NASFAA President Makes Recommendations to ED on Award Letters
NASFAA President Justin Draeger recommended to the Department of Education (ED) in a public meeting Tuesday, key elements and model formats to improve award letters for students and their families.
"We believe a model or models of award letters would be very useful, but the implementation of an exact, standardized award letter would be detrimental," Draeger’s written testimony states. "Student aid award letters are not regulated. Regulation in this case would be undesirable given the vast array of institutional prerogatives and variety of student body characteristics that exist. However, modeling and some standardization would serve students well."
ED hosted the meeting to solicit help from the public and the higher education community on the best means and practices for providing the actual price of a postsecondary education program to students and their families, in accordance with the Higher Education Opportunity Act (2008). Award letters are used to inform students about the cost of college and financial aid awards and needs, as well as allow for cost comparison between institutions.
NASFAA contends that because each institution has varying missions, strategies, and measures for its aid packages, schools need latitude to customize their award letters. Standardization should apply primarily to definitions and terminology rather than format or organization of content. A standard terminology better allows students and families to compare costs across institutions, though the format by which those terms are enumerated may vary by institution.
For example, NASFAA recommends to ED that the following elements be included in the presentation of the award letter and in a fairly consistent location in the award letter:
- Cost of attendance - While even the basic elements of cost of attendance may vary in presentation, having a commonly defined figure would allow common comparisons between schools. Breakdowns in direct versus indirect costs can be provided as needed by the school.
- Estimated costs that remain after gift aid is subtracted - This information conveys the amount that the student or family will be responsible for in the form of self-help. Standard terminology to identify this amount would be helpful for students who are comparing costs for multiple schools.
- The self-help aid offered or recommended by the school and the amount of estimated costs remaining for the student and family to fund - This unmet need may vary significantly even among schools with similar costs, depending on the packaging policies of the school. For example, some schools present unsubsidized and/or parent loans as part of the package, while others simply present information about those loans as possible ways to cover unmet need.
- The cost of borrowing - Clear presentation of current and projected costs of borrowing helps a student understand that loans must be repaid and that loans only defer payment of educational expenses. Terms and conditions of loans don’t often fit into an award letter, and as such accompanying materials are important.
At the meeting, Draeger also highlighted three NASFAA tools (included in the NASFAA Award Letter document) developed to aid institutions in the drafting of award letters. These include:
- Sample Organization of Recommended Award Letter Information – This chart is designed to illustrate the concept of the award letter as encompassing more than a one-page letter, but including necessary related materials presented as cleanly as possible. The chart represents one sample approach. The information could be organized and presented very differently for electronic award letters as opposed to paper.
- Elements Encompassed by Award Letter Materials - This blank worksheet assists schools in assessing where information is included on their financial aid award materials. The accompanying completed sample worksheet provides a concrete example of an institution and how they disclose information on their award letters, supporting documents, and where additional information may be cross-referenced. Again, this tool is designed to provide one example of how the award materials can be presented.
- Award Package Comparison Worksheet – This worksheet is designed to assist students and families in comparing aid offers from different institutions.
Other panelists presenting information at the meeting included David Hawkins of the National Association for College Admission Counseling, Mark Kantrowitz of FinAid and FastWeb, Nina Marks of Collegiate Directions, Inc., and Matthew Reed of The Institute for College Access and Success.
During the second half of the meeting, attendees took part in small group discussions and reported the results of the discussions at the conclusion of the meeting.
The Office of Postsecondary Education created a website to describe the project, post sample award letters and invite public input. The deadline for sending written comments has passed, but comments can be viewed by entering ED-2011-OPE-0009 into the "Keyword" box at www.regulations.gov.