Updated: Aug 25, 2022
What are Pell Grants?
Learn about the Federal Pell Grant, including what it is, how to apply, who is eligible, and whether you need to pay them back with Discover Student Loans.
Article highlights
College acceptance season is an exciting time—high school seniors across the country find out which colleges and universities are offering them a spot and start making decisions about where to attend. A big part of that decision-making is based on the financial aid award letters that students also receive. These can sometimes bring stress and confusion since award letters can be difficult to decipher and vary from one school to another.
Financial aid award letters generally include grants, scholarships, work-study programs, federal student loans, and your Expected Family Contribution (EFC). Because each school uses its own template for award letters, it can be challenging to compare college costs apples-to-apples. But evaluating them doesn’t have to be complicated. Just follow these five steps.
Your financial aid offer may contain a mix of different types of aid. It’s important to know the differences between these, since some will have to be paid back, while others will not.
When you're ready to compare financial aid offers, first print all of your award letters and grab a highlighter or two. Carefully read each letter, highlighting each type of aid and the amount offered. You may want to use two different colors to highlight, one for loans that will need to be repaid and another color for scholarships and grants that do not need to be repaid.
Now that you have all the information in front of you, it’s time to compare your offers. There are tools, such as the Award Letter Comparison tool from Discover® Student Loans, that can help guide you through this process. It is important to understand and compare the costs of attending each school, the various types of aid you are being offered (free money vs. money you must pay back), and how much money each school expects you and your family to contribute to your education.
When comparing the cost of attendance (COA), take note of these numbers. They may not all be listed on every award letter, but it’s important to know the full cost associated with attending each school, so do a little digging if you have to.
You’ll also want to compare the various types of aid being offered, such as:
Financial aid offers typically cover only one year in school, so families must complete the Free Application for Federal Student Aid (FAFSA®) every year. Some forms of aid like scholarships or grants may be guaranteed for four years, though most are only guaranteed for the first year. Families should ask the college’s financial aid office about the likelihood of aid being extended and get the answers to their questions in writing.
Students can and should continue applying for outside private scholarships throughout their time in college, since that is free money that doesn't have to be paid back. Leverage scholarship search tools to help you find them, such as our Free Scholarship Search.
Keep in mind that when you compare schools, costs aren't the only factor. You should also consider location, academic rigor, graduation rate and employment rate, as well as things like campus culture. (A college campus visit can be really helpful.) The right school for you is the one that will give you the best combination of education and experience, while leaving you with the least amount of debt.
FAFSA® is a registered trademark of the US Department of Education and is not affiliated with Discover® Student Loans.