As if financial aid directors don’t have enough to worry about these days, now they need fear a failing grade on a new Web site, FinancialAidLetter.com, that dissects aid award letters for clarity and transparency.
“Over the years, people have been giving me letters and saying, ‘I don’t understand these,’” says Kim Clark, a senior writer at U.S. News & World Report who launched the Web site last week while on a six-month Kiplinger Program in Public Affairs Journalism fellowship at Ohio State University. “And I would look at them and say, ‘Wow, I don’t really understand them either.’”
“There’s so much jargon; there are so many buzzwords. The letters that students receive from colleges are often unintelligible to 17-year-olds or especially a parent who hasn’t been to college,” Clark says. “It makes it very difficult for families who are trying to compare offers.”
FinancialAidLetter.com offers a glossary defining the jargon and answers to frequently asked questions on student aid issues for high school students and parents. But on top of all that, it “decodes” aid letters from five institutions – Hendrix College, American and Monmouth Universities, and the Universities of Arizona and Pittsburgh – indicating in red any potentially misleading or unclear information. (Clark says that she asked high school counselors to recruit students to share their letters, and so the universities were chosen based on which students were willing).
A group of experts assigns each letter a grade based on clarity and completeness of information. Among the common transgressions cited by the evaluators: Unexplained acronyms and abbreviations, unsubsidized loans packaged as aid without any explanation (running the risk, evaluators say, of students, particularly first-generation students, thinking they’re “free money”), and incomplete information about cost of attendance.
For instance, the University of Pittsburgh, which receives a B-, is faulted for failing to include any explanation of what’s listed on the letter simply as the PHEEA (a grant from the Pennsylvania Higher Education Assistance Agency). The University of Arizona gets a B but also gets demerits for listing federal PLUS parent loans toward the total award (and since parents eligible for PLUS can borrow up to the balance of tuition after grant aid, institutions that do this can end up sending the message that the total aid award equals the total cost, Clark says).
Meanwhile, Monmouth University gets a D, in part for imposing tight deadlines on students and also for including “alternative financing” -- described by graders as “a fancy name for a loan, which shouldn’t be counted as ‘aid’” -- in its award letter.
“I was looking for something simple so that families can sit down and say, ‘Aha, this is how much it will cost to send Junior to college.' None of these letters do so,” says David Hawkins, director of public policy at the National Association for College Admission Counseling and one of the site's six volunteer graders.
“It wasn’t clear what the students and families were in for when it came to total cost, when it comes to how much aid they were getting versus loans.”
Yet, some of the financial aid directors whose letters were dissected describe a different philosophy about whether loans should be packaged as aid, and point out that while they were docked for including few details about various aid options in their letters, the explanatory information accompanying the letters was not considered or evaluated on the Web site.
“Needless to say, I’m not happy about the site,” says Claire Alasio, associate vice president for enrollment management at Monmouth. “The rating, I think, was very arbitrary, very unfair.”
“For example, one of the things that we were critiqued on was not offering the complete cost of attendance. When we publish our award letter, we very carefully specify that the costs we provide are for tuition and fees, in the case of a commuting student, or tuition, fees, room and board in the case of a resident student,” Alasio says. Additionally, administrators make the conscious decision to address the balance between gift aid and cost by including the “alternative financing” line in the award letter – and providing students in accompanying paperwork with various options for paying that balance via "alternative financing," be it through taking out a PLUS or private loans, or enrolling in the university monthly payment plan. “From our point of view, by putting that on the award letter, we’re showing students and parents that there is a way to pay that gap," says Alasio.
“There’s a difference in philosophy between our philosophy at the University of Arizona and the people who run that site,” adds John Nametz, the financial aid director there. “We believe in absolute full disclosure of all options on the award letter,” he says – adding that the university’s letter has a “back page” that wasn’t evaluated on the Web site.
The question of how to clarify award letters isn't a new one within the financial aid world. In 2000, a National Association of Student Financial Aid Administrators committee on college access developed the Award Letter Evaluation Tool to offer colleges “a framework in which to provide ‘what families want to know’ in a language understood by all.”
Yet, the field has generally resisted standardization, Clark says.
“Simplicity and ease of comparability are really important,” she says, criticizing colleges that bury important information in “six inches” of material and underestimate the true costs students will face in their award letters by only including tuition, room and board, and fees (minus books, travel and other expenses).
“At a cost now of sometimes over $50,000, it’s not clear to me why consumers should not be given the same basic consumer rights that they receive in other, less important financial transactions. My God, when they buy a box of Jell-O for 69 cents, they’re given more consumer information than when they spend $50,000," says Clark (who says that she's unsure at this point how the site, which belongs to US News & World Report, will grow, and whether more critiques of letters will be added).
Don Hossler, a professor of educational leadership and policy studies at Indiana University and one of the evaluators for the site, says that as a former vice chancellor for enrollment services, he can understand the issue from both the student and administrative perspective.
“The first time I saw our letters [as vice chancellor], I thought, ‘Oh, my God,” he says, laughing (and quickly adding that the letters have since been updated). But, at the time, he and other administrators were unable to alter the award letters, he remembers, because the software they were using didn’t enable them to make the changes they desired.
“It can be complex on the back-end sometimes to write good letters,” Hossler says. “But I don’t think that absolves us of our responsibility.”