Consistent and Clear Financial-Aid Award Letters Urged
In the spring, many families eagerly await news of how much money will be provided in financial aid to cover college expenses. Help can come in the form of scholarships, grant, loansand often a combination of the three.
Word usually comes to students in the form of an award letter. Because some of this aid is a gift and some needs to be repaid, the bottom line costs to families can be confusing.
Today, the National Association of Student Financial Aid Administrators released recommendations to improve the situation and clarify communication. NASFAA's Award Notification and Consumer Information Task Force published a report to provide award-letter best practices along with a glossary of standardized award-letter terms.
While NASFAA recommends standardization of certain award-letter terminology and elements, it acknowledges that there needs to be some flexibility for institutions to customize communication for their own student populations.
The Washington-based association of professionals working in financial aid includes on its website a sample of how to organize an award letter. Rather than a single
piece of paper, NASFAA suggests students be sent a packet of materials, including the letter and cross-references to other institutional information. There is also an award-package comparison worksheet online for students to fill out each school's offering in gifts and loans, compared with the cost of attendance. The sheet includes definitions of terms to clarify the financial-aid offer.
The task force was made up of financial-aid professionals from private, public, for-profit, two-year, four-year, and graduate/professional institutions. In its work, the group surveyed financial-aid officers and consulted with consumer groups, higher education associations, and student-aid experts.
NASFAA intends to share the report to the U.S. Department of Education, members of Congress, and the Consumer Financial Protection Bureau for consideration as policy is developed in this area.
"As Congress and the Obama administration explore ways to improve financial-aid award letters, we encourage them to consider the recommendations put forth by financial-aid professionals," said NASFAA President Justin Draeger in a press statement. "Incorporating the recommendations of the professionals who assist students on a daily basis and have the best working knowledge of the financial-aid programs will help maximize the effectiveness of award letters and avoid unintended, negative consequences of overprescriptive standardization."