It’s Official: Award Letters Are Usually Confusing or Even Misleading

June 6, 2018

By Jack Porter, Advocacy Associate

Complicated financial aid processes have consistently proven to impede college access and success for low-income students. New research from the Washington think tank New America and NCAN member uAspire sheds light on one persistent flaw in the system: the letters that colleges and universities send to admitted students detailing the financial aid awarded to them.

Unfortunately, the research found, award letters are often so confusing, vague, or incomplete that families are unable to make a financially informed decision about which institution to attend.

The two organizations convened a group of experts in Washington, DC, yesterday and unveiled their analysis of more than 11,000 award letters, showing that not only can students be left uncertain about the expenditures necessary to get through college, but that the portrayal of different forms of aid can be grossly misleading.

Kicking off the discussion on the current state of transparency in award letters, panelist and NCAN Executive Director Kim Cook offered a humorous comparison to nutrition labels. “You probably had more transparency about your breakfast cereal than your students had with their award letter,” she said.

For example, students who are eligible for the Federal Work Study (FWS) program do not receive these funds upon acceptance of the aid package or enrollment. Instead they must take several additional steps to find and apply for work-study positions with their institutions. However, 70 percent of letters provided no explanation of the program, likely leaving students to assume that the aid is guaranteed. uAspire Policy Officer Laura Keane noted,  “Some of our students see a dollar amount for ‘Work Study’ and assume that’s an award they get automatically.”

The panel also included Colorado State University’s (CSU) Director of Financial Aid Tom Biedscheid. CSU recently undertook an effort to improve their approach after Biedscheid received a phone call from a school counselor at a predominantly low-income high school in Denver who was working with numerous confused students.  Biedscheid’s experience with these students who had their CSU award letters in-hand, but did not understand the institutional aid being offered to them, was a watershed moment for him.

After meeting personally with the 15 high school seniors, he not only acknowledged the need to improve CSU’s award letter, but also recognized the incredible responsibility of counselors to understand what the report calls “confusing jargon” across letters from countless institutions. “It became very apparent that we needed to do some significant work on our financial aid award letter,” he said.

Today, CSU’s award letters are generally aligned with the policy recommendations released in yesterday’s report, such as identifying direct costs and indirect expenses, and differentiating loans and grant aid.

The report also quantifies the immense costs that low-income students and families are asked to cover after grants are awarded and loans have been taken out by the student. On average, students receiving a Pell Grant had to come up with $12,000 outside of their aid package for their first year of higher education.

Cook remarked that this finding offers a glimpse into the underlying problem of increasing college costs. “Research like this gives us a window into the challenges that our students face as we try and tackle the larger affordability issue that we have in this country,” Cook said.

In summation, Keane called for transparency from the beginning of the process to the end. “It’s not what it costs to start. It’s what it costs to finish. And we need to be clear about what those costs are with students at every step of the way so that they can make smart, financially informed decisions,” she said.

One resource for institutions that wish to improve their award letters is the U.S. Department of Education’s Financial Aid Shopping Sheet tool which was updated in 2013. If your organization works with institutions that send confusing award letters, NCAN recommends sharing the new uAspire/New America research with them and asking them to consider improvements.

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