"Financial aid award letters are crucial tools for students and families to determine which colleges are within reach, but many letters are difficult to decipher and compare. TICAS' December 2017 analysis of almost 200 award letters, and New America and uAspire's June 2018 analysis of over 500 award letters from unique institutions found numerous ways in which those letters are inconsistent, confusing, and in many cases misleading to students – such as omitting costs, grouping grants and loans together, using different terms for the same type of aid, and not calculating a bottom-line net price to show how much the student and family will have to cover," TICAS writes in a blog post.

"We're excited to see growing momentum for improving award letters, and we applaud the National Association of Student Financial Aid Administrators' (NASFAA) recent support for requirements that would set standard terminology and formatting practices for award letters. Specifically, at their recent national conference, the NASFAA Board decided to:

• 'Support a policy that would require schools to disclose estimated cost, as well as an estimated net price in their award notifications.
• Support requirements that the federal government, in partnership with financial aid professionals, develop a set of common, consumer-tested terminologies and definitions for student aid programs.
• Support requirements that grants and loans and other self-help aid not be listed together in award letters, and that loans always be clearly labeled as such.'

... With clearer and more comparable award letters, students and families will be able to make more informed decisions about where to go to college and how to pay for it. NASFAA's recent Board decision aligns with our belief that poor communication that obscures costs and available financial aid serves neither students nor schools. Unclear costs and uncertainty about how to cover them put students at risk of dropping out if their bill is larger than anticipated— and dropping out is one of the major predictors of federal student loan default. Both students and colleges are better off when more students are able to complete and repay their loans successfully. While, in and of themselves, award letters will not solve the gaps in financial aid that create affordability challenges for students, improvements to those communications will help ensure that students and families clearly and accurately understand the costs they'll be facing.

We applaud NASFAA, federal and state policymakers, as well as college financial aid administrators who see themselves as part of the solution. uAspire has already heard from colleges that are leading the way to improve their own award letters, including Colorado State University, the University of Missouri, and Dartmouth College. If you are working to improve student-centered communication of financial aid offers, we would love to hear from you."

NASFAA's "Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.

Publication Date: 7/25/2018