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Study says financial aid letters cause confusion at some schools

Confused by how much financial aid you are actually receiving? Not sure exactly how much you owe your college?

You’re not alone.

NewAmerica and uAspire, a nonprofit group that advises students on the financial aid process, has released a report saying that many colleges use language and missing information to paint an incomplete picture of how much students actually owe.

In the study, called “Decoding the Cost of College,” the group gathered financial aid award letters from 900 schools and 36 percent of those never showed a total amount due.  In a summary of the report, the group said “award letters lack consistency and transparency.”

The study did not indicate which 900 schools were chosen for the study.

The group listed these key findings:

  • Confusing Jargon and Terminology: Of the 455 colleges that offered an unsubsidized student loan, we found 136 unique terms for that loan, including 24 that did not include the word “loan.”
  • Omission of the Complete Cost: Of our 515 letters, more than one-third did not include any cost information with which to contextualize the financial aid offered.
  • Failure to Differentiate Types of Aid: Seventy percent of letters grouped all aid together and provided no definitions to indicate to students how grants and scholarships, loans, and work-study all differ.
  • Misleading Packaging of Parent PLUS Loans: Nearly 15 percent of letters included a PLUS loan as an “award,” making the financial aid package appear far more generous than it really was.
  • Vague Definitions and Poor Placement of Work-Study: Of institutions that offered work-study, 70 percent provided no explanation of work-study and how it differs from other types of aid.
  • Inconsistent Bottom Line Calculations: In our sample, only 40 percent calculated what students would need to pay, and those 194 institutions had 23 different ways of calculating remaining costs.
  • No Clear Next Steps: Only about half of letters provided information about what to do to accept or decline awards, and those that did had inconsistent policies.


Bottom line, if you don’t understand your financial aid award letter, ask questions, early in the process.

To learn more about the study and read the entire document, visit

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