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Ed Dept. Holds Meeting on Standardizing Aid Award Letters

NAICU Washington Update

September 23, 2011

The Department of Education held a public meeting on Sept. 13, on plans for developing a model financial aid award letter for colleges to use, as mandated in the Higher Education Opportunity Act of 2008. The meeting included a background presentation by the Department of Education, comments by a panel of experts, and small group discussions. The goal is to make it easier for students and families to understand and compare award letters. There is wide variety in the information colleges provide and the way it is presented. This includes whether tuition and living expenses are both included in the cost of attendance, and how loans are treated. Critics have complained letters can be misleading and used as a way to persuade students to enroll, rather than inform them.

One of the panelists, Mark Kantrowitz, publisher of Fastweb.com and FinAid.org, is an advocate of standardizing award letters to include information about college costs, gift aid, and out-of-pocket costs; distinguish between gift and loan aid; and provide more information about loans and the cost of borrowing.

Justin Draeger, president of the National Association of Student Financial Aid Administrators, agreed with Kantrowitz on the need for clarity and standard terms, but argued for flexibility. He noted there are a number of variables that make it difficult to limit letters to one format. He also argued that uniformity could stifle future innovations and improvements.

Contact

• Maureen Budetti
  maureen@naicu.edu