HEA Update: Standardized Financial Aid Letters Proposed

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Financial aid award letters have long been a topic of conversation within the college admission counseling profession, and as discussions about reauthorization of the Higher Education Act (HEA) intensify, Congress seems poised to join the conversation.

Last month, Sens. Chuck Grassley (R-IA), Tina Smith (D-MN), and Joni Ernst (R-IA) introduced the Understanding the True Cost of College Act of 2019 — stand-alone legislation intended to be included as part of the larger HEA reauthorization.

If passed, higher education institutions would be required to use a uniform financial aid offer form containing standardized definitions. According to the bill’s sponsors, the move is intended to ensure colleges provide information to students and families in “a consumer-friendly manner that is simple and understandable.”

NACAC has a long record of involvement with financial aid award letters. Interpreting and comparing aid offers is one of the most difficult tasks our school counselor members say they experience during the admission cycle. Likewise, colleges and universities face their own challenges as they attempt to use award letters to communicate their institution’s value to students.

During the last two years, NACAC, led by the association’s Current Trends and Future Issues Committee and Government Relations Committee, has conducted extensive discussions with the National Association of Student Financial Aid Administrators (NASFAA), the New America Foundation, and uAspire, all of which have conducted their own research and policy discussions related to aid award letters.

These organizations agree that a standard set of terms and definitions should be used in all financial aid award letters. However, the groups have not agreed on whether the federal government should require schools participating in the federal financial aid program to use a specific letter format.

What’s next? Conversations with staff on Capitol Hill indicate that, at minimum, institutions can expect new regulatory guidelines for the terms and definitions used in financial aid award letters as part of the package. The bill discussed above, for example, calls for the US secretary of education to develop uniform definitions for key terms based on input from students, families, financial aid administrators, and other experts.

NACAC’s role: Association staff continue to advise lawmakers involved with the HEA reauthorization to ensure NACAC’s policy priorities are well-represented. If you have questions or would like to provide input on financial aid award letters, please contact NACAC’s government relations staff.

Julie Kirk is NACAC’s government relations manager. She can be reached at jkirk@nacacnet.org.

David Hawkins is NACAC’s executive director for educational content and policy. He can be reached at dhawkins@nacacnet.org.

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