ED Releases Guidance on Financial Aid Award Notifications

By NASFAA Policy & Federal Relations Staff

Yesterday the Department of Education (ED) released guidance on what institutions should "avoid" when issuing financial aid offers. The guidance, which was unexpected, comes at the same time ED is requesting feedback on its new College Financing Plan (CFP) and just a week after a group of senators released a bill regarding award notifications, the Understanding the True Cost of College Act. ED is encouraging schools to avoid the following:

  • Avoid calling your financial aid offer an "award" and avoid calling it a "letter."

  • Avoid issuing a financial aid offer that does not include Cost of Attendance.

  • Avoid listing the Cost of Attendance without breaking it down into clear components.

  • Avoid listing grant and/or scholarship aid, loans, and work-study together.

  • Avoid listing student loans without clarifying the source (federal, state, institutional, or private).

  • Avoid listing Parent PLUS loans with student loans.

  • Avoid issuing a financial aid offer without critical next steps.

  • Avoid issuing a financial aid offer without net cost calculated.

It is unclear how the new guidance will interact with the draft CFP, as some of the items in the guidance conflict with the draft CFP, including the treatment of PLUS loans and the requirement that next steps be listed. NASFAA will be submitting feedback to ED on the draft CFP later this month, and continues to advocate at the congressional level for required standardized terms and elements, rather than full standardization.


Publication Date: 4/16/2019

Julie A | 4/26/2019 12:31:18 PM

Another fine example of "rule" or "suggestion" making from someone or a group of individuals so far removed from aid processing, they would require satellite assistance to find their way back to the real world of work.

Jeannie G | 4/26/2019 10:13:57 AM

OMG. I need a raise.

Joel T | 4/25/2019 11:20:11 AM

Out of curiosity, did NASFAA know about this and help shape this policy?

Tracy H | 4/19/2019 2:20:38 PM

I almost have no words! Avoid using the word "letter"? Who came up with this? Avoid using the word "award"? This just seems silly, and I'm disappointed that THIS is what ED is spending its time on! There is ABSOLUTELY NO FORMAT, REQUIREMENTS OR GUIDANCE that is the magic key to unlocking a family's or student's ability to understand the true cost of college...aside from sitting down with them one on one and explaining it to them until they understand it. And unfortunately due to all the burdensome regulations, reporting, tracking, running of processes, etc. etc. etc. that ED and the states have heaped on our office, we've completely lost the ability, the resources, or the capacity to do provide this service! Stop trying to fix and alienate aid offices, and fix the system!

Thomas V | 4/19/2019 10:44:34 AM

Davis S., brilliant!

Anthony M | 4/18/2019 5:17:10 PM

The first line of this "guidance" states: "Avoid calling your financial aid offer an “award” and avoid calling it a “letter.” Loans are not awards."

The introduction to Vol 3, Ch 5 of the handbook states, "The rules for awarding Direct Loans are different than for Pell Grants and other FSA programs. "

Talk out of both sides of your head much?

Judith C | 4/17/2019 10:9:09 AM

I need a serious ED presence, not this.

Lee Ann T | 4/16/2019 4:28:15 PM

After all these years, this is now a problem? Politically motivated as is the memo to DeVos regarding verification numbers?

Jessica H | 4/16/2019 4:24:34 PM

If our institution has signed the Principles of Excellence, are we REQUIRED to not just "avoid" but actually not use at all?

David S | 4/16/2019 1:21:15 PM

The same Department of Education whose beloved application asks for "Other untaxed income not reported in items 45a through 45h, such as workers’ compensation, disability benefits, etc. Also include the untaxed portions of health savings accounts from IRS Form 1040—line 25. Don’t include extended foster care benefits, student aid, earned income credit, additional child tax credit, welfare payments, untaxed Social Security benefits, Supplemental Security Income, Workforce Innovation and Opportunity Act educational benefits, on-base military housing or a military housing allowance, combat pay, benefits from flexible spending arrangements (e.g., cafeteria plans), foreign income exclusion or credit for federal tax on special fuels" is advising us how not to confuse students and families.

Theodore M | 4/16/2019 11:28:21 AM

Kind of Ironic that the title of the article contains one of the words to avoid. :-)

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