A new report has determined that financial aid award letters often are confusing and inconsistent, creating challenges for families trying to make financially-informed college decisions.
The report, “Decoding the Cost of College: The Case for Transparent Financial Aid Award Letters,” was released on Wednesday by think tank New America and uAspire, a nonprofit organization that offers college affordability training and advising to students while fighting for policy and systems changes that remove financial barriers for low-income and first-generation college students. The researchers performed a quantitative analysis of more than 11,000 financial aid award letters received by Class of 2016 seniors from 194 high schools, as well as a qualitative analysis of a subset of 515 of those letters, Diverse Issues in Higher Education reports.
The qualitative analysis revealed numerous barriers to understanding how much financial aid a student received and how much fell to them to pay, including confusing jargon and terminology; omission of the complete cost and how much of it was covered by the offered aid package; lack of clarity and differentiation among types of aid; misleading descriptions of Parent PLUS loans as “awards”; failure to define and differentiate work-study from other types of aid; lack of consistency and clarity about how much students would be required to pay beyond aid; and lack of clear instruction about how to accept or decline the aid package.
According to Laura Keane, chief policy officer at uAspire, the lack of “a common standard of terms and how they are defined across stakeholders… can be confusing and misleading.” She added that “current practices are creating deep confusion for students, parents, and practitioners.”
The report’s authors made a number of recommendations to address these concerns, including calling on the Department of Education to create standardized templates for award letters.