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, unless you applied under Early Decision, you don’t want to rush into making any decision just yet. You’ll want to wait until you have responses from all your schools, whether they be acceptance or rejection letters.

What is Included in an Acceptance Letter?

Acceptance letters generally include a cover letter that is congratulating you and letting you know you’ve been accepted to the college. They will also include information about your next steps, what you should do if you want to attend the school, and any important deadlines you need to know. And your acceptance letter can sometimes include an offer letter!

What is an Offer Letter?

An offer letter refers to the information package you receive regarding financial aid and what institutional aid you qualify for at the particular college. It may or may not come with your acceptance letter. If you applied under Early Decision or Early Action, it is extremely unlikely to come with your acceptance letter, but usually is included with acceptance letters under regular decision. 

When you submit your Free Application for Federal Student Aid (FAFSA) may also impact when you receive this packet. Note: if you want to be considered for institutional financial aid, you almost always have to complete the FAFSA and have the application sent to your potential schools. This is another reason why it’s so essential that you complete your FAFSA every year you’re in college.

Offer letters may also be called an award letter, financial aid award letter, or financial aid offer or just offer letter. 

What is Included in an Offer Letter?

Offer letters will contain details on the financial aid packages you qualify for if you attend the school. This can include loans, grants, scholarships, and other forms of aid. The letters will have instructions for you to follow to claim this aid if you do decide to accept the college’s offer.

How Are Offer Letters Calculated?

Every college calculates financial aid differently. Schools that have more funding will usually offer a more generous financial aid package. However, their tuition may also be more expensive than most other colleges. That’s why it’s essential to compare offer letters past the initial amount.

Even though an offer looks like a lot on paper, it may not cover as much tuition as another college due to the sheer cost of the initial school. You may find that the college offering you the largest aid package is still unaffordable to you!

Comparing Your Offer Letters: Terms You Need to Know

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 number supplied.

Student Aid Index (SAI)

Your SAI, formerly known as Expected Family Contribution (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 and helps reflect the true cost of college. The federal government uses its own formula for calculating each student’s SAI based on their personal and financial circumstances. Colleges use your SAI 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 SAI from the school’s COA. It’s important to understand that the SAI 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:

Work study programs allow eligible students to work part or full-time on or near campus. Colleges operate these programs but 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. 

Student Loans:

Student loans can be federal or private loans. Most colleges and universities will not offer private loans as part of their offer letter, but there are exceptions.

Comparing Your Offer Letters: Financial Aid Offer Comparison Tool

Interpreting and comparing offer letters from different colleges is time-consuming, uses different formats, and can be a bit confusing even if you know all the terminology. That’s where College Raptor comes in. We have a Financial Aid Offer Comparison Tool that makes the work easy. Upload your letters and we’ll show you exactly how much you can expect to spend on any given college you’ve been accepted to. This can help you make an informed decision for your finances as well as your education!