After the excitement of receiving an acceptance letter, there’s a second piece of mail that awaits students and their families: the financial aid award letter.
Financial aid letters get less fanfare, and yet they are a determining factor in college choice; in fact, for many students and families, financial aid offers are the determining factor. But understanding which institution has the best offer is often difficult to determine. There are no standardized guidelines for formatting financial aid letters or clearly defining the different types of aid.
The Cooke Foundation sponsored a new analysis of over 11,000 award letters from 913 unique intuitions for a report authored by New America and uAspire. The researchers found that these letters vary tremendously in the way that they present data to students – including using 136 different terms for listing the unsubsidized federal student loan. Adding additional confusion, 24 of those terms did not even include the word “loan.”
While institutional financial aid is generous, the average student with financial need is asked to cover 34 percent of the cost of attendance (an average of nearly $12,000) on their own through work earnings, private or federal parent loans, savings, or other sources. And unfortunately for students hoping to compare prices, only 40 percent of the letters included a bottom-line calculation of the student’s contribution after all grant aid was applied. Ensuring that these financial aid gaps are clearly communicated is essential for students to figure out whether they can afford college.