How to Calculate the Net Cost

1. Identify the total cost of attendance for each college and university.

   • Beware of costs that aren’t listed on the award letter. Make sure that all direct and indirect costs are included in the cost of attendance.

   • Beware of unrealistic cost figures, especially for textbooks and transportation.

2. Add together all of the gift aid listed on the award letter. Gift aid is money that does not need to be repaid, such as grants and scholarships.

   • Beware of student loans masquerading as gift aid. Gift aid does not include loans, which must be repaid, often with interest.

3. Subtract the total amount of gift aid from the total cost of attendance. This is the net cost.

Factors to Consider When Comparing Award Letters Between Colleges

• In comparing your award letters, you should first consider the net cost as that will come out of your pocket one way or another, whether in repaying loans, or working.

• Compare the out of pocket costs before and after loans and if aid is renewable for more than one year.

• How much self-help aid (earn or pay back later) vs. gift aid (free money) the package contains.

• How much loan funding are you comfortable borrowing? How much will you need to work?

• If you are going to take out loans, how many loans will you be taking out and how much you will owe when you graduate?

• There are lots of costs that aren't included in aid letters. Make a list of everything you will have to spend money on. Other costs to consider may include travel to/from school, essentials like toiletries, bedding, and books.

• Find out if the aid renewable and what needs to happen to renew successfully and/or maintain eligibility.

I’ve Been Awarded Scholarship Money, Now What?

Congratulations! Money awarded to you in the form of a scholarship is usually money that goes directly to your college and applied to any tuition, fees, or other amount you owe. Any leftover funds are given to you. Some scholarship money might be sent directly to you in a check. The scholarship provider should tell you what to expect when you’ve been awarded the scholarship. If not, make sure to ask.

Scholarship money will affect the other student aid you receive, as your student aid when added together cannot be more than your cost of attendance at your college. You’ll need to let your school know if you’ve been awarded a scholarship so that the financial aid office can subtract that amount from your cost of attendance (and from certain other aid, such as loans, that you might have been offered). Then, any amount left can be covered by other financial aid for which you’re eligible. If you need further clarification on this or have questions, it is best to contact the financial aid office of the college you’ll be attending.

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