The Education Department this week issued recommendations for colleges to improve the transparency of financial aid offered to students. The department's guidance suggests college financial aid offers should:
- Avoid referring to financial aid offers, which can include loans and Federal Work-Study, as "awards."
- Include the full cost of attendance.
- List grant aid, loans and work-study separately.
- Avoid listing Parent PLUS loans with other student loans.
- Include next steps for students and families after they receive their aid offers.
Those items largely reflect the recommendations of a report last year from New America and uAspire, which found that financial aid offers from colleges used inconsistent terminology and often failed to reflect the full cost of attendance.
Lawmakers have also been paying closer attention to the transparency of college aid offers. Bipartisan legislation introduced last month by Iowa Republican senators Chuck Grassley and Joni Ernst and Senator Tina Smith, a Minnesota Democrat, would require that colleges use a standardized financial aid offer for admitted students.