By Megan Walter, Policy & Federal Relations Staff
On Friday, the Department of Education (ED) reissued its recommendations for institutional aid offers, updating a few of its original recommendations that were released in April 2019. Additionally, ED has also released the 2022-23 College Financing Plan (CFP), which illustrates its newly formed recommendations for aid offers.
The most notable change to ED's recommendations is the change in language. The former used phrases such as "avoid calling or avoid listing," while the newest iteration uses less passive language, plainly stating the recommendations, using language such as "always include, or explain how."
While the recommendations were overall very similar, ED did add defining language and more context to some of them.
Referring to how to name aid offers, ED has updated its old recommendation which suggested that institutions use "financial aid offer" or "college financing" in place of words like, "award" or "letter." Now, ED recommends only using "financial aid offer," presumably because of the confusion of an institution using both its own aid offer as well as the CFP.
In its previous recommendations, ED only suggested that institutions "avoid issuing aid offers that do not include cost of attendance," and instead now says institutions should "always include" cost of attendance in their financial aid offers. Related, ED updated its recommendations stating that institutions should also clarify the enrollment status of the student that the institution is basing its cost of attendance calculation on, and whether the student is considered in-state or out-of-state.
ED also used this reissue to define more clearly how an institution should calculate net cost on its aid offers. While the original suggestions stated that net cost "is the difference between the total cost of attendance (COA) and all grant/scholarship aid received," ED added text reminding institutions that they "should not present the net cost information in ways that may confuse students, such as subtracting private or Parent PLUS loans from the cost of attendance and/or zeroing out the cost with those types of loans."
Lastly, ED added to its original guidance around the packaging of Parent PLUS loans, reaffirming that these loan types should not be packaged in the same "section" as federal Direct subsidized or unsubsidized loans, and no estimated dollar amount should be included on the aid offer if PLUS loans are included. ED applied this same guidance to institutional loans and private loans.
These new recommendations closely align with NASFAA's Code of Conduct for aid offers, though they do not include NASFAA's recommendation to include financial aid office contact information in addition to next steps, and NASFAA does not have a specific recommendation related to how Parent PLUS, institutional, or private loans should be listed on an institution's aid offer.
Publication Date: 11/1/2021
Janice K | 11/5/2021 11:3:20 AM
I agree with all of the previous comments. Families/students do not always understand COA, direct cost or indirect cost. What they receive in the offer is an estimate at best. The direct cost in the COA is based on averages which again will be an estimate. When you take into account the aid offered against estimated direct cost, a net cost is results that gives a family and idea of the financial obligation. However, when you add indirect cost, they get even more confused. ED please come up with something better that students/families can follow.
Susan P | 11/5/2021 9:58:04 AM
Agreed and Agreed! In MANY cases at our community college we are sending out aid offers prior to a students registration, so it is impossible to include an accurate cost of attendance. Very often this guidance is written with 4 year colleges in mind. It is extremely challenging for us to follow some of the regulatory guidance.
James C | 11/5/2021 8:26:15 AM
Has anyone at ED worked in an aid office? The COA is very confusing to families. Estimated billable charges should be clearly defined on the aid offer with estimated aid showing the estimated out of pocket direct expenses families will need to pay. You can have another section of the aid offer with "other estimated non direct expenses that students may incur" to cover the full COA.
David S | 11/2/2021 9:30:43 AM
I think we can all agree that Financial Aid Offices "should not present the net cost information in ways that may confuse students," but being that the net cost is an estimate and the subsequent bill is extremely likely to say something different, how are students not going to be confused?
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