New Report Aims to Design Better Financial Aid Offer

By Owen Daugherty, NASFAA Staff Reporter

Financial aid offers can at times be confusing and difficult to deduce for students and their families, often due to poor design and a lack of clarity. But perhaps involving students and parents in the design and development can lead to an improved experience.

Public policy think tank New America set out to do just that, conducting a series of focus groups consisting of both students and parents to help determine some of the best methods and formats for clearly communicating an institution's cost of attendance and a student’s financial aid offer. Researchers then took the information gleaned from the focus groups and put students, parents, financial aid administrators, and college enrollment officers together for a day-long design workshop to have them work together to create a concrete financial aid offer prototype.

Guided by the ideas from the workshop — which included NASFAA members — a user-experience design expert aided New America researchers in developing three prototype aid offers, each consisting of the same components: college costs, financial aid (including grants and loans), net price (full cost of attendance minus grants and scholarships), remaining cost to the student after loans are included, alternative financing options, and the next steps a student must take to accept the award. The prototypes and user feedback were detailed in New America’s report released today.

While all three prototypes had those consistent elements, there was variance in distinct design features, which is something focus group participants had suggested.

“Participants agreed that they want offers to follow a similar format to make comparison easier among schools but still allow some flexibility for a college to add its personality,” the report stated.

In a recently updated issue brief on best practices for financial aid offers, NASFAA noted aid offers should be student-centric and transparent, using consistent terminology and clearly communicating all direct and indirect costs while giving aid offices “flexibility to design aid offers that meet … students’ needs.”

During usability testing of the three prototypes, researchers used a success criteria based on findings from a previous report, “Decoding the Cost of College,” and feedback from the focus groups. In order to navigate financial aid offers, students and parents must be able to understand the following: the differences in financial aid packages, the full cost of attendance, the concept of “net price,” the availability of other financial resources and alternative payment schedules, and the next steps for accepting, reducing, or declining any types of aid.

Most participants agreed on the order in which the different components were listed in the financial aid offer, the report found, starting with cost and followed by grants and scholarships, student loans, alternative financing options, and next steps.

Additionally, a majority of the participants were able accurately calculate price as well as identify and correctly total their scholarships and grants, how much they could borrow in federal student loans since they were already set apart from grants and scholarships on the offers, and how much work-study money they were eligible to receive, if any.

Based on the feedback from user groups, usability testing of prototypes, and research, one final prototype was created, aptly named “New America University,” which featured information on full cost of attendance first on the aid offer.

“This prototype is meant to be an example of how information can be clearly communicated so that students and families can understand the information correctly on their own,” the report stated.

After presenting the full cost of attendance, grant and scholarship aid was listed and totaled, followed by federal student loans.

The report noted that researchers took on designing the final aid offer prototype with the assumption that the offer would act as a cover sheet of sorts to the student and their family, followed by more detailed information or links to other resources from the institution.

“In designing financial aid offers, there is a tension between simplicity and the provision of more information,” the report added.

NASFAA has and continues to do extensive work regarding aid offers, and as more consumer testing and reporting on aid offers has been completed, NASFAA has adjusted and expanded its policy position and Code of Conduct requirements. Late last year, the NASFAA Board of Directors voted to update NASFAA’s Code of Conduct regarding aid offers to require the inclusion of estimated net price, renewal requirements, next steps, and financial aid office contact information.


Publication Date: 1/27/2021

David S | 1/27/2021 5:0:34 PM

I still think that the root of the "financial aid offer notices are confusing and opaque" argument is that the offer notice (or whatever we want to rename award letters) is not a bill. We're already working against varying degrees of factors such as low financial literacy, a financial aid system that is very complex and confusing at every step, and anxiety about costs and the college selection. But many of the complaints that I read about our (meaning our entire profession, not just my school) communications are "I want to read this and know exactly how much I'm going to have to pay."

That would take things like a pay-one-price uniform approach to tuition and fees that every student pays, no matter how many credits, what courses they take, etc, etc. Those are decisions made nowhere near the Financial Aid Office, and maybe we're not the only ones who need to be sitting around this table.

James C | 1/27/2021 9:48:59 AM

Any offer that contains the EFC is going to be confusing. I believe it is un-necessary. It is simply an index number that means nothing to families.

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