Study: Financial Aid Award Letters Need More Clarity, Transparency

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Financial aid offers play a big role in the college decision for admitted students.

But these offers are often confusing and award letters vary wildly, leaving students to make one of their first major life decisions without access to clear information.

“I think anyone who’s worked with students is just like, ‘No, no, no, no, no. What a mess,’ ” Rachel Fishman, a researcher with New America, told NPR. “It’s really the Wild West when it comes to how these letters look.”

New America and uAspire, a nonprofit focused on college affordability, analyzed thousands of financial aid award letters in a recent study and found that award letters lack consistency and transparency.

“This is a really critical moment. This is the moment you decide,” said Laura Keane, uAspire’s chief policy officer. “Students rely on these financial aid offers to make their decisions.”

Some of the challenges students face when evaluating these offers include too much technical jargon, not having access to the total cost to actually attend the school, and seeing a large award number without information about what creates that total.

“We’ve learned that it’s not as simple as just changing something on a single page,” Keane told NPR. “It’s really about transforming how to do student-centered financial literacy communication.”

Some colleges, like the University of Iowa, have made strides in these efforts and seen positive results.

Sara Even, a senior associate director of financial aid at the University of Iowa, told NPR that her school had noticed a pattern among dropouts. Many first-year students wouldn’t realize until October that they couldn’t afford tuition.

In response, Even’s office redesigned their award letter so that it was personalized for each student. If a student didn’t qualify for a Pell Grant or work-study, it wouldn’t be included. The Parent Plus loan was removed. They also changed the link on their student portal from “Loan Document Status” to “My Financial Aid To-Do List.”

After the changes, her financial aid office has seen a reduced number of calls and deeper questions from prospective students.

“We need to be honest with our students even if that means ultimately they may not choose our school,” Even said.

Listen to the full story and learn more about efforts to standardize financial aid award letters.

Ashley Dobson is NACAC’s senior communications manager for content and social media. You can reach her at adobson@nacacnet.org.

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