Confused by your college financial aid letter? You’re not alone
Around the same time last year, McKenna Hensley had a big question in mind: where would she go to college? The answer – sort of – was somewhere in his stack of 10 financial aid offers. Each school she was admitted to had its own letter, conditions and individualized calculations.
“It was very confusing,” recalls the freshman now in college.
A letter comes to mind: the school had bolded about $ 76,000 in the upper right corner of its offer. She remembers smiling very loudly and thinking, “I have a lot of money! But when she looked a little closer, she saw that the great number included loans. Hensley was determined not to borrow. She took the letter and added up all the attendance fees, then subtracted the grants and scholarships and found that she was still about $ 30,000 missing.
“I was like, ‘Oh, you almost got me!’ she laughs. “‘This is a bad deal.’ “
Hensley ended up enrolling at Ohio State University, where scholarships and grants covered it all, but the emotional roller coaster of his financial aid offers still looks very fresh.
“You will feel like you have a lot of money,” she said, “but you don’t.”
Right now, students across the United States are in the process of choosing where to enroll. For many, this decision is closely tied to the offer of college financial aid. But in the absence of current standardization of these offers, the letters are very different from one school to another. They are often filled with confusing terms and the numbers are all over the map.
“I think anyone who’s worked with students is like, ‘No, no, no, no, no. What a mess,’ says Rachel Fishman, a researcher at progressive think tank New America. She helped co-write a report with the non-profit uAspire which analyzed more than 11,000 award letters from about 500 colleges, most of which were four-year institutions.
“It really is the Wild West when it comes to how these letters look,” she says.
And this is not only a disadvantage for students and parents, it has lasting consequences. “This is a really critical time. This is the time you decide,” said Laura Keane, uAspire policy manager. “Students rely on these financial aid offers to make their decisions.
It’s also when students first assess their options with student loans, which can follow them into adulthood.
3 big problems with financial aid award letters
As offers of financial aid are addressed to individuals, researchers have had difficulty studying them en masse. But uAspire, an organization that works with students during the admissions process, has been collecting them for years. The UAspire-New America Report gave the following lessons:
1. There is a lot of jargon and terminology. Take something like the direct unsubsidized federal loan, which often appears on award letters. To be eligible, students simply need to complete the Free Federal Student Aid Application, or FAFSA. The researchers found that colleges referred to this loan in 136 different ways in their financial aid letters. Some colleges didn’t even use the word “loan” – they called it “Fed Dir Unsub” or just “unsubsidized”.
Many of these weird names come from the software schools use to generate letters, Fishman explains. Yet, she says, “this is just a damning example of even the smallest thing that should be really simple – there are so many institutions doing different things.”
2. More than a third of schools did not state how much it would cost to attend – only how much the student received. “The first thing you try to figure out is, ‘What is this going to cost me?’ “said Fishman. “You’re looking for that number, and there’s nothing.”
3. Seventy percent of deals collect all helpers, so it looks like a big giveaway – as Hensley found in his letters. This assistance included loan money, even if the students had to repay that money. Some schools have bundled things like co-op, which pays students when they work throughout the semester and doesn’t help cover tuition when the bill is due at the start of the year.
Nonprofits, school districts, and guidance counselors help students, especially low-income students, navigate their letters. Hensley worked with a virtual advisor from the nonprofit College Advising Corps. This counselor shared a Google spreadsheet with formulas to help him compare schools. Hensley only had to scan the letters for things like total scholarships, grants, tuition, and living expenses, and then insert those numbers into the document. The tool performed calculations so Hensley could easily see which schools she would still need the money for.
Many nonprofits offer similar calculators, and a handful of school districts have tools to help students sort their numbers, like this one from the District of Columbia public schools.
Politics is catching up
At the national level, there is legislation to address this problem. In March, a group of bipartisan senators – including Chuck Grassley, a Republican from Iowa – reintroduced a bill to standardize financial aid award letters.
Students need to know how much it costs to go to college, Grassley told NPR, “not something that is cloudy and doesn’t really go like that.” Why shouldn’t we bring as much truth to the university process as possible, he said.
The bill would make offer letters the same across all schools, with standardized definitions and terms so students could easily compare them. While there would be room for customizations, it would be more difficult for schools to add extraneous information that could hide numbers, calculations, or next steps specific to an individual’s financial needs.
Similar efforts have already been made. In 2012, the Ministry of Education created a standardized financial aid form, then called the Purchase sheet. But schools weren’t required to use it, and according to the uAspire-New America report, many schools didn’t. This standard form, now called the College financing plan, gets a makeover.
And while previous legislation didn’t go anywhere in Congress, there is a lot more bipartisan support today.
Tennessee Senator Lamar Alexander, Republican and chair of the Senate Education Committee, spoke about Grassley’s bill when he outlined his priorities for new higher education policy in February.
“I was against it because I’m quite opposed to federal rules”, Alexander noted in front of a full house at the American Enterprise Institute. “With so many students receiving letters each year that are not clear on what to repay and what not to repay, I think a requirement is a good idea.”
Schools make changes before politics
Attitudes in colleges and universities are also changing. In the past, institutions balked at standardization – financial aid offers are a big part of how they get students to enroll and convince them that their offer is the best.
But across the country, institutions have started to reassess the way they present their offers of financial aid. Colorado State University has undergone two realignments under the leadership of Tom Biedscheid, assistant vice president of enrollment and access.
“We thought we had received an incredible letter before,” says Biedscheid, but two and a half years ago he received a call from a frustrated high school guidance counselor: more than a dozen of his students had been accepted. at school, but after reading the financial aid offer, no one was ready to enroll.
“It was then that we realized that we had to make an effort to make our offering easier to understand, as this was the most important document a student was going to receive,” said Biedscheid.
For the first remodel, the state of Colorado sent letters clearly defining direct and indirect expenses. He separated loans from money that did not need to be repaid, such as scholarships and grants. And they eliminated the loans taken out by parents, called Parent Plus loans. This current admission cycle, he added a glossary of terms at the end. Biedscheid says the number of questions from potential students has decreased.
He says it’s important that there is consistency in the information schools provide to students, but he’s concerned that a standard federal form is the wrong answer. “Institutions vary widely, and trying to communicate costs and aid in a unique way could do more harm than good.”
The University of Iowa also changed his letters. According to Sara Even, senior associate director of financial aid, the school saw a frightening trend about a year ago: Freshmen enrolled in the fall semester were realizing in October that they hadn’t not enough money to pay their tuition fees. .
The financial aid office thought it might be able to resolve this issue by redesigning its financial aid offer letter. He worked internally to design a personalized branding letter for each student. If a student was not eligible for a Pell scholarship or work-study, these were not included in the letter. Like the state of Colorado, it removed the Parent Plus loan from its offering. And he renamed a link on his student portal from “Loan Document Status” to “My Financial Aid To Do List”. It was an attempt to make the terms more transparent and provide students with clear next steps.
“We have to be honest with our students, even if it means that at the end of the day they might not choose our school,” Even said.
After the overhaul, Even says, the Iowa financial aid office received fewer calls and emails, and the questions changed. They are less about the process and “How much do I owe?” “; instead, they’re deeper and more nuanced. These are the kinds of conversations Even says she wants students to have now, rather than August or September when it’s too late.
The nonprofit that initiated the research with New America, uAspire, worked with institutions to adapt lessons from Iowa and Colorado.
“We’ve learned that it’s not as easy as just changing something on one page,” says Keane of uAspire. “This is really about transforming the way student-centered financial literacy communication is done.”
And it’s not just financial aid bureaus that need to adapt their language and framing, she says; it’s also admissions, scholarships and online student portals. Everywhere on campus, the language should be clearer and student-oriented.