An admission letter tells you that you got in. The financial aid offer tells you whether you can afford to go. The trouble is that offers don't look alike. Federal Student Aid says plainly that "there's no standardized format or delivery method for financial aid offers," so two schools can describe very different deals in ways that look the same at first glance (Federal Student Aid: How to evaluate your aid offers).
This guide walks through an offer the way a financial aid officer would read it, so you end up with one number per school that you can actually compare.
Step 1: Find the full cost of attendance
Start with the cost of attendance (COA), not the aid. COA is the school's estimate of a full year: tuition and fees, housing, meals, books and supplies, transportation and personal costs. The U.S. Department of Education tells schools to always include COA in an aid offer and to break it into its parts, including whether housing is on or off campus and whether tuition is the in-state or out-of-state rate (FSA Partners: Issuing financial aid offers).
If an offer shows only tuition, or leaves out COA entirely, ask the financial aid office for the full figure before you compare anything. You can also check the school's published COA on our cost of attendance page, which uses the federal IPEDS cost survey, and on each school's page in the university explorer.
Then add the costs a school might not count. Federal Student Aid recommends adding "unexpected costs" such as a longer commute before you subtract any aid (Federal Student Aid).
Step 2: Sort every line into one of three buckets
Every dollar in an offer is one of three things, and the Department asks schools to list them separately (FSA Partners):
- Gift aid (grants and scholarships). You don't repay it. Examples are a Federal Pell Grant, a state grant, or the school's own need-based or merit scholarship.
- Work-study. It is not money in hand. You have to find a job and work the hours to earn it, and Federal Student Aid notes that work-study income "isn't guaranteed."
- Loans. You repay them with interest. Look for abbreviations like "L," "LN," "Sub" (subsidized) and "Unsub" (unsubsidized). With an unsubsidized loan, interest starts building right away (Federal Student Aid).
The Department also tells schools to stop calling the whole package an "award," because "loans are not awards" and work-study is only the chance to earn money (FSA Partners). If a letter says "total award" and that total includes loans, don't treat it as money you never repay.
Step 3: Calculate your net cost yourself
Net cost is the cost of attendance minus grants and scholarships only. That is the Department's definition, and it is the most useful single number for comparing schools (FSA Partners).
Net cost = cost of attendance − (grants + scholarships)
Watch for one specific trick. The Department warns schools not to subtract private loans or Parent PLUS loans from COA, or to "zero out" the cost with those loans. An offer that shows "$0 remaining" because it filled the gap with a parent loan still leaves your family owing that amount, plus interest.
Whatever is left after net cost gets covered (see Ways to pay for every option) by savings, income, work-study, payment plans or loans. Federal Student Aid suggests using aid in this order: grants and scholarships first, then work-study, then student loans (Federal Student Aid).
Step 4: Check the loans against the 2026-27 rules
Federal loan limits changed for loans first disbursed on or after July 1, 2026. Older articles, including some on StudentAid.gov itself, may not reflect this yet. According to the Department's official loan-limit guidance (FSA Partners: Loan limits FAQ; COD system changes for 2026-27):
- Undergraduate subsidized and unsubsidized loan limits did not change.
- Parent PLUS loans are now capped at $20,000 a year and $65,000 in total per dependent student, shared by all parents. Before, parents could borrow up to the cost of attendance minus other aid.
- Grad PLUS loans are eliminated for new borrowers in periods of study beginning on or after July 1, 2026.
- Graduate students can borrow up to $20,500 a year in unsubsidized loans, with a $100,000 aggregate limit. Professional students (law, medicine and similar) can borrow up to $50,000 a year, with a $200,000 aggregate limit (FSA Partners: Loan limits FAQ).
Some continuing students qualify for an "interim exception" that keeps the old rules for a while, so ask the financial aid office which limits apply to you. The practical takeaway is that a large gap a family might once have covered with a Parent PLUS or Grad PLUS loan may now need a payment plan, a private loan, or more grant aid. That makes the net cost from Step 3 even more important. Before borrowing, check the grant, work-study and assistantship options in Ways to pay, or the graduate funding guide if you're heading to grad school.
Step 5: Look for the College Financing Plan
Some schools attach the Department's standardized College Financing Plan, a one-page form that lays out costs, grants and scholarships, net cost, and loan and work options the same way for every school that uses it. The Department publishes it each year, and the 2026-27 and 2027-28 versions are both available (U.S. Department of Education: College Financing Plan). Using it is optional for most schools, so you may not see it, but if two of your schools both send one, comparing them is much easier.
Step 6: Put the offers side by side
Build a simple table with one column per school and these rows:
| Row | School A | School B |
|---|---|---|
| Cost of attendance (from the offer) | ||
| Costs the school didn't count (commute, insurance, flights) | ||
| Grants and scholarships (gift aid) | ||
| Net cost (total cost minus gift aid) | ||
| Work-study (if you'll actually get a job) | ||
| Federal student loans | ||
| Remaining gap (parent loans, private loans, savings) | ||
| Is the scholarship renewable? What GPA keeps it? |
Federal Student Aid uses the same kind of grid in its own guide (Federal Student Aid). Before you have offers, you can estimate with the compare tool, which shows federal College Scorecard net price by family income band for up to four schools.
Questions to ask the financial aid office
- Is this cost of attendance for on-campus or off-campus housing, and for in-state or out-of-state tuition?
- Which scholarships renew every year, and what are the conditions?
- Does this package assume I'll get a work-study job?
- Which federal loan limits apply to me under the July 2026 changes?
- If my family's finances changed, can I ask for a review of my aid?
If you're an international student
International students generally aren't eligible for federal student aid, so their offers come from the college itself and outside sponsors (see Ways to pay for international undergraduates). The same rules apply: find the full cost (including health insurance and travel), count only grants and scholarships as gift aid, and be cautious about loans. Many U.S. visa processes also ask you to document that you can pay the remaining cost, so the net cost matters even more. Our international aid page shows what schools report giving international students in their Common Data Set, and our need-blind and full-need list lists the colleges that, per official or cited sources, admit international students need-blind and meet full need.
The bottom line
Ignore the "total aid" headline. Find the full cost, subtract only grants and scholarships, and compare that net cost across schools. Then decide how much of the rest you're willing to borrow under the 2026-27 rules. For every other way to cover the gap, see Ways to pay.
Figures and rules above come from the U.S. Department of Education and Federal Student Aid, checked October 22, 2026. Aid rules change, so always confirm the details with each school's financial aid office.