Aid Letters Without Information Students Need

Report finds many colleges leave out key points -- or present information in confusing ways. How many ways can you say "loan"?

June 11, 2018

For many students and parents who weighed admissions offers this spring, the financial aid letter was key. How much aid was offered? Would loans be required? If so, what kind of loans? Had students been "gapped"?

A report issued last week by New America and uAspire finds that colleges routinely use award letters that fail to provide students and families with the information they need. The report notes that many low-income students don't receive enough aid to enroll, so understanding loans is a crucial issue. Many advocates for low-income students have made these complaints in the past, but the report attempts to quantify the problem.

The report examined award letters from 515 institutions. Among the findings:

  • Of the 455 colleges that offered an unsubsidized student loan, 136 terms were used for the loan, including 24 that did not include the word "loan."
  • Of the 515 letters, more than one-third did not reference actual costs of attendance at the college.
  • Seventy percent of letters "grouped all aid together and provided no definitions to indicate to students how grants and scholarships, loans, and work-study all differ."
  • Nearly 15 percent of letters counted PLUS loans as an "award," without indicating that they are loans.
  • Of those institutions with work-study funds, 70 percent did not explain what work-study is.
  • Only about 40 percent of colleges calculated what students would need to pay, and they used 23 different methodologies for determining that total.
  • Only about half of letters included "next steps" for students.

The report notes that there are many challenges to providing enough money for students to go to college. But it says that there is no excuse for the poor communication with students that the report found. Clarity and consistency should be possible, the report says.

"It is exceedingly difficult for students and families to make a financially informed college decision," the report says. "While solutions for tackling the cost barrier may be complex, solutions to improve award letter terminology and formatting are well within reach."


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