Choosing a college is a big financial decision. And in recent months the Consumer Financial Protection Bureau and even President Obama have sought to ensure that students and their families make that choice as well-informed consumers.
The National Association of Student Financial Aid Administrators, known as Nasfaa, has now released a new set of suggestions for improving financial-aid award letters, which colleges send to admitted and returning students to inform them of the grants, scholarships, and loans they are eligible for.
Consumer advocates have long complained that the award letters are confusing and difficult to compare across institutions. Mr. Obama’s college-affordability proposals, released in January, include requiring colleges to use a “financial-aid shopping sheet.”
While Nasfaa agrees that the letters should be improved, the group has opposed standardization, saying that colleges should be free to decide how best to present information to their own students.
In a report on the new suggestions, the group lists 10 elements it says should appear in every award letter, including a breakdown of the cost of attendance and the college’s net cost after grant aid is subtracted.
The report, which is based on work done by a panel Nasfaa brought together this past winter, makes several additional recommendations.
It suggests that colleges inform enrolled students of their cumulative loan history and provide a way for them to estimate their repayment costs before they borrow more. And it recommends that the Education Department require all educational loans—including private loans and loans offered by the colleges themselves—to be reported to a central database.