Financial aid offer letters are supposed to tell families how much they will have to pay for college, which can be the deciding factor in determining where — or even if — students will go to college. But too often, letters omit important information and use language that makes it difficult to determine the final cost.
Some student advocates say the letters are downright misleading. Others think the lack of consistent language is confusing; each college has its own format with its own vocabulary. So it can be difficult to answer the crucial question: how much will this cost me?
For more than a decade, college access groups have been pushing for a bill in Congress that would require all colleges to use the same standard, clearly labeled form — much like nutrition labels on foods — so families can accurately compare offerings. But academic associations and others worked to block it.
Below are several offer letters received last year, with names redacted to protect student privacy.
Some financial aid offer letters don’t include the most important information: how much a student will have to pay.
This letter shows grants and loans…
…but what is the cost for the student?
Nowhere do these letters provide information on the cost of college.
Some letters list multiple costs. See if you can determine how much this student will owe in total.
This letter includes three different numbers for expenses.
Let’s zoom in…
Here we have the total estimated amount owed at $48,816…
But in another part of the letter, this amount increases to $38,316…
In fact, the amount the student will have to pay is in this box, in much smaller font, and titled Estimated Net Price: it’s $43,864.
Advocates say letters should not list grants and loans together because applicants often don’t understand the difference.
Loans will need to be repaid and will bear interest. This is different from grants, which actually reduce tuition costs.
Even more confusing, not all loans are the same.
Parent PLUS loans are included here, even if the family is not eligible. Additionally, interest on these loans accrues while the student is in school, which is not mentioned.
There’s nothing here to indicate that repaying $19,072 in Parent PLUS loans would exceed $29,000 with a standard 10-year repayment plan – and that’s just for one year of college.
This letter does not indicate which portion of the $33,175 in loans is a private loan or a Parent PLUS loan, but combines them as a lump sum. And nowhere does it say that either loan would likely have a higher interest rate than a federal student loan.
Many colleges list “work study” as if it is a guaranteed income, but this may depend on the student’s ability to find gainful employment according to the college’s estimates.
In this case, the offer letter states that the student will earn $3,180, but if they don’t find a job, they will still have to find that amount.
This lists federal work-study but does not explain that employment is not guaranteed.
When colleges use different terms and formats to present the final cost to students, it is difficult to compare them.
This one uses the term “remaining direct and indirect costs” to refer to the final amount a family owes, but other colleges use these terms to mean different things.
This uses the “estimated net price” for the final cost…
…while this one speaks of “estimated remaining costs”…
…and here we have “costs after grants and loans”.
Finally, this letter uses both “direct costs” and “net costs” – and even ends with a negative cost.
With colleges using so many different formats and terms, it’s no surprise that families are confused. You can understand why some people want colleges to use a standardized form. What do you think?
The post How much will this university cost you? Good luck figuring it out appeared first in the Hechinger Report.
