College financial aid letters leave students, parents confused

A recent article from the Hechinger Report addresses a problem many of our clients face: confusing financial aid award letters from colleges.

Full of technical jargon, abbreviations and often misleading information, many letters leave families unsure of how much college will actually cost, which makes it difficult to compare letters from different schools.

Financial aid ‘awards’ mislead students

As student Marquell Moore tells the Hechinger Report,

They’ll tell you they’re going to give you all this money, but it turns out to be a loan.

They’ll tell you the award and they’ll let you know the tuition, but not the activities fees, travel, books — how much you need to live.

They’ll include work-study in their financial aid awards, but they don’t tell you you’re not guaranteed a job.

And financial aid offices are often no help, says Dan Mendelsohn, director of postsecondary programs at uAspire, a college counseling organization.

Instead of making costs clear to families and helping the family evaluate whether they’re making a smart financial choice, the financial aid office usually tries to find ways to get the student to attend the college at all costs, he says.

Financial aid offices are there to make sure the student finds the money to pay the school.

That’s the wrong incentive. They should help the student understand whether or not they can afford to go there.

Making college costs more transparent

There are some regulators and politicians who are trying to make the financial aid process more transparent by forcing colleges to be more upfront about costs in their financial aid award letters to students.

U.S. Senator Al Franken, D-Minnesota, introduced a bill in Congress two years ago to create a standardized letter used by all colleges to make it easier for students to compare awards. Unfortunately, the bill stalled and has yet to be passed.

We believe a standardized letter for all colleges would be a step in the right direction in making college costs more easily understood. But colleges also have to do their jobs to be more transparent about their financial aid packages, particularly when these include student loans.

For one thing, calling student loans part of an “award” is a stretch.

High school seniors usually don’t understand the impact student debt will have on their lives or how quickly interest can add up. They don’t realize that this “award” could cost them thousands of dollars extra in the future.

Help comparing financial aid letters

Even venture capitalists, PhDs and financial executives had trouble deciphering a financial aid letter that uAspire’s CEO put in front of them. It’s confusing for any parent or student–particularly those who are the first in their family to go through the college process.

That’s why we work with students and families to break down the exact costs of college, help them understand their financial aid awards and evaluate whether or not a college offers a smart return on their investment.

If you’re interested in learning how we can help guide your family through the financial aid process and figure out how to pay for college, give us a call toll-free at 1-888-234-3907 or contact us using this form and we’ll get back to you ASAP.