<p>Are you flummoxed by a confusing financial aid letter? Or do you want to help other families better recognize potential college debt (before it eats them alive)? </p>
<p>Note that The Chronicle/ProPublica initiative is seeking actual financial aid letters ... not only from the college that you or your child attends but even from schools you turned down. </p>
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[quote]
College financial-aid officers have issued recommendations to make award letters to students less confusing, as U.S. Senator Al Franken prepares to introduce a bill to standardize the correspondence ... </p>
<p>Franken, a Democratic from Minnesota, plans to unveil a bill in the next few weeks that would require colleges to use a universal award letter to ensure that students can compare packages among schools, Alexandra Fetissoff, a spokeswoman for the senator, said today in an interview. </p>
<pre><code> The Understanding the True Cost of College Act would help families learn the differences between grant aid and student loans, Franken said in an April 30 statement.
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<p>Dare I hope that there may soon be more light shed upon the murky finaid maze?</p>
<p>This is probably long overdue, but will not be a cure all. </p>
<p>For over 30 years Banks have had to quote lending costs using “Annual Percentage Rate” A.P.R. formulas with standardized Fed disclosures. Likewise, for the past 20+ years “Annual Percentage Yield” A.P.Y. disclosures have been required for savings accounts and CD’s. However, even with all of these disclosures, people make inappropriate financial decisions every day.</p>
<p>But, given the Student Loan “Bubble”, Congress has to try and ensure that consumers get “uniform” information. They can’t stop someone from “selling their soul to devil” for a “prestige” school, but they can make sure you were warned.</p>
<p>It may help a few people, but judging from posts I read here on CC, it’s only a small piece of the problem. By the time the award letter comes, it is far too late … understanding the process well before the award letter arrives is key to the true problem being fixed.</p>
<p>I agree with kelsmom. A lot of the confusion comes long before the letters do. One reason for this is that many colleges do such a lousy job of publicizing merit awards and of giving high school students and their parents a clear and early sense of who is in the running and for how much.</p>
<p>Even though admission folks will tell you that they can’t be sure who will qualify for merit aid until they see the entire applicant pool (which is true), they can certainly provide a much better ballpark sense than they’re doing so that families can keep potential merit bucks in mind when finalizing college lists.</p>
<p>Some of the new Net Price Calculators have attempted to factor in potential merit aid, but most of those are still a long way off from providing a true read on likely costs, especially where merit money is in the mix.</p>
<p>The most confusing part of one of my son’s financial aid offers was a large line item with a confusing name. Once it was researched, it turned out that amount was simply a monthly payment plan.</p>
<p>As Kelsmom says there is a need for better fin aid information and understanding earlier in the process. The NPC has the potential to be a valuable tool, but we really don’t know how accurate these are for any particular school. I would much rather see a comparison of actual offers to NPC estimates. At this point I’d settle for knowing whether the estimates are generally too high, too low, or about right. Early on I am only interested in knowing whether weak fin aid would prevent my S/D from applying or if I can consider the school a financial safety. When the fin aid package comes it is usually too late to apply elsewhere.</p>
<p>I have been through the process twice and am starting into it for a third time with my rising senior. I don’t yet know how much confidence to place in the calculators. In addition, the presentation of costs and aid estimates does not lend itself to comparisons between estimates, even between estimates processed through collegeboard. At present the only way to compare is to scrutinize the numbers, and that requires experience. What I try to end up with is a 4-year projection of costs and fin aid. It ain’t easy.</p>
<p>I think it is unrealistic to expect a NPC to give a reasonable read on merit aid at schools that look at candidates holistically when doling out merit. Those that base it strictly or mostly on stats should be able to come fairly close.</p>
<p>But what we found this year was a number of schools that don’t even distinguish between merit and need-based, but just lump it all together in an “institutional” category. That comes close to being useless - especially when the NPC doesn’t even ask for stats. (Of course, I’m convinced that at some schools, a portion of “merit aid” is really just “automatic discount,” so why would they need stats?)</p>
<p>Here’s what I think the minimum reporting standard should be - aid broken down into the following categories:</p>
<p>Need-based aid
Government grants
Institutional grants
Work-study
Subsidized loans
Unsubsidized loans</p>
<p>Merit aid
Based on your statistics (along with the GPA needed to maintain)
Range of additional aid that may be awarded after evaluation of your application</p>
<p>I’d like the letters to explicitly state that outside scholarships will or will not reduce the family’s expected contribution. (Mostly will not.)</p>
<p>I’d also like to see something like, “Average student debt for graduates who took federally insured or college-granted loans was $24,242. This does not include any debt incurred by families in order to meet their family contribution.”</p>
<p>I wonder if they’d accept letters from past years. I’d like to send them the letter from Tufts University I received last year stating that despite the fact that my merit scholarship was only $3,000, I’d still be able to graduate “debt-free” with a $53,000 sticker price. Every other school I’d been accepted to offered $40,000 or less, and even if my family had been able to afford Tufts, the arrogance conveyed in that letter drastically decreased my desire to attend.</p>
<p>FYI - at the colleges I dealt with, any increased state government aid would decrease institutional aid, but outside scholarships could be used to decrease loans and work study. </p>
<p>If you were one of the rare students who received an enormous amount of outside scholarships that covered all EFC, loans and work study, then they could decrease aid from the college (which is understandable). </p>
<p>One college specifically said that if you didn’t apply for state aid on time, they would not make up the difference (which is understandable).</p>
<p>Bandgeek24601,
We’re definitely accepting letters from past years, including from schools you turned down! The letter you mention sounds very interesting – if you have it, please do email it to us at education <at> propublica.org. We would greatly appreciate it.
–Marian Wang, ProPublica</at></p>
<p>Do they just want “bad” letters? I have an example of a very good letter … although I suspect many families don’t bother reading it, as it is pretty long. It’s from Furman U … very, very detailed info. I think it’s excellent.</p>