student loan application letter

Cover Letter For Student Finance Sample: Free & Customizable

In this article, I will guide you through a step-by-step process to create an effective cover letter for your student finance application, including a handy template and tips from my personal journey.

Key Takeaways Purpose : Understand the importance of a cover letter in your student finance application. Structure : Learn the standard format of a cover letter and what to include in each section. Personalization : Discover how to tailor your cover letter to your individual circumstances. Evidence : Find out how to back up your claims with concrete examples. Professionalism : Get tips on maintaining a professional tone while showing your personality. Template : Use the provided template as a starting point for your own cover letter. Final Tips : Benefit from personal insights and experiences to enhance your cover letter.

Step-by-Step Guide to Writing Your Cover Letter

Step 1: start with your contact information.

Like any formal letter, begin with your name, address, phone number, and email at the top. Ensure this information is accurate and up-to-date.

Step 2: Address the Recipient Properly

If you know the name of the person handling your application, address them directly. If not, “Dear Sir/Madam” is a suitable alternative.

Step 3: Open with a Strong Introduction

Start by stating the purpose of your letter. Mention the specific student finance package you’re applying for and briefly introduce yourself.

Step 4: Explain Your Educational and Career Goals

Detail your academic achievements, career aspirations, and how the financial aid will help you achieve your goals. Be specific, and connect your goals to the financial support you’re seeking.

Step 5: Outline Your Financial Situation

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Clearly explain why you need financial assistance. Be honest about your circumstances, but maintain a tone of optimism and determination.

Step 6: Conclude with a Call to Action

Politely request the recipient’s consideration of your application and express your willingness to provide further information if needed.

Step 7: Sign Off Professionally

End with a formal closing, such as “Sincerely,” followed by your name and signature.

Personalization Is Key

Remember, your cover letter should reflect your unique situation. Don’t just copy and paste a generic template. Use the structure as a guide, but infuse it with details that are specific to your experiences and needs.

Template for a Student Finance Cover Letter

[Your Name] [Your Address] [City, State, Zip] [Phone Number] [Email Address] [Date]

[Recipient’s Name or “Dear Sir/Madam”] [Title] [Company/Organization] [Address] [City, State, Zip]

Dear [Recipient’s Name or “Sir/Madam”],

I am writing to apply for [specific student finance package], as advertised [mention where you found the listing, if applicable]. As a [your year in school] student at [your school], pursuing a degree in [your field of study], I am earnestly seeking financial assistance to continue my education and achieve my career goals in [specific career field].

During my time at [your school], I have maintained [mention any academic achievements or honors]. Despite these achievements, my financial situation is such that without additional support, continuing my education could be challenging.

[Provide a brief overview of your financial situation, being specific about your needs without oversharing personal details.]

The funding I am requesting would not only assist me in covering tuition fees but also enable me to participate in [mention any extracurricular activities or academic opportunities that require funding].

This support is crucial for me to continue excelling academically and to contribute positively to my community through [mention any community service or extracurricular involvement].

I am committed to my education and to the path I have chosen in [your field of study]. Your financial support would greatly assist me in achieving my academic and career objectives, which are [briefly mention your career goals].

Thank you for considering my application. I am eager to provide any further information needed to support my case. I look forward to the opportunity to discuss my application in more detail.

[Your Name] [Your Signature, if sending a hard copy]

Frequently Asked Questions (FAQs)

Q: How Do I Explain My Financial Situation in a Student Finance Cover Letter?

Answer: In my experience, being clear and concise is key. I mentioned specific financial challenges, like family income and educational expenses. 

I also provided evidence, such as income statements or bills, to support my claims. It’s important to be honest and straightforward about your financial need.

Q: What Should I Include in the Introduction of My Cover Letter?

Answer: I always start by introducing myself, stating my current educational status, and the purpose of the letter. For example, I might write, “My name is John Door, a second-year student at XYZ University, writing to apply for the ABC Financial Aid Program.” This sets a clear context right from the beginning.

Q: How Long Should My Student Finance Cover Letter Be?

Answer: Based on my experience, brevity is crucial. A one-page cover letter is usually sufficient. It’s important to be concise yet comprehensive, focusing on the most relevant details about your financial situation and educational goals.

Q: Is It Necessary to Mention My Academic Achievements?

Answer: Absolutely! I always highlight my academic achievements, as they demonstrate my commitment to education and potential for success. This can include GPA, awards, or participation in relevant projects or extracurricular activities.

Q: How Can I Make My Cover Letter Stand Out?

Answer: Personalizing the letter makes a big difference. I address it to the specific individual or committee handling the finances, if possible. Also, I share a brief personal story related to my educational journey and financial needs, which adds a unique and memorable element to the letter.

Q: Should I Discuss My Career Goals in the Cover Letter?

Answer: Yes, I find it beneficial to briefly mention my career aspirations. This shows the committee how the financial aid will contribute to my long-term goals and assures them that their support is a valuable investment in my future

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Applications , Request Letters

16 Loan Application Letter Samples | Writing Guide (+Template)

In life, many find themselves in situations where they need to seek financial aid, be it for personal reasons or business ventures. Applying for a loan often requires not just meeting specific criteria but also writing a compelling loan application letter. This letter should provide a detailed account of how you plan to utilize the funds and why you’re a trustworthy candidate. If you’re unsure about crafting such a crucial document, fear not. This article will guide you through the intricacies of writing a persuasive loan application letter, highlighting the essential elements you should include.

Loan Application Letters

Application Letter for Loan Officer

An Application Letter for a Loan Officer is a formal document submitted by an individual to a bank or financial institution, expressing interest in obtaining a specific loan. This letter outlines the purpose of the loan, provides personal and financial information, and might also detail the applicant's creditworthiness and repayment strategy. Typically, it's used when an individual seeks financial assistance for purposes such as buying a home, funding education, or other significant expenses, and aims to make a strong case for loan approval.

Loan Application Letter to Employer

A Loan Application Letter to Employer is a formal request made by an employee to their employer seeking financial assistance in the form of a loan. Typically used in situations where the employee faces unexpected financial burdens, such as medical emergencies, home repairs, or significant life events, this letter outlines the specific amount requested, the purpose of the loan, and a proposed repayment plan. It serves as an official record of the employee's intent and need while allowing the employer to assess and decide on the request.

Essential Elements of a Loan Application Letter

Crafting a compelling loan application letter involves several guidelines. Here’s a breakdown:

Header and Greeting

Whether you’re applying for a personal or business loan, always begin with a header and greeting. Your header should encompass:

• Business name (if applicable)
• Business address
• Business phone number
• Lender or loan agent’s contact details
• Lender or loan agent’s name and title
• A subject line stating the desired loan amount

Below the header, integrate a friendly greeting to set a positive tone.

Business Loan Request Summary

Offer your lender a snapshot of your loan request. Highlight the desired loan amount, key business information, your trustworthiness as a borrower, and the intended use of the loan. Ensure this section remains concise to guide your lender to the main content effortlessly.

Business Details

Start by clearly stating your loan request and the desired amount. Delve into specifics about your business:

• Legal business name and any DBA
• Business structure (e.g., LLC, Corporation)
• Duration of operation
• Business overview
• Number of employees
• Annual revenue and profit figures (if applicable)

Then, segue into the rationale behind the loan request and your repayment plan.

Lenders prioritize minimizing risks. They’ll keenly assess your repayment ability and the viability of your plans. Clearly define how you’ll utilize the funds and elucidate why this is a prudent financial decision. Showcase the potential benefits and returns from the granted loan.

Proof of Repayment Capability

Use figures from recent financial statements to illustrate your business’s financial standing. These numbers are pivotal in convincing the lender of your repayment capability. If your venture is profitable, spotlight this as a testament to your ability to honor the loan. If there’s existing business debt, provide a comprehensive debt schedule.

Authenticity

Lending carries inherent risks. Always present accurate and truthful information, including your credit history. Misrepresentation or omission of facts can be deemed fraudulent, bearing serious repercussions.

Sample Loan Application

Applicant’s Name

Bank Account Number

Applicant’s Address

City, State, Zip Code

Name of Loan Officer

Name of Financial Institution or Bank

Address of Financial Institution or Bank

RE: Loan Application for $100,000

Dear [Loan Officer’s Name],

I am writing to formally request a loan of $100,000. As a loyal customer for the past 20 years, I have always trusted this institution with my financial needs, both in my personal savings and checking accounts. Additionally, I am proud to have a proven track record with our bank, as evidenced by my previous loan of $10,000 ten years ago. That loan enabled me to establish my business, which I am pleased to say has thrived. Moreover, I ensured timely repayment of both the principal and interest.

The current loan request is aimed at expanding my business operations by constructing new offices in a strategic location within the city. I have already identified the property, and the funds will be allocated to equip the office for seamless business activities. I have attached the detailed loan application along with relevant supporting documents for your perusal.

Should you need any additional information or have questions, please do not hesitate to reach out via email or phone. Furthermore, I am more than willing to schedule a face-to-face meeting to discuss the specifics of this application, including the repayment plan.

Thank you for taking the time to review my request. I eagerly await a positive response and deeply value the ongoing relationship with [Bank Name].

[Applicant’s Signature]

Applicant’s Printed Name

Enclosures: [List of enclosed documents]

Loan Application Letter (Word Template)

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Loan Application Samples and Templates

Securing a loan can be crucial for personal emergencies or to bolster business operations. However, obtaining approval isn’t always straightforward, given lenders’ concerns about potential defaults. This article has equipped you with the knowledge to craft a compelling loan application letter. By following the outlined steps, you enhance the likelihood of swift loan processing and approval.

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How to Write a Letter for a Student Loan

Proper Format for a Thank You Letter for a Scholarship

Asking for money from anyone is often a daunting task, but when it comes to funding your higher education and its hefty price tag, it is a necessary evil. When applying for a private student loan or for additional loan funding from your school, you may need to write a letter to a student loan officer. This letter needs to contain specific information to assist the lender in determining your eligibility and understanding your need. Knowing the specific elements needed in this type of letter will help you gather the funding necessary for your education.

Application for Education Loan in College

Many schools and lenders require you to complete an application that you will submit with your letter of request. Make sure you complete all required materials and submit the packet together to avoid a delayed response. In some instances, you may see a list of specific information you need to include in the request letter. You should use this as a checklist once you complete your request letter to ensure you have included all the required details for the school or lender to process your request.

Student Loan Department Letter Format

Your education loan repayment letter format should have a formal style. This means you should write in a professional and respectful manner. For example, you should not complain or use foul language when discussing your life circumstances. Instead, state your needs and background in a matter-of-fact way without appearing emotional. Set the tone of your letter by using a professional font and use a business letter format. Type the date on the top left side of the page and then move at least two lines down from the date, where you will type the name of the organization and the address. If you have a contact person, you will place his or her name on the line above the organization name. Conduct a web search and review student loan letter samples to get an idea of what your letter should look like.

Write a Clear Introduction

If you have a contact name, begin the letter with a traditional salutation, such as “Dear Mr. Smith.” However, if you do not know who will read your letter, start your letter with “To whom it may concern.” You will start a new paragraph that will be your introduction. In this paragraph, introduce yourself and include your major, academic standing and specific goals you have. Inform the school or lender of the amount of money you are requesting.

Identify and Explain Financial Needs

Once you have introduced yourself and the amount you need, you can explain how you plan to use the student loan. You may need funds for living expenses or perhaps a new computer. Make sure you know any limitations on how you can use your student loan since some lenders will not fund more than tuition, books or supplies needed for a course. Next, you should state the ways the student loan funds will help you reach your goals. This provides a chance for you to give the lender reasons to invest in you and your future.

Write a Conclusion

In a final paragraph, restate the amount you need and thank the school or lender for considering your request. You will then close your letter with “Sincerely,” or another appropriate ending. Include your name and contact information at the end of the letter.

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Kate Beck started writing for online publications in 2005. She worked as a certified ophthalmic technician for 10 years before returning to school to earn a Masters of Fine Arts degree in writing. Beck is currently putting the finishing touches on a novel.

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Free Application for Federal Student Aid (FAFSA)

Use the Free Application for Federal Student Aid (FAFSA) to learn if you are eligible for grants, scholarships, work-study programs, and loans for college or career school.

Begin the FAFSA application

Applying for federal student aid

Completing and submitting the FAFSA is free and gives you access to the largest source of financial aid for school. You must submit your FAFSA application on time to be considered for federal student aid. States and colleges also use FAFSA information to award their own financial aid packages.

FAFSA deadlines

For the school year 2024-25, the federal deadline to submit the FAFSA is June 30, 2025.

Many states use the FAFSA for their financial aid programs. See the state deadlines.

Create a FAFSA account and login

Create an account and get a Federal Student Aid (FSA) ID. You can use your FSA ID right away to sign and submit your first FAFSA form. But to use your FSA ID for anything else, you will have to wait up to three days for your information to be confirmed by the Social Security Administration (SSA).

Log in to the FAFSA if you already have an account.

Fill out the FAFSA

Find out what information you need to fill out the FAFSA. It will be easier to complete the form if you have everything together before you start.

Begin the FAFSA application.

Avoid financial aid scams

You may not need to hire a company to help you find financial aid. Instead, search online for scholarships or ask a school guidance counselor for help. Learn what questions to ask before paying for help finding financial aid.

Eligibility for federal student aid

To be considered for federal student aid, you must meet these basic eligibility requirements , including financial need.

Check your FAFSA application status

After you submit your application, check its status to make sure it has been processed. You can:

• Log in to your account at fafsa.gov , or
• Contact the Federal Student Aid Information Center

If you submit a paper FAFSA form, you can check its status 7–10 days after you mail it. 

You will receive a report with a summary of the information you entered on your FAFSA form. Review it and make any necessary corrections by the due date.

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Your Financial Aid Award Letter: What It Means And How To Read It

Updated: Oct 10, 2022, 6:51pm

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After months perfecting your college admissions essays and submitting your applications, you finally receive your first school acceptance letters. Congratulations, getting into college is a huge achievement and the start of the next chapter of your life.

However, now you have to start thinking about how to pay for your education. Luckily, you probably won’t have to cover the full cost yourself. According to the National Center for Education Statistics, 87% of first-time, full-time undergraduate students were awarded financial aid for the 2019-2020 school year, the last available data.

If you filed the Free Application for Federal Student Aid (FAFSA)  and the school approved your application, you likely received a financial aid award letter along with your acceptance notification. The financial aid award letter contains important information about the cost of attendance and your financial aid options.

However, each school has its own way of presenting its information, so it’s important to understand what’s typically included in a financial aid award letter. Here’s what to look for and what to do if you need more financial assistance.

What Is a Financial Aid Award Letter?

The financial aid award letter, also known as the student aid package or school offer, tells you what financial aid you can get at a particular school. The award letter is specific to that university or college, so you’ll receive a different letter from every school that accepts you as an incoming student.

Decoding Your Financial Aid Award Letter

The letter will include the annual total cost of attendance  and a list of financial aid options. Typically, your financial aid package  will be a mix of gift aid, meaning financial aid that doesn’t have to be repaid, and loans, which you have to repay with interest.

What Your Award Letter Should Include

Your financial aid award letters will look different from school to school, but the U.S. Department of Education created the College Financing Plan  in an effort to encourage schools to make their award letters more streamlined and easily comparable. Most award letters have several elements in common:

• Expected family contribution.  This portion of the award letter is the dollar amount that your family is expected to pay  toward education expenses based on the financial information provided in the FAFSA. The number helps determine how much financial aid you’ll likely need to cover costs.
• Cost of attendance. The estimated cost of attendance may include tuition, fees, room and board, books and supplies, transportation and other expenses for one year of classes. However, this number doesn’t include every expense you’ll encounter as a student.
• Scholarship and grant options.  Most award letters include multiple types of awards. This section of the letter lists awards that do not require repayment and may include merit-based scholarships, need-based grants (institutional, state and Federal Pell), employer paid tuition benefits and other forms of “gift” aid.
• Net costs. Next, the aid letter typically states the net cost of school—or the cost of attendance minus total grants and scholarships. This is the cost per year that must be paid out of pocket or covered by loans or other aid.
• Loan and work options.  The bottom portion of your award letter will list available loan options—including the loan type, amount and interest rate. This section also indicates whether you qualify for federal work-study and, if so, how much you’re eligible to earn each year and how many hours you can work each week.

When Will I Get My Financial Aid Award Letter?

The timing of your financial aid award letter will depend on when you applied and the university’s admissions policies. If you completed the FAFSA, applied in the fall and the school admits students on a rolling basis, you could receive information about financial aid as early as December or January.

However, many schools don’t put together financial aid packages until after their application deadlines in the spring. That means you may not receive a financial aid award letter until May or even June.

How to Apply For Financial Aid

To apply for financial aid , you have to complete the FAFSA. The federal government and universities use the FAFSA to determine your financial aid eligibility.

For the 2023-2024 academic year, FAFSA forms must be submitted by 11:59 p.m. CT on June 30, 2024. However, states and colleges may have deadlines that differ from the federal deadline. Check with the school financial aid administrator to see when you need to submit the FAFSA.

The FAFSA is free to complete, and you can fill out the application online  by following these steps:

1. Collect the necessary documents.  You can make the financial aid application process less frustrating by compiling your federal income tax returns, W-2s and records of other earnings before starting the application. If you’re applying as a dependent , you’ll need to gather financial records for your parents.

2. Log in to the Federal Student Aid website.  To start the application process, log in to the FSA website . If you already have an account, enter your FSA ID and password. If not, create an FSA account using your contact information and Social Security number.

3. Fill out student information.  The first section of the FAFSA form requests your Social Security number and contact information, state residency details, education level and other personal information.

4. Choose where to send your FAFSA.  If you don’t have the Federal School Code, search for your school by state and name or city. You can send your FAFSA to up to 10 schools, so be sure to add all of your possible choices if you haven’t decided on a school yet.

5. Enter your dependency status.  The Dependency Status section of the application requests information about your marital status, household size and other information to determine whether you are considered an independent for financial aid purposes. This also determines the types of financial documents you need to provide.

6. Input financial information.  When prompted, enter information about your tax returns, household income, additional earnings and assets. If you’re applying as a dependent, you’ll complete the Parent Financials section of the form instead.

7. Sign and submit your application.  After completing the application form, agree to the FAFSA certification statement and sign your application. Filing deadlines may be university-specific, so check with your school’s financial aid office to determine important dates.

8. Reapply for aid every school year.  Federal financial aid eligibility depends on your financial need, so you have to resubmit your FAFSA each year.

In general, it will take less than an hour to complete the application, but you can save and access it again for up to 45 days if you need to stop to complete it later. If you have any questions about the FAFSA or federal financial aid in general, visit the Federal Student Aid Help Center .

Types of Financial Aid

When evaluating financial aid packages from schools, it’s important to keep the different types of financial aid in mind.

Whenever possible, you should use as much gift aid as you can before turning to other sources of financial aid. Gift aid doesn’t have to be repaid and comes in the form of grants or scholarships.

• Grants: Grants can be issued by the government, schools and private organizations. Grants are typically based on financial need.
• Scholarships:  Scholarships are awarded by schools and private organizations. Scholarships are usually issued based on merit, such as your academic or athletic performance.

Federal Work-Study

The federal work-study program can be a useful way to pay for a portion of your education expenses and to reduce how much you need to take out in student loans. With work-study, undergraduate and graduate students with financial need get part-time jobs related to their majors. You use the money you earn to cover some of your education costs. The amount you can work is determined by your total federal work-study award.

Not all schools participate in the federal work-study program, and it’s important to know that you’re not guaranteed a job. It’s your responsibility to find a suitable role. The award isn’t guaranteed, and you’ll have to work throughout the semester to earn the money you need.

Federal Student Loans

If you’ve exhausted gift aid and work-study and still need money to pay for school, federal student loans  should be your next consideration. Federal loans tend to have lower interest rates and more flexible repayment terms  than private loans. As an undergraduate student, you have the following loan options:

• Direct subsidized loans. Undergraduate students with financial need can qualify for subsidized loans. With direct subsidized loans , the government covers the interest that accrues while you’re in school, during your grace period and during periods of deferment. As a first-year student, you can borrow up to $3,500 per year.
• Direct unsubsidized loans: Undergraduate students can take out direct unsubsidized loans regardless of financial need. With these loans, you’re responsible for all interest that accrues. First-year dependent students can take out up to $2,000 per year, while independent students can take out up to $6,000 per year.
• Parent PLUS Loans: PLUS loans allow parents of undergraduate students to borrow up to the total cost of attendance, minus other financial aid received.

How to Compare Financial Aid Awards

Because there isn’t a set format for financial aid awards, comparing the different offers can be confusing.

To figure out which school is giving you the best financial aid package, calculate the net price with these simple steps:

• Identify the school’s cost of attendance. Most financial aid letters will list the total cost of attendance. If your letter doesn’t, ask the financial aid office for the number. Make sure it includes all of your expenses, including textbooks, transportation and supplies.
• Subtract gift aid and savings.  Subtract the gift aid you received from the school’s total cost of attendance. If you have any savings set aside for college, such as money saved in a 529 plan , subtract that amount as well.
• Compare net price. The number you get after subtracting gift aid and savings is your net price. That’s how much you’ll have to pay—or borrow in student loans—for college.

In some cases, you may find that a more expensive school gives you more gift aid, reducing your net price. That’s why it’s so important to look at the price after subtracting gift aid so you can see how much you’d have to pay out of your own pocket.

If you’re still confused, take advantage of the Department of Education’s annotated College Financing Plan , which can provide helpful details about each section of the award letter. You can also use third-party tools like Offer Letter Decoder  that let you upload your award letter and then provide clarity around the types of aid you were awarded.

How to File a Financial Aid Appeal Letter

In some cases, there may be special circumstances that may entitle you to additional financial aid. For example, you could qualify for additional aid if:

• Your parents lost their jobs or experienced a loss in income
• You had a major medical expense
• You have unusually high child care costs
• Your home was damaged by a natural disaster

Filing an appeal letter also may be a good option if you need more aid due to COVID-19 . To start the appeals process, contact the school’s financial aid office as soon as possible to determine the correct process and deadline for pursuing an appeal.

When you start drafting the letter of appeal, include important information like why you’re appealing the award and provide details about the circumstances that led to the change in your financial status. If appropriate, you may also include documents that illustrate your situation or otherwise support your appeal. Finally, include a specific request for the amount you need to attend the school as well as any competing offers you received from other schools.

Still Not Enough? Steps to Take if You Need More Aid

Unfortunately, your school’s financial aid package may not be enough to cover all of your education expenses.

Cut Your College Costs

If the total cost of attendance is too high even with financial aid, look for ways to reduce your college expenses. For example, you could live off-campus instead of in the dorms or attend a public university rather than a private school. If possible, staying home and commuting to school can significantly lower your education costs.

Look for Additional Scholarships

If you need more aid to pay for school, you may qualify for outside scholarships offered by nonprofit organizations or private companies. You can search for potential opportunities on FastWeb Scholarships.com  and Niche .

Consider Private Student Loans

Finally, private student loans  can be a useful tool to fill the gap. However, they usually have higher interest rates and stricter repayment terms than federal loans, so make sure you review the terms carefully.

Private student loans are issued by banks and lenders rather than the government. They review your application and decide whether to issue you a loan based on your income and credit. As a college student, you’ll likely need a co-signer—a parent or relative with steady income with good credit—to qualify for a loan.

Not sure where to start? Check out the best private student loan lenders .

Forbes Advisor Loans Writer Kiah Treece contributed to this article.

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For the past seven years, Kat has been helping people make the best financial decisions for their unique situations, whether they're looking for the right insurance policies or trying to pay down debt. Kat has expertise in insurance and student loans, and she holds certifications in student loan and financial education counseling.

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Student loan forgiveness approval letters are going out. Here's what they mean.

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Edited By Anne Marie Lee , Alain Sherter

November 23, 2022 / 10:38 AM EST / MoneyWatch

About 16 million borrowers who had applied for the Biden administration's student loan forgiveness program received letters starting last weekend letting them know that they've been approved for debt relief. 

However, the letter states that a number of lawsuits "have blocked our ability to discharge your debt at present." The approvals come after two courts  blocked  the plan, placing legal barriers before a federal program that had promised to forgive up to $20,000 in student debt for about 40 million eligible Americans. 

"Your application is complete and approved, and we will discharge your approved debt if and when we prevail in court," Secretary of Education Miguel Cardona said in the letter. 

About 26 million people had applied for the loan relief effort prior to the court rulings, which have effectively stopped the Biden administration's ability to accept new applications. The Biden administration is appealing those decisions, but it's unclear whether the cases will be decided. 

On Tuesday, the Biden administration said it is extending the pause on student debt repayments. That freeze had been slated to expire on December 31, which meant borrowers would have started repayments in January. With the latest extension, the pause will now be pushed back until no later than June 30, 2023. 

"I'm confident that our student debt relief plan is legal. But it's on hold because Republican officials want to block it," President Biden wrote on Twitter. "That's why [Education Secretary Miguel Cardona] is extending the payment pause to no later than June 30, 2023, giving the Supreme Court time to hear the case in its current term."

The letter from the Education Department said it will update applicants "when there are new developments."

Loan payments

The letters are helping "folks understand a bit better why they haven't had their debts forgiven yet," noted Mike Pierce, executive director of the advocacy group Student Borrower Protection Center. "That doesn't completely do away with the very real economic anxiety that people with student loans feel at this moment."

The irony of getting approval for loan forgiveness while also being told that the plan might not move forward due to legal challenges wasn't lost on recipients, who took to social media to comment on the mixed messages. 

"Getting the student loan forgiveness approval letter, but saying we really can't forgive your loans at this time is peak 2022," one person wrote on Twitter. 

Getting the student loan forgiveness approval letter, but saying we really can’t forgive your loans at this time is peak 2022 😏 #ExtendThePause #CancelStudentDebt pic.twitter.com/yKdY4xORIn — Skye Devonshire (@skyedevonshire) November 21, 2022

What is getting approved for relief? 

The Department of Education sent the letter to 16 million people who applied to have up to $20,000 in student debt forgiven, telling them they received a green light — at least from the Biden administration. The letters don't inform the borrowers how much of their loans had been erased, however. 

But because of the court rulings, debt forgiveness can't move forward unless the Biden administration is victorious with its legal challenges. The Education Department will "quickly process their relief once we prevail in court," White House Press Secretary Karine Jean-Pierre has said. 

I applied for forgiveness but haven't gotten a letter. Why? 

The Biden administration had approved 16 million applications prior to the court rulings, and those people are receiving alerts about that now. Some of those applicants may not have received the emails in the initial alert, but could receive an alert in their inbox soon, according to a November 19 tweet from Cardona.

"Beginning today, applicants and others seeking relief through the Biden-Harris Administration's Student Debt Relief Plan will begin receiving updates. Don't worry if you don't get an email today — more are coming," Cardona said in a tweet.

But the other 10 million people who applied but hadn't been approved prior to the court rulings may be in for a longer wait. "The Biden administration is in a tough spot right now — they aren't allowed to approve applications until something changes in the court," Pierce noted.

And the roughly 14 million eligible borrowers who have yet to apply are no longer able to do so via the Education Department's online application, which has been shut down in response to the court rulings. 

When could I see debt relief? 

It's unclear because that depends on the timing of the Biden administration's appeals, Pierce noted. 

Advocacy groups for student debt relief on Tuesday applauded the White House's decision to extend the repayment pause until June 2023, which will give eligible borrowers financial breathing room over the next few months as the legal challenges move forward.  

"This extension means that struggling borrowers will be able to keep food on their tables during the holiday season — and the coming months — as the Administration does everything it can to beat back the baseless and backward attacks on working families with student debt," Pierce said in a Tuesday statement.

• Student Debt

Aimee Picchi is the associate managing editor for CBS MoneyWatch, where she covers business and personal finance. She previously worked at Bloomberg News and has written for national news outlets including USA Today and Consumer Reports.

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FAFSA applications are open. Here's how to fill it out this year

Elissa Nadworny

Lauren Migaki

Leer en español.

Welcome to FAFSA season.

The Free Application For Federal Student Aid opens on Oct. 1 — and if you're planning on going to college next year, or even just toying with the idea of taking classes, you should fill it out.

Yes, it's a government form, but it's free, and it's the first step in getting financial aid that could be the key to going to college. The COVID-19 pandemic saw fewer students filling out this key form — which means families are leaving money on the table and limiting their options when it comes to paying for college. Remember, colleges want you to come to their schools, and this form could be the first step in getting there. And this year, there are some changes that allow even more students to be eligible for aid.

Here's how to fill out the FAFSA and why you shouldn't wait to do it.

FAFSA Help: Quick Links

Here's where to apply for the FAFSA.

Here's where to get your FSA ID.

Wyatt, a free chatbot, will help guide you through the FAFSA.

If you need to appeal a financial aid offer, Swift Student can help you draft a letter to the college you want to attend.

How it works

The FAFSA will prompt you to list up to 10 schools that you're interested in attending, and the federal government will send your information to these schools. You'll hear back directly from them — not from the government — about how much financial aid you'll get. This will include grants, scholarships (which you don't have to pay back!) and loans.

Lots of schools determine financial aid on a rolling basis, so you could hear back in a few weeks — and some more selective schools won't let students know their financial aid package until their admission results come back in the spring.

Picking A College For The Fall? Here's How To Decide For An Unknown Future

Where to start.

Before you start the FAFSA, you'll need to make a Federal Student Aid ID — a username and password that serve as your online signature when you're filling out aid forms through the federal government. Create an FSA ID here.

You'll need to be prepared with a few things as you sit down to start the application. Have your social security number (or permanent resident card) handy.

It's also helpful to have 2020 federal tax returns for you and your parents. The FAFSA starts by asking demographic questions about you, your family and your high school — and then moves on to financial questions to get a sense of how much money you might need to pay for college. It relies on last year's tax data for much of this information. The form automatically pulls that information from the IRS, but it's helpful if you can have the taxes accessible while you're filling it out just in case.

"It seems intimidating, but it's really not that bad," says Dominique Gunn, a college advisor in Columbus, Ohio. "All we're doing is plugging and chugging. Just plugging in information and moving on to the next page."

Got it all? Now go to this website to fill out the FAFSA.

College Is Important. So Is Mental Health. Here's How To Study Without Burning Out

Deadlines to remember.

The FAFSA opens up on Oct. 1, and it will close on June 30, 2023. That's a big window to apply for financial aid for the 2022-2023 school year — but if you already know you're thinking about college next fall, you should go ahead and fill out the application now. "Many states and a lot of institutional funds are first come, first serve," says Sara Urquidez , who runs a non-profit that guides students in Dallas and Houston through the college process. "[The] earlier you get in line, the more money you could potentially receive from a particular institution."

Applying earlier could make a big difference in the funds that you get — and you'll want to know how much financial aid you'll receive before you make a decision about where to go.

Congratulations, You're In College! Now What?

What if my financial situation has changed since my 2020 taxes.

The FAFSA always relies on the taxes from the previous year — that's just how the federal form works. This year, that gives an unrealistic picture of lots of families' finances, because families are still navigating job loss and declining income due to the Delta variant. If you're in this situation, you're not alone and colleges know that.

Fill out the FAFSA — but then reach out to the colleges you're considering. "Let them know, ' Hey, something's happened. Our finances are just a little bit different now. What can we do to let you know so you can take a second look? '" recommends Karla Weber, who works in the financial aid office at the University of Wisconsin, Madison.

Colleges know these calls are coming and are ready to adjust financial aid offers.

Thinking About Returning To College? A Guide For Taking The Leap

Where to go for help.

If you've got questions while you're filling out the form, you can save it and come back to it later. Reach out to your school counselor or even your teachers for help. They're the people who know you best.

Financial aid offices at the colleges you're interested in attending can also help you. "The financial aid office is your friend in this process. I think sometimes we get made out to be the ones that are hiding or hoarding this money from students, where it's really just the opposite," says Karla Weber at the University of Wisconsin, Madison. It's their job to get you the money you need.

Once those results come in

Your offer letters from individual schools will spell out the financial aid you receive — but you don't have to take it. You can always turn the funds down if you choose a different school, or if one school simply isn't offering you enough money to attend.

If you need more aid to attend the school you're most interested in, you should reach out to the financial aid office and let them know. Nothing is final in this process, and they may be able to provide more money for you — or even suggest scholarships you can apply for to make it work. You'll never get that extra cash unless you ask.

The podcast and digital versions of this story were produced by Clare Lombardo.

We'd love to hear from you. Leave us a voicemail at 202-216-9823 with a greeting, your name, your phone number and a random life tip. Or send us an email at [email protected] . It might appear in an upcoming episode.

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Correction Oct. 22, 2020

This article originally listed the deadline for the FAFSA as June 30, 2021. For the school year 2021-2022, the deadline is June 30, 2022.

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Sample Letters

Writing a Student Loan Hardship Letter That Works

Over the years, I’ve crafted numerous hardship letters for various scenarios, and now I want to share my insights on creating a compelling student loan hardship letter. This type of letter is your chance to explain your financial situation to your lender and seek relief. Below, I’ve outlined essential tips and included three customizable templates based on real-life successes.

Key Takeaways

• Understand Your Audience: Know the lender’s requirements and tailor your letter accordingly.
• Be Clear and Concise: Directly state your hardship and the specific relief you’re seeking.
• Provide Evidence: Back up your claims with tangible proof of your financial situation.
• Personalize Your Letter: Use one of the provided templates to ensure your letter feels personal and sincere.
• Follow Up: Always follow up after sending your hardship letter to keep the lines of communication open.

What is a Student Loan Hardship Letter?

A student loan hardship letter is a document written to your lender explaining why you are unable to meet your loan payments. It details your financial struggles and requests specific relief, such as a deferment, forbearance, or a payment reduction. The goal is to provide a clear, honest, and detailed account of your circumstances to persuade the lender to accommodate your situation.

Personal Tips from Experience

• Start with a Clear Subject Line: Always include a straightforward subject line such as “Request for Student Loan Relief due to Financial Hardship.”
• Address the Letter Properly: Use the lender’s name and address at the top. If possible, address it directly to the person in charge of loan adjustments.
• Be Honest and Direct: Clearly explain your situation without exaggeration. Honesty fosters trust and increases your chances of a favorable response.

Real-Life Example

In one of my most challenging cases, I helped a client whose medical expenses had drastically changed their financial landscape. The letter not only detailed the situation but also included all relevant medical bills and a detailed budget breakdown. The lender responded positively, granting a forbearance period.

Key Elements to Include in Your Letter

• Introduction: Briefly introduce yourself and state the purpose of your letter.
• Detailed Explanation: Describe your financial hardship in detail. Include how and why you’ve ended up in this situation.
• Specific Request: Clearly state what type of assistance you are seeking.
• Documentation: Mention any documents you are enclosing that support your claim.
• Conclusion: Reiterate your request and express gratitude for the lender’s consideration.
• Contact Information: Provide your contact details for follow-up.

Three Unique Templates

Template 1: medical hardship.

Subject: Request for Deferment due to Medical Hardship

Dear [Lender’s Name],

I am writing to request a deferment of my student loan payments due to an ongoing medical condition that has significantly affected my financial stability. Recently, I have incurred substantial medical bills after an unexpected surgery, which has made it difficult for me to meet my monthly student loan obligation.

Attached are copies of my medical bills and a detailed account of my monthly expenses. I am hopeful that you can provide a temporary deferment until I am able to return to work and regain financial stability.

Thank you for considering my request. I look forward to your compassionate response.

Sincerely, [Your Name]

Template 2: Job Loss

Subject: Request for Loan Forbearance due to Job Loss

I am reaching out to request forbearance on my student loans due to recent unemployment. I lost my job due to company downsizing and am currently in the process of seeking new employment. Unfortunately, this has affected my ability to keep up with my student loan payments.

I have attached my unemployment documentation and a current budget outline. I request a six-month forbearance to allow me time to secure new employment and restore my financial health.

Thank you for your understanding and consideration.

Best regards, [Your Name]

Template 3: Reduction in Income

Subject: Application for Payment Reduction due to Decreased Income

I am experiencing financial hardship due to a significant reduction in income and hereby request a reduction in my monthly student loan payments. Over the past few months, my salary has been reduced by 30%, which has directly impacted my ability to fulfill my financial commitments, including my student loan repayments.

Enclosed are my recent pay stubs and a revised budget, highlighting my current financial situation. I am hopeful for a reduced payment plan that reflects my decreased income and allows me to continue making payments without defaulting.

I appreciate your attention to this matter and look forward to your supportive response.

Yours sincerely, [Your Name]

Final Thoughts

Writing a compelling student loan hardship letter can significantly impact your financial well-being. By following the advice and templates provided, you’re better equipped to communicate effectively with your lender and seek the necessary relief. Remember, clarity, honesty, and persistence are your best tools in this process.

Frequently Asked Questions (FAQs)

Q: what should i include in a student loan hardship letter.

Answer : In my experience, a student loan hardship letter should include details about your current financial situation, reasons for the hardship, and any supporting documentation. Additionally, explaining how your situation is temporary and your plan to get back on track can make your case stronger.

Q: How do I explain my financial situation in a student loan hardship letter?

Answer : When I wrote my hardship letter, I clearly outlined my income, expenses, and any significant changes that impacted my ability to pay. Providing a budget breakdown helped illustrate my financial struggles convincingly.

Q: What tone should I use in a student loan hardship letter?

Answer : I found that using a respectful and honest tone was most effective. Being sincere about my struggles while maintaining a positive outlook on resolving them showed my commitment to repaying the loan once my situation improved.

Q: How long should a student loan hardship letter be?

Answer : From my experience, keeping the letter concise and to the point, about one to two pages, worked best. This length allowed me to cover all necessary details without overwhelming the reader.

Q: Can I request a specific type of assistance in a student loan hardship letter?

Answer : Yes, in my letter, I specifically requested a temporary reduction in payments or a deferment period. Being clear about the type of assistance needed can help the lender understand how to assist you effectively.

Q: How soon should I expect a response after sending a student loan hardship letter?

Answer : In my case, I received a response within a few weeks. It’s important to follow up if you haven’t heard back within a reasonable time frame to ensure your request is being processed.

Q: Do I need to include documentation with my student loan hardship letter?

Answer : Including documentation was crucial for me. I attached copies of my pay stubs, medical bills, and any other relevant documents to provide evidence of my financial hardship.

Q: Should I mention other debts in my student loan hardship letter?

Answer : I mentioned my other debts to give a complete picture of my financial situation. This helped the lender understand the full scope of my financial obligations and why I needed assistance with my student loan.

Q: Is it necessary to mention my employment status in a student loan hardship letter?

Answer : Yes, I included details about my employment status, including recent job loss or reduced hours, as it significantly impacted my ability to make payments. This information was essential in demonstrating my need for relief.

Q: How can I demonstrate that my hardship is temporary in a student loan hardship letter?

Answer : I outlined my plan for improving my financial situation, such as job hunting or expected medical recovery, to show that my hardship was temporary. Providing a clear path to financial stability reassured my lender of my commitment to repay the loan.

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How to Read a Financial Aid Award Letter

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More on navigating student aid:

Find a loan: Apply for student loans

Select a loan: Pick the right student loan

Not enough aid: Get more financial aid

Free money: Find college grants and scholarships

Financial aid award letters will arrive soon after you receive your college acceptances. You need to decide which school gives you the best award package, but comparing offers can be a challenge. Every letter includes different language, formatting and content.

Top Private Student Loan Lenders

Best private student loan overall.

3.69-17.99% College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC.. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply. As certified by your school and less any other financial aid you might receive. Minimum $1,000. Rates shown include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation. This informational repayment example uses typical loan terms for a freshman borrower who selects the Flat Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.78% fixed Annual Percentage Rate (“APR”): 54 monthly payments of $25 while in school, followed by 96 monthly payments of $176.21 while in the repayment period, for a total amount of payments of $18,266.38. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. Information advertised valid as of 9/3/2024. Variable interest rates may increase after consummation. Approved interest rate will depend on the creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.

Variable APR

5.59-17.99% College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC.. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply. As certified by your school and less any other financial aid you might receive. Minimum $1,000. Rates shown include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation. This informational repayment example uses typical loan terms for a freshman borrower who selects the Flat Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.78% fixed Annual Percentage Rate (“APR”): 54 monthly payments of $25 while in school, followed by 96 monthly payments of $176.21 while in the repayment period, for a total amount of payments of $18,266.38. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary. Information advertised valid as of 9/3/2024. Variable interest rates may increase after consummation. Approved interest rate will depend on the creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.

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3.69-15.49% Lowest rates shown include the auto debit. Advertised APRs for undergraduate students assume a $10,000 loan to a student who attends school for 4 years and has no prior Sallie Mae-serviced loans. Interest rates for variable rate loans may increase or decrease over the life of the loan based on changes to the 30-day Average Secured Overnight Financing Rate (SOFR) rounded up to the nearest one-eighth of one percent. Advertised variable rates are the starting range of rates and may vary outside of that range over the life of the loan. Interest is charged starting when funds are sent to the school. With the Fixed and Deferred Repayment Options, the interest rate is higher than with the Interest Repayment Option and Unpaid Interest is added to the loan’s Current Principal at the end of the grace/separation period. To receive a 0.25 percentage point interest rate discount, the borrower or cosigner must enroll in auto debit through Sallie Mae. The discount applies only during active repayment for as long as the Current Amount Due or Designated Amount is successfully withdrawn from the authorized bank account each month. It may be suspended during forbearance or deferment. Advertised APRs are valid as of 8/19/2024. Loan amounts: For applications submitted directly to Sallie Mae, loan amount cannot exceed the cost of attendance less financial aid received, as certified by the school. Applications submitted to Sallie Mae through a partner website will be subject to a lower maximum loan request amount. Miscellaneous personal expenses (such as a laptop) may be included in the cost of attendance for students enrolled at least half-time. Examples of typical costs for a $10,000 Smart Option Student Loan with the most common fixed rate, fixed repayment option, 6-month separation period, and two disbursements: For a borrower with no prior loans and a 4-year in-school period, it works out to a 10.28% fixed APR, 51 payments of $25.00, 119 payments of $182.67 and one payment of $121.71, for a Total Loan Cost of $23,134.44. For a borrower with $20,000 in prior loans and a 2-year in-school period, it works out to a 10.78% fixed APR, 27 payments of $25.00, 179 payments of $132.53 and one payment of $40.35 for a total loan cost of $24,438.22. Loans that are subject to a $50 minimum principal and interest payment amount may receive a loan term that is less than 10 years. A variable APR may increase over the life of the loan. A fixed APR will not.

5.37-15.70% Lowest rates shown include the auto debit. Advertised APRs for undergraduate students assume a $10,000 loan to a student who attends school for 4 years and has no prior Sallie Mae-serviced loans. Interest rates for variable rate loans may increase or decrease over the life of the loan based on changes to the 30-day Average Secured Overnight Financing Rate (SOFR) rounded up to the nearest one-eighth of one percent. Advertised variable rates are the starting range of rates and may vary outside of that range over the life of the loan. Interest is charged starting when funds are sent to the school. With the Fixed and Deferred Repayment Options, the interest rate is higher than with the Interest Repayment Option and Unpaid Interest is added to the loan’s Current Principal at the end of the grace/separation period. To receive a 0.25 percentage point interest rate discount, the borrower or cosigner must enroll in auto debit through Sallie Mae. The discount applies only during active repayment for as long as the Current Amount Due or Designated Amount is successfully withdrawn from the authorized bank account each month. It may be suspended during forbearance or deferment. Advertised APRs are valid as of 8/19/2024. Loan amounts: For applications submitted directly to Sallie Mae, loan amount cannot exceed the cost of attendance less financial aid received, as certified by the school. Applications submitted to Sallie Mae through a partner website will be subject to a lower maximum loan request amount. Miscellaneous personal expenses (such as a laptop) may be included in the cost of attendance for students enrolled at least half-time. Examples of typical costs for a $10,000 Smart Option Student Loan with the most common fixed rate, fixed repayment option, 6-month separation period, and two disbursements: For a borrower with no prior loans and a 4-year in-school period, it works out to a 10.28% fixed APR, 51 payments of $25.00, 119 payments of $182.67 and one payment of $121.71, for a Total Loan Cost of $23,134.44. For a borrower with $20,000 in prior loans and a 2-year in-school period, it works out to a 10.78% fixed APR, 27 payments of $25.00, 179 payments of $132.53 and one payment of $40.35 for a total loan cost of $24,438.22. Loans that are subject to a $50 minimum principal and interest payment amount may receive a loan term that is less than 10 years. A variable APR may increase over the life of the loan. A fixed APR will not.

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» MORE: How to apply for student loans

A 2018 analysis of over 500 financial aid award letters by New America, a nonpartisan think tank, found numerous inconsistencies in jargon among the letters. And, more than one-third didn’t include any cost information alongside financial aid amounts.

To understand what each financial aid award letter says, you’ll need to cut through the clutter so you can make the best financial decision.

What your award letter should include

No two financial aid award letters will look alike, but they should have:

A list of the financial aid types and amounts awarded

Your awarded aid could include federal, state and institutional grants, as well as federal work-study and scholarships. The list will also include the amount of subsidized and unsubsidized federal loans you can borrow and, often, a PLUS loan your parent or guardian can borrow for your education.

» MORE: What is EFC?

Your cost of attendance

The cost of attendance includes tuition, fees, and room and board for your first year. But it’s not complete. It doesn’t factor in everything you’ll pay for, or how many years you’ll attend.

Now that you know what to look for, here’s how you can use this information.

Determine the true cost of college

Only 40% of the sample letters analyzed by New America included a calculation of what students would need to pay. To figure out the cost of college yourself, here’s what to do:

Find the net price

The net price is calculated as the cost of attendance, including additional expenses, minus grants and scholarships. You can use a net price calculator , available on every college’s website. The net price includes estimated additional costs like books and supplies, personal expenses and transportation.

Think beyond year one

Net price factors in the cost of only one year in school. It also doesn’t take into consideration tuition increases, which are likely, based on data from the National Center for Education Statistics. Multiply the net price by four to get the total minimum cost you can expect. As tuition increases each year, your costs will go up, but your financial aid might not.

» MORE: Are student loans worth it?

Understand aid types

In a financial aid award letter, the way aid award money is labeled doesn’t clarify much. For example, work-study and loans may be referred to as “self-help aid,” while scholarships and grants may be listed as “gift aid.” In the New America study, among 455 colleges that offer unsubsidized loans, there were 136 unique terms for that loan, and 24 of those terms didn’t even include the word "loan."

Here’s how to tell the difference among aid types in your award letter:

Grants and scholarships: Awards that do not have to be repaid. These can come from the federal government, your school or your state’s grant agency. They may be need- or merit-based.

Work-study: Money you can earn, typically at an hourly rate, that’s funded by the government. It isn’t guaranteed: You have to find a qualifying work-study job that fits with your academic schedule, and the amount on your award letter is the maximum you can earn.

Loans: Borrowed money you must pay back with interest. You borrow federal direct loans from the government. These loans often have lower interest rates and more borrower protections than private student loans. And, no credit check or co-signer is required.

» MORE: What is the maximum student loan amount you're eligible for?

How to compare financial aid award letters

Once you grasp the cost and your financial aid options, you can more easily compare offers side by side to see which school will be the most affordable. This table shows you how you can compare costs and financial aid awards from two schools.

If you didn’t get as much aid as you hoped from a school, you can write a financial aid appeal letter or consider a less expensive school.

Remember, you don’t have to take all offered financial aid, but make sure to accept all free aid before borrowing money.

On a similar note...

How to read your financial aid award letter

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To receive financial aid, you must first fill out the Free Application for Federal Student Aid or FAFSA . When you submit the form, you’ll list colleges that you’re interested in, and colleges will use the information on your FAFSA to create your award package — though you’ll receive award letters only from the schools that accept your application. Your financial aid award letter is typically sent out along with your college acceptance.

Financial aid award letters notify you of funding that a college is willing to provide you. The details in these notifications cover scholarships, school grants, work-study and student loans. Financial aid letters may also describe the total cost of attendance for the year at the school sending the letter, including tuition, fees and room and board.

Financial aid award letters can be used to determine whether a school is right for you. Each school uses a different format for its award notifications, but there are typically a few similarities that you’ll come across. Here’s how to make sense of your aid award packages and compare them between schools.

Here are some key terms to look out for when reviewing your financial aid award letter:

• Expected family contribution (EFC): Your EFC estimates your family’s financial resources based on income, family size, assets and more. The U.S. Department of Education will calculate your EFC using your FAFSA and will use that number to determine how much need-based aid you’re eligible for.
• Estimated cost of attendance (COA): The estimated COA is what the university estimates that you’ll spend over one academic year in tuition, fees, room and board, books and supplies. This may be listed as your “direct cost.”
• Gift aid: Gift aid is financial aid you won’t be responsible for paying back. This includes grants and scholarships. Work-study programs are sometimes included, but they’re often also called self-help aid because they require you to work.
• Student loans: Student loans are financial aid you’re responsible for paying back in a certain amount of time. Your letter will list the maximum amount you can borrow and what your interest rate will be if you do.
• Outstanding balance: The remaining balance is the cost per academic year after all of the financial aid is accounted for. This may be listed as your “net cost.”

How financial need is determined

Your financial need is determined by subtracting your EFC from the total COA of the school, which schools are required by law to disclose. After the Department of Education determines your EFC, the school will use that to calculate your level of financial need.

Your financial need will differ at each school since schools have different COAs. Let’s say your expected family contribution is $30,000. If School A has a COA of $40,000 and School B has a COA of $55,000, your financial need would look like this:

• School A: $40,000 (COA) – $30,000 (EFC) = $10,000 (financial need)
• School B: $55,000 (COA) – $30,000 (EFC) = $25,000 (financial need)

Even if you have more financial need at one school, you won’t necessarily be offered enough financial aid to cover that amount. Available need-based aid varies by school, so you could be offered a certain amount at one school and a different amount at another.

How to compare financial aid packages

Every school calculates your financial aid differently. Here’s what you need to look at to get an idea of what each package is offering.

Loan details

If you’re planning on taking out student loans, look at how much you’re able to borrow and what the long-term cost will be. Your award letter will tell you the maximum amount you can borrow for the academic year, the interest rate and upfront loan fee, the grace period, the repayment terms and more.

You’ll also be able to see whether you qualify for subsidized loans, which is where the federal government pays your interest while you’re in school and during your six-month grace period after graduation and future deferment periods.

Gift aid details

If you’re eligible for scholarships and grants, you’ll want to know how long these gifts will last. You’ll also need to know if they renew automatically each year or if you’ll need to reapply, and whether you need to meet any responsibilities to keep the gift aid.

Knowing which school offers the largest amount of gift aid is particularly important because you generally don’t have to repay scholarships and grants. When you look at your remaining balance after all financial aid has been disbursed, which one has the lowest balance, and can you afford to pay that balance annually over four years?

Work-study availability

Eligibility for work-study programs doesn’t necessarily mean you’re guaranteed to find a job on campus. But if it’s in your award letter, you’ll want to know how many hours you’ll need to work every week and what you’ll earn.

Consider these numbers alongside your list of courses and determine whether working that much is feasible.

How to accept a financial aid award

Once you’ve carefully compared all of the details and have decided which school you’re going to attend, you need to accept your aid offer. The details for how to accept your package, as well as acceptance deadlines, will typically be on the letter.

If there isn’t a deadline or instructions listed, call your school’s financial aid office as soon as possible for more information and guidance.

You don’t have to accept all of the aid listed. While there’s no downside to accepting scholarships or grants, think carefully before accepting student loans or committing to work-study. Private organizations also offer scholarships and grants , and applying to those can further reduce costs.

If you do choose to take out student loans , remember that you can request a lower amount than what’s listed on your financial aid award letter — it’s best to borrow the minimum amount that you truly need.

The bottom line

Financial aid award letters are a key part of your college review process, providing information about how much support a school may be willing to provide and what the total cost of attendance will be. Understanding how to read these letters and the terminology used in them is important to be able to accurately compare award offers from different schools.

Once you’ve settled on the school you want to attend, you’ll need to accept the aid offer if you want to receive it. But remember, you don’t have to accept all the financial support outlined in the award letter.

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How to Write a Student Loan Goodwill Letter to Save Your Credit: Sample Included

Late or missing student loan payments can cause your credit score to tank. Read on for a sample letter to remove a student loan from your credit report.

Sarah Li Cain

Nov 11, 2021

Not making on-time payments on your student loans will negatively impact your credit score . On the upside, you may be able to rescue your damaged credit score by writing a student loan goodwill letter. 

It’s not a guarantee, but sending one might be worth the effort. The worst thing that could happen is that your loan servicer could deny your request. But you could get lucky, and the lender could ask the credit bureaus to take your late payments off your credit history. 

Let’s g over what you need to know, including a sample letter you can use to remove a late student loan payment from your credit report. 

What Is a Student Loan Goodwill Letter?

A goodwill letter is a letter you send to your loan servicer to request that, in an act of goodwill, it remove any late or missed student loan payments from your credit report. Since late payments are a major red flag, your credit score could tank if  you don’t make on-time payments . 

One possible consequence of having a low credit score is being denied a loan. And even if you do qualify for a car loan, mortgage or personal loan, you could be charged high fees and interest rates. 

Writing a goodwill letter is your best bet if you were the one who caused the late or missed payment and you want to explain why it happened. If a reported late payment was because of your loan servicer’s mistake, then you’ll need to dispute it with the credit bureau directly.

If you can successfully convince your lender you’re still a reliable borrower, you may have these negative remarks on your credit report removed. If so, your credit score could see a sharp improvement reasonably quickly. 

Will My Goodwill Letter Work?

No matter how well written your goodwill letter is, there is no guarantee that the lender will agree to your request. The decision is totally up to the lender, which may not accept or care about the circumstances that resulted in your missed or late payment. 

But you may get a sympathetic reader who understands why you made a late student loan payment, especially if it was due to an illness, a sudden job loss or other unexpected circumstances. 

If you explain what happened in a polite and appreciative tone, your lender might be receptive to your request.

When you write your letter, carefully explain what happened that got you into a financial pickle — aka what resulted in your late or missed payment. Admit your mistake and conclude by assuring the loan servicer that it won’t happen again and that missing a payment is rare for you. 

Sample Letter to Remove Student Loan From Credit Report

Each borrower’s goodwill letter will be unique, but this sample can give you a good start for how to structure yours. Remember: You should write your letter with a friendly and appreciative tone while being clear in your request. All letters should include the loan account number, the borrower’s contact information, and details about the late or missed payment. 

Dear [loan servicer name], 

My name is [your name], and my student loan account number is [your account number]. I discovered there was a late payment reported on Jan. 1, 2021, on my credit report. I understand that my actions resulted in this late payment.

I want to let you know that I am willing to do everything I can to pay back my student loans in full and on time. Sadly, I recently underwent major surgery and have been negotiating with my health insurance company for months about my five-figure medical bill. Due to this unexpected expense, my budget was stretched too thin. I also had to take unpaid time off work and could not keep up with payments.

I assure you that missing payments is rare for me. You can check my payment history to see that I’ve always made on-time payments (and sometimes more than the minimum amount) other than this one time. Once I went back to work, I was able to balance my budget and resumed making my loan payments on time. 

I am concerned that my low credit score may result in me having to pay a higher interest rate for a home equity loan I plan to take out. I don’t feel as though my credit report reflects the kind of responsible borrower I truly am.

I request that you remove the late payment as a goodwill gesture. I appreciate and thank you for your consideration and hope that my request will be granted. 

How long does it take to get a response to a goodwill letter?

It may take a few weeks to get a response from your lender. You can follow up by calling your lender if you haven’t heard anything after a few weeks. 

If Your Request Is Denied

There’s a chance your lender won’t approve your request. If your credit score is negatively affected, you’ll have to take steps to rebuild your credit. The best way to do so is to keep making on-time payments, to be careful about closing old accounts, and to avoid maxing out your credit cards, among other steps.

If you’re still struggling with making your student loan payments, contact your lender to see what can be done, such as adjusting your monthly payments or exploring your options for loan deferment or forbearance. You may be able to reach an agreement and prevent further damage to your credit. 

Also consider  refinancing through an organization such as Juno , which could help you save tens of thousands of dollars throughout the life of your loan. Juno negotiates with partner lenders on behalf of borrowers to help each student qualify for the best refinance rates they can given their financial situation.

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Sarah Li Cain is a finance writer and a candidate for the Accredited Financial Counselor designation whose work has appeared in places like Bankrate, Business Insider, Financial Planning Association, Investopedia, Kiplinger, and Redbook. She’s the host of Beyond The Dollar, where she and her guests have deep and honest conversations about money affects their well-being.

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5 steps to make a loan letter, 1. free loan guarantee letter, 2. free loan request letter template, 3. free loan sanction letter, 4. bank loan application letter template, 5. personal loan letter format, 6. request for loan letter template, 7. education loan letter format, 8. student loan letter template, 9. bank loan application letter example, 10. sample loan application letter template, 11. student loan letter format, 12. loan application letter template, 13. loan letter example, 14. sample student loan letter, 13+ loan letter templates.

A loan letter is a letter issued by a bank or any other financial institution to a borrower or an applicant who has applied for the loan. The loan letters are very necessary these days. Because you need to apply for the loan in a particular procedure. But do you keep on writing the loan letter every time you need one? If yes, you need not do that from now. Because we have the letter templates designed for you, to make you design the loan letter in minutes. With the templates, you can very easily make the letters.

Step 1: The Subject

Step 2: the language, step 3: know the procedure, step 4: the reason, step 5: check.

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How To Write a Student Loan Settlement Letter Sample

We’ve all heard the disturbing statistics that indicate student loan debt has reached unfathomable levels. As of September of 2022, U.S. adults collectively owed over $1.6 trillion . What you may not know, though, is that this incredible debt load has doubled over the past 20 years.

This rise is due, in large part, to the increasing costs of going to college. What’s more, the return on student loan investments has declined significantly as the increase in wealth achieved by earning a degree has declined over the past 50 years. With that in mind, more Americans are seeking out student loan forgiveness or student loan debt settlement options to help them pay off their loans.

If you’re currently going about doing the same, then you’ll want to learn how to write a student loan settlement letter to your loan providers. Below, we’ll go over everything you need to know to accomplish your goal.

Student Loan Settlement Letter: An Overview

Before you even start to think about how to reconcile your student loan debt, you likely have some questions. For instance, can you settle student loans in good standing? Can you even negotiate with your lender about your debt?

In short, the answer is ‘yes’. You can negotiate with your lender, and your lender has an incentive to work with you rather than receiving nothing from you if you abandon the loan altogether. One way of pleading your case with your lender is to write a student loan settlement letter to inform your lender about your situation and ability to pay moving forward.

Begin your letter with your name and contact information in the upper left-hand corner. Then, address the name of your lender to start out your letter. For example, start your letter with Dear [LOAN PROVIDER’S NAME] Representative,”. In the first paragraph of your letter, outline the details of your loan. Detail the amount of money you owe, how many years you’ve had the debt, and possibly even an itemized list of your loans.

Start by Discussing Your Financially Troubling Situation

In the following paragraph, you’ll want to outline your current financial situation. When learning how to negotiate student loan payments with your lender, detailing your financial woes is one of the most crucial aspects. If you can do this part effectively, then your chances of negotiating skyrocket. If you aren’t good at conveying your situation, then your lender might not feel empathetic at all.

Here’s how to convey your situation – be honest, straightforward, and clear. Direct state why you can’t pay your loan or why continuing to make payments will cause a financial hardship for you and your family.

Keep Your Letter Direct and Short

While you’re drafting the above paragraph, it’s very tempting to lay out your entire story, personal financial details, and more. It’s best not to do that, though. Instead, be direct about what’s caused your financial situation – did you lose your job? Did you suffer a recent injury? Are rising prices leaving you to decide between food for your kids and paying off your loans? State the cause of your financial distress.

Explain How You Resolved Your Financial Issue or How You Plan to Solve it

Another paragraph you may want to include should explain how you resolved your financial situation or how you plan on solving it in the future. Providing this information will help give your lender more of a reason to negotiate with you because they’ll see that you’re committed to changing your situation.

Explain Why You Don’t Qualify for Loan Forgiveness Options

Another important aspect of your letter should be explaining why you don’t qualify for traditional student loan forgiveness programs. If you fail to note this, then your lender might waste time directing you towards these options instead of negotiating.

Why Should Your Lender Forgive Your Loan?

Another important factor you need to note to successfully negotiate student loan debt is to explain why your lender should forgive your loan and what your plans will be if your loan isn’t forgiven.

If you’re struggling to meet your student loan payments, then writing a settlement letter is a great way to start negotiating with your lender. A good student loan settlement letter sample should include all the aspects we outlined above. Remain flexible but stand your ground.

Are You in Need of Student Loan Debt Settlement Help?

If you follow the tips outlined in this article, then you should find success crafting a letter in hopes of settling student loan debt you’ve been hanging onto for years. Once you’ve drafted up your letter, it’s time to send it over to your lender. From there, you’ll have to wait patiently for a response.

If you don’t get the response you were after, then don’t get discouraged. Consider reaching out to our student loan settlement experts to learn more about your options and our debt services.

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Gabriel Gorelik paves the way for customer service and operations at United Settlement. He is passionate about numbers and holds a strong belief in helping anyone with their debt. Before United Settlement, Gabriel received his BS in Finance & Economics from Brooklyn College. After graduation, Gabriel went on to build his first financial services company where he managed thousands of accounts for business and consumer clients. He understands the importance of client satisfaction, professionalism, and exceeding expectations.

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