Recommendations for Award Letters

The Higher Education Opportunity Act (PL 110-315) requires the Secretary of Education to publish recommendations for improving financial aid award offer forms (or award letters), including a model format for such forms, with the input of a group of stakeholders convened for this purpose. Over the past two years, we have closely reviewed existing proposals for improving award letters and identified several shared principles and goals. We also conducted our own analysis of more than 100 actual award letters from a variety of states and schools. We found considerable variation in both the quantity and quality of information provided to students and their families, and numerous challenges to making easy and meaningful comparisons. Based on this work, we offer the following recommendations.

First and foremost, all award letters should clearly and accurately answer one fundamental question: How much will it really cost me to go to this school? We call this the “bottom-line cost”. It is the amount of money that students and their families are expected to come up with — both out-of-pocket and through student loans and work-study — to cover the difference between the school’s full cost of attendance and any grants or scholarships the student receives. This crucial figure allows students and families to compare financial aid offers based on the true cost of attending each college. Specifically, we recommend that all award letters:

• Prominently display the most important and useful information, including:
  (a) total cost of attendance
  (b) total grant aid
  (c) bottom-line cost: the difference between (a) and (b)
• Group aid by type:
  (a) grants and other gift aid that does not have to be repaid
  (b) self-help, including loans and work-study
  (c) clearly distinguish federal loans from nonfederal loans
• Break down the full cost of attendance by category (as applicable to the specific student):
  (a) tuition and fees
  (b) room and board or housing and living expenses
  (c) books and supplies
  (d) transportation and miscellaneous personal expenses
• Present information in a consumer-friendly way, avoiding jargon and acronyms
• Explain deadlines and the steps students must take to complete the process

These principles are generally consistent with the legislative requirements for the model award letter format. The legislation requires that certain information be included without restricting the model to only those elements. A model format that focuses on providing key pieces of information in an accessible way has real potential to inform and improve institutional practice. Because our country has many different types of colleges serving many different types of students, an emphasis on the consistency and clarity of core content, rather than a single formal structure or layout, will raise the odds of adoption in the field.

Read the full letter we sent to the U.S. Department of Education earlier this year here.

-Matt Reed Program Director