NASFAA Finds No Clear Winner in Award Letter Study

There has been increased interest from policymakers about standardizing financial aid award letters in the name of providing simple and straightforward consumer information. NASFAA is supportive of efforts to improve the student experience, but remains hesitant about the effectiveness of the prescriptive nature of a standardized award letter.  Additionally, NASFAA finds it problematic that despite the volume of consumer information being made available to prospective and current students and parents, much of that information has not been tested in any systematic way among consumers to determine its effectiveness.

In an effort to investigate the concept of improving award letters, NASFAA engaged with JBL Associates, Inc. (JBLA), an independent research firm, to consumer test award letters.  JBLA used focus groups and a questionnaire in order to consumer test three different model award letters: (A) the U.S. Department of Education’s Shopping Sheet, (B) an award letter developed based on the recommendations from the NASFAA Award Notification and Consumer Information Task Force, and (C) a NASFAA-designed hybrid of the Shopping Sheet and NASFAA Task Force letters. Based on the results of this study, NASFAA has released a report and recommendations that we hope will guide the conversation around this important policy area.

JBLA queried the study participants about the clarity of each of the three letters, and asked participants to highlight features of the letter they found helpful or confusing, and if they had any suggestions for improvement.  Participants’ comprehension levels of financial aid concepts and content as presented in each letter were also tested. In addition to the questionnaire, JBLA conducted focus groups in three geographically diverse locations with students and parents at the high school level, and in colleges across all institution types (community college, four-year public, four-year private not-for-profit, and for-profit).

The key finding of this study is that, among the three award letters tested, there was no clear winner. Participants thought that aspects of each award letter were useful, but JBLA found that no document could replace a knowledgeable financial aid advisor to provide further explanation and assistance in understanding the award letter. This also serves to confirm NASFAA’s assertion that until consumers are directly involved in the development of new consumer information products, it is impossible to accurately gauge what they want or need.

Overall, students and parents said that they felt overwhelmed and confused by the information presented. Comments included a joking request for a book called “Financial Aid for Dummies” to help decipher the information, and a remark from a parent that “everything seems so complicated these days. I feel like I need to take a class to understand [the financial aid process].” In terms of rating the individual letters, 46% of respondents stated that NASFAA Hybrid letter was favored overall in terms of clarity and ease of comprehension, with the NASFAA Task Force letter and Shopping Sheet trailing behind at 28% and 26% respectively.

As result of this study, NASFAA is offering the following four recommendations to frame any further discussion of award letters and consumer information:

  • Require additional consumer testing. More extensive testing of award letter models is necessary to identify consumer needs. Rigorous testing of both existing and any proposed new consumer information should be a priority.
  • Provide a glossary of standardized terminology, for school use in constructing award letters, consumer use in understanding aid offers, and government use in writing informational materials. 
  • Provide institutions with the flexibility to format core elements to address the unique circumstances and needs of their students. Students in different situations have different needs.
  • Reassess how and when consumer information is needed and useful. The number and volume of required disclosures is counterproductive; targeting the timing of certain disclosures would improve their effectiveness.

Previous work by the Center for American Progress in assessing the College Scorecard tool has echoed the need for robust consumer testing before pushing these products out to the general public.  We hope that our report joins their work in moving this important conversation forward, as we seek to achieve the right balance of consumer information to assist students and parents in the critical process of choosing a college that is the right fit for them financially.


Publication Date: 4/2/2013

Vicki W | 4/2/2013 11:10:46 AM

Even worse for those attending a proprietary institution!!

Michael C | 4/2/2013 8:26:13 AM

The College Scorecard, the Shopping Sheet, and the NPC are very confusing to those attending a community college.

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