University Business - November/December 2011 - (Page 17)

FINANCIAL AID Improving Financial Aid Award Letters What’s probably wrong, and how to make it right By Haley Chitty A RE THE FINANCIAL AID award letters your institution sends to returning and prospective students clear, correct, complete, and comparable to other institutions’ award letters? e federal government thinks that too many are misleading and diﬃcult to compare. at’s why Congress mandated the U.S. Department of Education to convene a group of students, families, high school guidance counselors, ﬁnancial aid administrators, registrars, business oﬃcers, and nonproﬁt consumer groups to make recommendations to improve ﬁnancial aid award letters and develop a model format based on those recommendations. INHERENT CHALLENGES College costs and ﬁnancial aid packages are inherently complex and can vary widely for diﬀerent students. It is a challenge for administrators to accurately predict how much each student will pay, let alone convey this information in an award letter. e reality is that institutions will never be able to accurately distill all the cost factors and scenarios onto a single award letter that is easy for students and families to decipher. Schools must make tough decisions to highlight the most useful information without overwhelming students and parents with too much information. Ultimately, ﬁnancial aid award letters must be supplemented with additional information and counseling to ensure students have a reasonable understanding of how much they will be expected to pay. Students may end up choosing a school that looks more affordable but winds up costing more. e challenges presented by the award letter means there will always be room for improvement. COMMON CRITICISMS Consumer groups and ﬁnancial aid policy experts have highlighted several areas where ﬁnancial aid award letters often fall short. “All too often ... colleges send award letters to prospective students that understate costs they’ll incur at the institution; overstate the generosity of the ﬁnancial aid packages they oﬀer; and obscure or misrepresent the true bottomline price they will have to pay,” Mark Kantrowitz, a student aid policy expert, recently wrote in a blog post. e Institute for College Access and Success (TICAS) agrees with Kantrowitz’s assessment. In a letter to Department of Education oﬃcials, TICAS stated that there is room for higher education institutions to improve the clarity and comparability of aid letters and to make them more consumer friendly. Speciﬁcally, TICAS and Kantrowitz point out that too many letters: • Only include some of the costs and fail to state and/or underestimate the full cost of attendance (COA) • Do not indicate the out-of-pocket costs for students and their families • Don’t suﬃciently make a distinction between gift aid (grants and scholarships) and work-study and loan aid that must be earned or repaid with interest • Don’t highlight the gap between gift aid and the COA • Don’t include the terms and conditions of loans included in the aid package “ ese diﬀerences can make the letters diﬃcult to understand and compare, requiring students and families to Haley Chitty is director of communications at the National Association of Students Financial Aid Administrators, www.nasfaa.org. universitybusiness.com November/December 2011 17 http://www.nasfaa.org http://www.universitybusiness.com

Table of Contents for the Digital Edition of University Business - November/December 2011

University Business - November/December 2011
Contents
Editor's Note
College Index
Ad Index
Behind the News
Financial Aid
Viewpoint
Education Gateways
Models of Efficiency
Business Intelligence Gets Smarter
Internet Technology
Independent Outlook
End Note

University Business - November/December 2011