Translating your Financial Aid Award

Once you open your financial aid award letter, you might start feeling like you’re reading another language. To help you translate your letter, here are some of the unfamiliar phrases you may come across.


This will be the first word to catch your eye when opening up your letter. If awarded a sum of financial aid, keep note that the money isn’t all free. Chances are this total includes:

  • Borrowed Money (Loans)
  • Earned Money (Work-study)
  • “Free” Money (Scholarships, grants, fellowships)

Be sure to calculate your final amount by subtracting the loan amount from your total award to figure out how much money you won’t be required to pay back.

Cost of Attendance

Also known as COA, Cost of Attendance is calculated by the college. This number varies because it depends on each college’s individual costs for:

  • Fees: Club fees, printer fees, etc. These are any fees that the college charges their students not directly related to their courses.
  • Books: Every course you take will require at least one textbook. This will be the estimated cost of what you will spend on books every year.
  • Room and Board: Price of dormitories or apartments close to campus.
  • Living Expenses: Includes the price of utilities, supplies, personal expenses, transportation and university health insurance.

Financial Aid

Financial aid is the money you’re provided for higher education via these options:

  • Grants
  • Loans
  • Scholarships: Money awarded based on the amount of scholarships you earn. If you’re currently looking for scholarships, you may want to start with our Scholarship Search tool.
  • Work-study: This tends to be a part-time job offered by the school to help you earn some extra money. The idea is that this money would help to cover your college expenses.


For undergrads, the average amount of aid received from any sources was $10,800 in 2011-12. Do you know which amount of aid comes from which type of loan? Primarily, they are sorted in two ways:

  • Credit-Based: Loans that have a lender look into your credit history. Private student loans are credit-based.
  • Federal Loans: Loans that come from the federal government in order to pay off your college programs. These loans are based on your financial situation.

These types of loans are broken down even further to:

  • Direct PLUS: These are federal loans for graduate or professional students and parents of dependent undergraduate students.
  • Direct Consolidation Loans: You can consolidate multiple federal loans into one loan. The result is a single monthly payment instead of multiple payments.
  • Direct Subsidized: These loans are available to undergrads that demonstrate a financial need. The school determines the amount you can borrow, and the amount can’t exceed the need. The U.S. Department of Education pays the interest.
  • Direct Unsubsidized: These loans are available to both undergrad/grad or professional degree students. You aren’t required to show financial need to be awarded these loans.
  • Federal Perkins Loan: These are low-interest federal loans for undergrad and grad students with an exceptional financial need.

Still confused about your financial aid award letter? Consider reaching out to the financial aid offices of the colleges you’re considering for help.

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