Financial Aid Package - How do I read this???

I have just received my financial aid letter from the school I want to attend. However, I am really confused about the award letter (I’ve never even seen one before).

*The amounts are for the year:

There is “Average Direct Cost (Yours may vary)”
Tuition: $24,200
Fees: $1,160
Average Room: $3,930
Meal Plan: $4,340
Total: $33,630

Down below it says “Budget”: $38,600
EFC: 0
Need: $38,600

*The Budget is where I am confused. My paper defines the Budget as: Cost of Attendance. Used to calculate tuition, fees, room, books, personal, etc.

Offered $26,634 in gift aid and $5,500 in loan aid (my sisters husband says to try to avoid school loans)
Grand total aid: $32,134

I am not sure what I should really be focusing on - the average cost or the budget? Assuming that I do not accept any student loans, I am also confused on how much I would need to pay out of pocket each year.

Any help figuring this out would be greatly appreciated! (I am going to talk to my councilor when I go back to school but I thought someone could give me some insight in the mean time)

Well you have been offered $26,364 in money that you will not have to pay back. Of this, 25,360 will go to tuition and fees leaving you with $1004. You would still have to pay for “Room and Board” so rent and food and other expenses like travel.

If the budget equals the COA amount it includes estimates for expenses that won’t be directly billed by the school: books, personal living expenses and transportation. Those costs aren’t directly billed by the U and can be saved on usually. How much you can save depends on if you can drive a few hundred miles to the school or will be paying airfare to fly coast to coast at the start and end of the school year and for breaks etc. If you eat out a lot your personal expenses will be higher. The $33,630 is the amount that will be billed by the school during the year.

So the aid including the loan leaves you about $1500 short on the billed expenses. Add to that books, personal expenses and transportation. Can you and your family make that up somehow? You can work summers and 10-12 hours a week during the school year to help with that. Maybe you can get the least expensive dorm available.

Yes it is wise to avoid LARGE student loans but you still may need to take up to your student direct loan in order to attend college at all. If you are 0 EFC then 3,500 of the loan offered is subsidized, which means the gov’t pays the interest while you are in school. The other 2,000 would be unsub which means they would accrue interest.

But you have a GAP. The estimates of what you may need for everything–the direct costs plus estimates for books, personal and transportation-- is about 6,000 over your aid + student loan. If you don’t take a student loan you are short about 11 to 12k. It is pretty clearly spelled out

38k Total COA

26k gift aid

12k shortfall

Possible sources for shortfall

student loan 5,500
summer job 3,000
school year job 1,500
parents ?

The CoA is only an average value as it may depend on your housing option, major, classes with additional fees, etc. The budget may include books (which is usually part of CoA but not in your case), medical insurance, travel (for OOS student) or transportation.