It’s college admission season, the time of year when you find out if you're accepted by the schools you hope to attend this fall.

It's also the time that you find out something else—how much financial aid the schools offer you.

The information comes in a financial aid award letter, which will be either mailed or emailed to you. The letters tell you the cost of one year’s attendance, any grants, scholarships, loans or work-study programs that you qualify for, and how much the colleges expect you to contribute. The total award package is made up of the money the school offers and any aid you may receive from federal and state sources.   

Financial aid award letters can be confusing.  One problem is that there are no standard forms or terms that describe the awards. The U.S. Department of Education, though, has developed a Financial Aid Shopping Sheet, a standardized award letter that it wants schools to use, to make it easier to compare financial aid packages.

But using the form is voluntary and fewer than half of higher education institutions in the U.S. have committed to using it.

“Schools are not trying to figure out how to save you money," says Kal Chany, author of "Paying For College Without Going Broke." "They want to give you the least amount to get you to go there.”

Financial Aid Offers

Here is what you'll want to do when you get your financial aid award information:

  1. Determine how much you'll pay. To do this, look at the "total cost of attendance number" the school lists. Then subtract grants and scholarships (that’s the “gift” aid that you don’t have to pay back) to get the net cost. Be sure to account for all expenses. Some schools report total cost as tuition, fees, room and board. Others include books, transportation, school activity fees and living expenses. You’ll want to factor all those costs in if the school doesn't. Remember that you may need to budget more for expenses, which could include everything from laundry to holiday travel.
  2. Determine which kind of loan you need. Federal loans usually have lower interest rates and more flexible repayment options than private loans. There are two kinds of federal loans. Direct loans can be subsidized or unsubsidized. Subsidized loans are based on financial need and the federal government pays the interest that accrues while you are in school, and until six months after you leave. Unsubsidized direct loans are not need-based, and interest starts accruing as soon as you take the loan. Then there are federal Perkins loan, which are funded by the government but distributed by schools, which are the lenders. 
  3. Look into work-study programs.  Work-study is a federal program that schools offer. But you have to find an eligible job and work the allotted hours to get that money. Of course, there’s no guarantee you’ll get a job. These programs are offered on a first-come, first-serve basis so contact the university early to find out how to find opportunities.     
  4. Think long term about aid.  While you are given financial aid information for one year, think about how much aid you'll get over the four years you’ll be in school. Some schools award more grant money upfront to entice you to enroll and then reduce the amount in later years.  Ask which scholarships and grants are renewable and what the requirements are to qualify each year. You may need to maintain a certain grade point average, for example. Even if the amount of the grant and the scholarship you get stays the same, keep in mind that the tuition could rise.
  5. Appeal your financial aid award. If you don't believe the financial aid package meets your needs, try to appeal it with the school's financial aid office. If you received a better offer from a comparable school, that may help you to ask for a more favorable award. Or if you had a change in circumstances since you applied, such as a job loss, a divorce or a big medical expense, contact the school to ask that they review your finances. 

Once you understand the offer in your award letter, you can use this tool from the Consumer Financial Protection Bureau’s to compare school costs.