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When you buy a house, you know the price and your monthly payment. The same with a car.</p>
<p>But when it comes to a college education, students often don't have a clear idea of what they'll end up paying or whether one school is offering a better aid package than another.</p>
<p>That's because there is no uniformity to financial aid award letters. Colleges use different terms and formats, making comparisons difficult. Schools don't always make a distinction between grants and loans or calculate the cost of college the same way. And letters often contain acronyms with no explanation.</p>
<p>. . .</p>
<p>With student loan debt exceeding $1 trillion and families increasingly questioning whether a college education is worth it, colleges should be embracing making financial aid award letters clear and uniform. Transparency may not solve the student debt problem, but it can help students and parents make better-informed decisions.
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<p>The</a> federal government makes a push to make financial aid award letters clear and uniform - baltimoresun.com</p>
<p>First, I’d like to start off and say that every financial aid package I received was clear enough that if I had any trouble I could do what any reasonable person would: research it on the internet, ASK the person who is giving it or use logic. I guess it is very possible that there are some universities who aren’t as transparent as the one I applied to, but it seems every University has a financial aid department that is willing to help and a financial aid website that has all the information. </p>
<p>Second, I don’t think this would help a bit with the debt crisis even if every student understood the costs. I would hedge a bet to say that 99% of the people in this “student debt crisis” understood they were taking out loans but they didn’t understand the repercussions of their choices. This is their own fault, in this situation. Not the college, not the government, not the state department…</p>
<p>What really needs to change is the attitude of people to how college works. It is an entitlement nor free. Maybe one day…</p>
<p>I agree. I’ve not seen any ‘confusing’ finaid letters. I do “appreciate” the letters that do NOT include the loans, student or parent, in the top level summary because it makes it quicker to see the bottom line, but as far as them being confusing…not so much. It’s low hanging fruit though to make finaid award letters ‘uniform’ but I wish the government would spend more time keeping the interest rate on the loans as low as possible for the students and make federal work/study dollars great for the colleges and accessible for more students. My oldest son’s college always ran out of work/study dollars and could not award W/S to all students even those that had their need gapped.</p>
<p>Maybe I am showing my ignorance about how loans/interest rates work… but the federal reserve set interest rates at 0.25%. It seems the federal government of all people should be able to get these extremely loan interests rates on their money, so why are they even thinking of doubling the interest rates to 6.8% when they could probably sustain the federal loan program if the interest rate were 1%? Seems ridiculous to me.</p>
<p>Lowest rates are often for intitutional borrowing- a few gazillion borrowed overnight or short term, for all those behind-the-scenes business purposes. Or, in conjunction with some other program or funding commitment. The govt is losing money, not making it. </p>
<p>When you’re talking 25k for Staffords or more that some familes borrow, the heart of the problem is the principal. That’s, imo, where the problem *starts.<a href=“I%20know%20interest%20slogs%20you%20with%20more%20debt,%20etc.”>/i</a> </p>
<p>When you read a FA offer, you should look at the gift money, subtract it from total costs- and there’s your nut. If you take student or parent Direct loans, you can get info from the originator re: when payment begins, what the monthly payments will be, multiply it by the number of months (usually 10 years,) to see the total cost to you. And, there you have it. (In our disclosures, they lay it out for us.) Most people don’t do that, don’t consider that. Not even when people on CC put their noses in it. Is that the govt’s fault? I do fault schools that willfully make it confusing, but that’s not different than some car dealer or mortgage lender. The borrower needs to do his or her part, to understand.</p>
<p>When I read, Schools don’t always make a distinction between grants and loans, I someties want to shout, we’re talking college, here- why is it hard to understand the difference between a grant and a loan?</p>
<p>Turtlerock…</p>
<p>where will you be attending school this fall and how was your award? is your veteran’s benefits covering enough?</p>
<p>I think it is asking a lot of a kid – particularly a kid whose parents are not college-educated – to understand that a student aid letter that seems to show the full COA being met isn’t necessarily feasible if it includes a lot of debt. We see plenty of questions on CC from kids trying to understand their awards, many of whom are Pell eligible. So from a practical standpoint, simplifying and standardizing financial aid award letters is likely to be very, very helpful.</p>
<p>^ agree.</p>
<p>Not everyone - I would suggest perhaps, not even the majority - is as sophisticated about college financial aid matters as the CC crowd. I have an MBA so am not at sea when it comes to understanding financial stuff, but had I not had the benefit of exposure to the discussions here, I would have been very confused about exactly what the FA packages we received meant. One in particular, I had to contact the school to determine whether a grant was merit-based or need-based (important in our case, because our need is likely to decline significantly in future years) - the FA package just called it a “<name of=”" school=""> grant" without any indication as to the basis. Without the background I had from reading this forum for the past year, I would not have been savvy enough to even know I needed to ask the question.</name></p>
<p>My personal issue with award letters is the COA, especially for commuter students. Students and parents do not understand COA, even though it is spelled out for them. I had so many families upset about the COA of almost $18k for a commuter … it included budget for living and for transportation, so it was much higher than the direct costs. Families still thought that was what they would be paying the school. I would prefer to see COA broken into school-specific estimate (tuition, fees, and room/board if it’s an on-campus budget) and student-specific estimate (books, personal, travel, off-campus housing expenses, miscellaneous). That way, even those who ignore the fine print would have a better chance of understanding.</p>
<p>I also dislike parent PLUS in the body of the award letter. Yes, it is a federal aid option, but it is not a guarantee … and it is in the amount of gap + EFC, so it is quite high. I would prefer to see aid as gift aid, student loans, parent loan option (for those who qualify).</p>
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Hi mom2. I decided to attend a CCC and work towards xfering to a UC or CSU for accounting or economics. Long story short, I found this would give me and the fam the most stability (my manager is fully compliant on my school schedule so I get to still work, wife gets to keep her paralegal job, we get to stay together, etc etc). Bama was hard to put down, but I’m still keeping it in mind for xfer in case I have the opportunity again. I’ve been looking into the CCC transfer process so much recently that I have all kinds of spreadsheets and info collected detailing a strong path to be out of CC in the minimal amount of time to finish what I need to do - and of course it’s all free with the P911 GIBill.</p>
<p>I also turned down University of San Francisco and American University (D.C.) – they would have been expensive anyway (not as generous with Yellow Ribbon as Bama).</p>
<p>Thanks for asking!</p>
<p>Best wishes for you and your wife (and your MIL)!</p>