A New Push to Make Financial-Aid Offers More Transparent

"So how much does this cost? It’s a simple question people ask all time, whether they’re shopping for a winter coat or a Camry. But as many Americans know, it’s much more difficult to determine exactly how much money they’ll need to cover the costs of attending a particular college. For one thing, financial-aid offers are often downright confusing," The Chronicle of Higher Education reports

... "'Over time, colleges have developed their own language or parlance, and it’s often very focused on the way that administrators think about financial aid,' said Justin Draeger, president and chief executive of the National Association of Student Financial Aid Administrators, which is part of the initiative. 'So what you have are aid offers that are all over the place.' As a result, it’s often difficult for students to get a clear sense of how much they must pay to attend a particular college, making it a challenge to compare the offers they receive."

"Draeger described some typical concerns about aid offers. 'One of the most common things we see is that they don’t contain the costs to the student or family. It’s ‘here’s how much financial aid you’re getting,’ but it’s devoid of the cost that they’ll be incurring. And that includes both billable direct expenses to the institution but also the nonbillable indirect expenses that schools use in constructing a cost of attendance for financial-aid purposes. Some families are just interested in how much they owe the school. Others will need financial aid to cover nonbillable expenses, like rent or transportation. Those costs are a really important piece of the financial-aid picture.'"

"Another common issue: colleges 'mislabeling' student loans. 'That might mean not labeling loans as actual loans,' Draeger said. 'Other times, it’s combining loans and grants when, really, those two things ought to be separated. We’ve found examples of colleges that have lumped all their financial aid into sort of one bucket.'”

"Colleges aren’t trying to mislead students, Draeger said. But understaffing in financial-aid offices and the nonstop scramble to meet students’ needs while complying with federal regulations can leave a staff with little time or bandwidth to update its information system with consumer-friendly language, or to make sure its aid offers reflect the industry’s latest best practices."

NASFAA's "Notable Headlines" section highlights media coverage of financial aid to help members stay up to date with the latest news. Articles included under the notable headlines section are not written by NASFAA, but rather by external sources. Inclusion in Today's News does not imply endorsement of the material or guarantee the accuracy of information presented.


Publication Date: 11/29/2022

View Desktop Version