by comparing the net price.

If you want to see an example of the information that the U.S. Department of Education recommends colleges provide in their award letters, see this model “shopping sheet,” that’s being adopted by some forward-thinking schools.

How to compare financial aid award letters

Comparing the financial aid offers you receive from each school is straightforward — if your award letter provides a net price. But schools often fail to include the net price in their financial aid award letters, so in some cases you’ll have to calculate it yourself.

For example, say your total cost of attendance is $22,000 a year and you’re offered $4,000 in gift aid. Your net price is $18,000.

Just make sure that your total cost of attendance calculation includes tuition and fees, room and board, books and supplies, transportation, and personal expenses. Some schools only list tuition and other costs that you pay directly to them in their offer letters. Also, don’t include aid like loans and work-study when tallying up “gift aid,” because you have to pay it back or earn it.

The lower the net price, the less you’ll pay for your degree. Until you compare net prices, you might not realize that a school you thought was out of reach is actually a better deal than a college you expected to be cheaper.

If any of the information that you need to calculate the net price is missing from your financial aid offer, contact the school’s financial aid office.

Can I negotiate a better offer of financial aid?

If your heart was set on going to a school that made you a disappointing financial aid offer, you can try to negotiate a sweeter deal — particularly if you got better offers from other schools.

Also, if you or your family are experiencing a new hardship like unexpected medical bills or unemployment, you might be able to negotiate a better financial aid package.

There are two types of appeals you can make if you need to negotiate:

  1. Need-based appeal: This appeal usually involves going to the school’s financial aid office. If you or a family member have lost a job, been demoted, or fallen ill, providing documentation can bolster your case. Many schools will have a form for you to fill out, and you can also provide a cover letter with your documentation.
  2. Merit-based appeal: This is typically made to a school’s office of enrollment or admissions. You’ll want to provide any award letters you’ve received from other schools and ask your school of choice if they can match them.

More ways to pay for college

If your net price still seems high and you’ve exhausted all the scholarships and grants available to you, remember that most students borrow for college.

If you must borrow for college, start with federal student loans and try to keep the total amount borrowed in line with what you expect your annual salary to be after graduation.

If you max out on your borrowing limits for the most affordable federal loans, compare private student loan rates offered by lenders before turning to costlier federal PLUS loans.

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