Decoding the Financial Aid Letter

I guarantee that more than one parent will be spending the next couple of weeks puzzling over financial aid award letters from colleges to which their child was accepted. And it won’t be easy.

Intentional or not, financial aid letters are confusing, poorly written, and sometimes just plain deceptive.

A year ago, I wrote a column introducing financial aid “decoders” posted by both US News & World Report (USNWR) and FinancialAidLetter.com. Using real letters from colleges in different regions of the country, experts parsed out meaning and graded each for clarity and content.

Responding to a financial aid letter from Northeastern University, USNWR graders noted that total costs were underestimated and no indication was given as to whether or not awards were “renewable.” Similarly, the letter from Allegheny College underestimated total costs and provided confusing information relative to the need to repay loans while in school.

Closer to home, American University was also called on the carpet for underestimating total Cost of Attendance by about $1600. On the plus side, readers praised American for informing students that they have the option of declining an offered loan.

In all fairness, the letters used are several years old. They are nonetheless illustrative of the kinds of problems families are bound to encounter when trying to compare offers. And even the experts are confused.

In an interview with USNWR’s Zach Miners, noted financial aid guru Mark Kantrowitz suggests that many financial aid award letters are not entirely upfront about costs and “apples-to-apples” comparisons among institutions may be complicated by omissions in information provided.

“Schools might not be listing the same set of costs,” Kantrowitz suggested. “Some might just be listing tuition and fees; others might be listing the total cost of attendance, which includes room and board, books, transportation costs, and miscellaneous expenses.”

You’d think there would be some uniformity here or at least the oversight organizations involved in the allocation and administration of financial aid might demand it.

It would be nice to believe that financial aid administrators operate in their own little worlds of dollars and cents, and they don’t intentionally obfuscate the value of awards.

Luckily, most are willing to answer questions and if you have some, don’t hesitate to call or email a college’s financial aid office. It’s better to get the explanations now and not be surprised later.