Cost Section

Tuitions & Fees: Tuition is a given, though it may not appear on your award letter. If it doesn’t, look it up for the upcoming school year. (Tuition generally increases a little every year.) Fees cover all those “free” amenities on campus: “free” athletic tickets, “free” gym, “free” tech support, “free” counseling center, “free” concerts, etc. There can also be extra lab fees for STEM classes. One fee you can generally get taken off is the health insurance fee, as long as you submit proof you are on your parents’ insurance plan. Also, optional add-ons like parking stickers are usually not included.

Room & Board: These costs can have some flexibility. If you live in a suite or have a single room, your housing will be more expensive. Most colleges require those who live on campus to have a meal plan. My advice is to downgrade from the unlimited meal plan as soon as possible. No one needs that much food unless they are an athlete, only eat in the dining hall, or wake up every morning before class to eat a giant stack of pancakes.

Pro Tip: Many schools will let you apply for a resident advisor (RA) position after your first year. This can not only reduce housing costs; in some cases you can sometimes make money for living there. Consider becoming an RA if you enjoy organizing ice cream socials and don’t mind politely policing other forms of recreation.

Total Direct Costs: Add up your Tuition & Fees and Room & Board lines. This is how much your first year will cost before financial aid. (Gasp!) Colleges may completely omit cost information on the award letter. Or they may provide an exhaustive list, including indirect costs like travel (read: airfare/gas money to get there), personal expenses (movie tickets, deodorant, etc.), and books & supplies. While you do have to pay for those indirect costs, they will not be billed directly by the college.

Gift Aid Section

Pell Grant: A Pell Grant is a free federal grant you received because a) you filled out the FAFSA and b) you qualified. If you check your FAFSA Student Aid Report (SAR), you will either see Pell Grant with its amount listed or you will only see the standard federal loan.

State Scholarships/Grants: These can be a little tricky to figure out, but don’t sweat it. If the award letter says something about a “grant” or “scholarship” with the name of your state attached to it, it probably goes here. Again, the link to find out about your state’s aid program is in the Treasure Trove. If you think you’re eligible for something that’s not on your award letter, check with your college’s financial aid office. They may be waiting on the state for final numbers but can likely give you a solid estimate.

Institutional Scholarships/Grants: Scholarships are the free money you’re receiving from the college because you’re awesome and they want your awesomeness at their school. Grants are the free money you’re receiving from the college because they want to help you make their school more affordable. (We mostly see these from private colleges.) Either way, it’s free money!

Other Scholarships: Did you apply for and win any of those local scholarships through your high school? Or an online scholarship? Employers, unions, fraternal organizations, and community organizations are the most common sources of “outside” scholarships. Record all those outside scholarships and any other type of free funding you will receive outside your family here.

Beware: Some colleges deduct outside scholarship dollars from your institutional aid! Be sure to ask your financial aid office if your outside scholarships will “stack” on top of the aid they’ve already given you.

Total Gift Aid: Add up all your gift aid and put that amount here. Don’t sweat whether you got the right things on the right lines within this category. The total will be the same. What is important to know is how you received the money and how to make sure you get the money again next year.

Don’t assume it will be the same each of your four years. Make sure by talking out any questions you have with your college’s financial aid office. You’ll be amazed how much heartache and confusion this will save later!

Loans Section

Subsidized/Unsubsidized Federal Loans: 

Everyone who fills out a FAFSA is offered the option of taking out unsubsidized federal student loans. What can differ is whether or not you are offered a subsidized loan.

What’s the difference?

A subsidized loan is a loan that the federal government pays the interest on while you’re in college (and for a few months thereafter).

An unsubsidized loan is a loan that accrues interest (gets bigger) while you’re in college.

The maximum loan (of both there types together) a student can take out for their first year is $5,500. The maximum allowed increases each year.

These loans are also typically “deferred” loans, which means you don’t have to make payments on them until you’re done with school. This includes graduate school, medical school, etc.

Other Loans: Only a small percentage of student borrowers arrange for outside private loans from a bank or other institution because they tend to have higher interest rates and require a cosigner. Before getting an outside loan, check the lender’s interest rate against the federal rate.

Total Loans: Add up all your loans. 

Pro Tip: Loans aren’t automatically dispersed. You can refuse them and pay the amount out-of-pocket instead. If you do decide to take out any federal loans, you’ll need to do two things:

  1. Entrance Counseling: an online module to make sure you understand how loans work, and

  2. Sign a Master Promissory Note: a binding legal document saying that you, the student, will pay back this money after you graduate.

You can complete both of these steps  on the federal government’s student loans website, conveniently named

Now for some math. Don’t worry. This is calculator-active.

Equation #1: Total Direct Costs – Total Gift Aid = Total Billed Costs

Total Billed Costs: This is how much you will eventually pay (with interest if you’re taking a loan) for your first year at this college. Multiply by four and you’ll get a ballpark of how much your college degree will cost at this school.

Bear in mind, tuition tends to increase every year, and the percent of need met can decrease after first year for a number of reasons including not meeting Satisfactory Academic Progress (SAP) and a regressive policy that some colleges practice called “bait and switch.”

Equation #2: Total Billed Costs – Loans = Estimated Bill

Estimated Bill: This is how much you have to pay (or arrange to pay) before the end of your first year of college. Typically, it’s split into two payments: one due in August and one due in December/January. 

Families can set up monthly payment plans starting in the summer. Talk to your college’s financial aid office to investigate this option by no later than June 30th before you start.

Bonus equation: Divide your Total Billed Costs by 10. That’s how many hours you’d have to work a $10/hour job to pay for this one year. So don’t skip class!

Now for some odds and ends…

PLUS Loans: These are federal loans that parents can apply for to help them pay for their child’s college expenses. Most parents with decent credit are eligible, however, and just because it’s listed on an award letter doesn’t mean the money’s guaranteed. The dangerous aspects of these loans are twofold. First, eligible parents can borrow enough to cover the cost of attendance minus your gift aid and student loans; but this is likely way more than you could possibly need to pay the bill. Second, the interest rate is higher than that of a student loan. These factors combined can get families into a lot of trouble if they don’t have a clearly defined plan to repay the money. While these options may be okay for a little assistance, hopefully, this book has helped you find a college that doesn’t place a heavy financial burden on you and your family. 

My College Expenses: Your college includes things like books, personal expenses, and transportation when they calculate the Cost of Attendance. Just because your college doesn’t charge you for these things directly doesn’t mean they don’t cost money. Each college usually provides an estimate of these expenses, but these estimates may be way off for your situation. Add up for yourself (and maybe ask for parent advice about) how much you will need to budget for the following:

  • A new laptop/device and its accessories

  • Books & materials like pens, notebooks, etc.

  • Gas/airfare to get from your home to campus at least four times

  • Spending money

  • Toiletries (deodorant, shampoo, Tylenol, bandaids, and all those other items stocked under your bathroom sink)

  • Dorm room furnishings (a powerstrip, a light, a rug, those weird-sized sheets)

Add all these expenses up. Be ready for the “you need a summer job” talk.

Work Study: Federal work study is a government-funded program for students who qualify to work on campus in order to earn money for college. (How do you qualify? You guessed it. FAFSA.) If this isn’t on your award letter, it doesn’t mean you can’t find a job on or around campus to fund your expenses from the previous section. It just means you won’t be guaranteed an on-campus job when you get there. If this is on your award letter, it’s important to know two things: 1) you need to make sure you figure out how to get connected to a job on campus as soon as you get there, and 2) Ninety-nine percent of the time, this money is deposited into your bank account (instead of being deducted from your college bill), meaning you can spend it one whatever you like…Be smart and save though, because that money can help pay for next semester.

Did we miss something? Is there something on your award letter that doesn’t seem to fall into any category described above? Call your financial aid office for clarification.

Okay, so you’ve filled out your award letter analyzer…

How does it look? Are your schools roughly equally affordable? Or are some way cheaper than others? Does this influence your decision about where you might go in the fall? Talk this over with your family to make sure everyone’s on the same page.