What is the Difference Between an Offer Letter and an Acceptance Letter?

‘Offer letter’ and ‘acceptance letter’ are two terms you will come across frequently while researching the college admission process. Many people use these terms interchangeably, which is not correct. An offer letter is not the same as an acceptance letter. Here are the vital distinctions between the two.

student shaking hands with college official

What is an Acceptance Letter?

An acceptance letter is a letter you receive from colleges informing you that you’ve been accepted into the school.

Receiving that first acceptance letter can be exciting but don’t rush into making any decision just yet. If you’ve applied to multiple colleges, wait a while to more acceptance letters and offer letters to come in.

 What is an Offer Letter?

An offer letter comes from the college and outlines the financial aid package they’re offering you. Different colleges have different names for this offer letter. Other names include an award letter, financial aid award letter, financial aid offer or just offer letter. You may receive this letter at the same time as your acceptance letter or you may receive it later. It depends on when you submitted the FAFSA and also each college’s timeline for processing application. Submitting the FAFSA is almost always a prerequisite for receiving federal and institutional financial aid.

Your completed FAFSA is sent to all the schools you’ve listed on the form. These schools use the information submitted through the FAFSA to calculate your financial aid package. The offer letter that you receive contains the details of the financial aid that’s being offered to you. This aid package is valid for one year only. You have to file the FAFSA every year you’re in college to determine your aid eligibility for that particular year.

The Importance of Really Understanding Offer Letters

Every college calculates financial aid differently. Colleges that have larger funding will usually offer a more generous financial aid package. However, their tuition may also be more expensive than most other college. When comparing offer letters, do more than just check the amount of aid offered. It’s more important to compare how much you’ll have to pay to cover the gap between the aid package and the cost of attendance. You may just find that the college offering you the largest aid package is still unaffordable for you.

Understanding the terms in your offer letter is important so you can make a proper comparison. However, interpreting the terms can get confusing, as there is no standard format that all schools use. To simplify the process, we’ve put together some of the more common terms you’ll come across in your offer letter.

Cost of Attendance (COA):

The Cost of Attendance or COA refers to the estimated cost of attending that particular school for one academic year. The COA usually includes the tuition, room and board, fees, transportation, books, and supplies. The COA in the offer letter is just an approximate cost. Your actual cost may be more or less than the COA.

Expected Family Contribution (EFC):

Your EFC is based on the information submitted on your FAFSA. This is the amount that your family is expected to pay towards your college education. The federal government uses their own formula for calculating each student’s EFC based on their personal and financial circumstances. Colleges use your EFC to determine financial need.

Financial Need:

Financial need is the difference between the cost of attendance and your ability to pay for college. It is determined by subtracting your EFC from the school’s COA. It’s important to understand that the EFC is a fixed amount that’s calculated using the information on your FAFSA. However, your financial need is not a fixed amount. Every college uses their own formula for calculating financial need. Your perceived need can vary greatly from one college to another.


Work-study programs allow eligible students to work part or full time on or near campus. Colleges operate these programs though the federal government funds them. Not all students qualify for work-study. If you ticked the work-study box in your FAFSA and if you qualify, your offer letter will include your work-study details.

Gift Aid:

Gift aid is essentially free money. You don’t have to pay it back. Gift aid comes in the form of grants or scholarships. Your offer letter includes details about the amount of gift aid you’ll receive.

Student Loans:

There are several different types of federal student loans available. Each one has its own eligibility requirements, interest rates, and other terms. Your offer letter will specify which federal loans you are eligible for and how much you can borrow. It’s advisable to borrow only as much as you need and decline the rest. Remember, you will have to repay whatever you borrow with interest.

An Offer Letter Comparison Tool

Interpreting and comparing offer letters from different colleges is time consuming and a bit confusing. That’s where College Raptor comes in. We’ve got a brand new Offer Letter Comparison Tool that makes the work easy. Upload your letters and we’ll show you the net price estimates, scholarships, and more. You want to make the most informed decision possible. With College Raptor you can discover the most affordable college options for you.


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