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Award Letters, Consumer Disclosures, the Shopping

Sheet and the College Scorecard

EASFAA Conference 2013

Boston

Eileen O’LearyAsst. VP, Student Financial ServicesStonehill College

1. THE SHOPPING SHEET2. THE COLLEGE SCORECARD3. STANDARDIZED AWARD LETTERS4. CONSUMER INFORMATION

PROBLEM IN DESPRATE NEED OF A SOLUTION?

OR

CONGRESSIONAL & ADMINISTRATION ACTIONS CREATING MORE PROBLEMS?

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Shopping Sheet

Use not (yet) mandatedVA memorandum of agreement

715 Schools have signed on18.4% of total enrollment represented

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What’s on the Shopping Sheet?

Costs in the 13-14 yearGift AidNet Costs after gift aidOptions to pay net

costs:◦ Work options◦ Loan options

Other Options◦ EFC listed◦ Other means to pay

Customized info

Graduation Rate (6 year)

Loan Default Rate◦ With national

comparison to like schools

Median Borrowing ◦ Est. monthly payment

for median borrowingRepaying your loans

◦ Link to ED websiteMore Info

◦ Contact information

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The College ScorecardComprehensive College search and comparison

website created by the Administration

http://www.whitehouse.gov/issues/education/higher-education/college-score-card

Akin to College Board, Petersons with comparison info.

Each scorecard includes five key pieces of information about a college: Costs, Graduation Rate, Loan Default Rate, Median Borrowing, and Employment Prospects.

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Net Price CalculatorRequired that each college have a NPCProminently displayed on college’s web siteEstimates gift aid and net price after gift

aid for attendance at that collegeProblems encountered:

◦ Locations of NPC’s◦ Accuracy

STUDENT CONSUMER

INFORMATION REQUIREMENTS

HTTP://WWW.NASFAA.ORG/RESEARCH/NEWS/NASFAA_RESOURCES_TO_HELP_MEMBERS_COMPLY_WITH_CONSUMER_DISCLOSURE_REQUIREMENTS.ASPX

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Award Letters/NotificationsProblems identifiedOwning the issuesUnderstanding the landscapeFacing the challengesControlling the results

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Is there a problem? “In the work I do with low-income, inner city,

first in their family seniors, I have seen some of the most inadequate award notices, many without COA details, a lack of clarity between grants and loans, and few details about renewal requirements. In my opinion, this lack of disclosure begs for regulation if the community will not self-regulate. All students need better financing information to make their enrollment decisions, especially with the level of unmet need most students are experiencing.” –Ellen Frishberg, SEED

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Responses…“I know what my school's abilities are and I know

what information my students need and how I can deliver it. The proposed standardized award letter would not be as clear as I believe ours are and would not provide the information we do to our students.” – finald-l posting

“If there are deceptive award letters out there, let the department deal with those schools directly and stop trying to continually implement "one-size-fits-all" legislation that adds undue burden on financial aid offices and doesn't ultimately make it clearer for the students.” –finaid-l posting

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My Personal Observations…

Are problems universal or outliers?

Are poor notifications more prevalent in one sector or another?

Essential information is not always financial aid related

Provide info at appropriate time

Inappropriate and inefficient if all schools have to create aggregated info

What is NASFAA’s leverage?

NACAC standards are essential to membership – should NASFAA’s be?

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NASFAA’s Response:

Task Force on Award Notification and Consumer Information

www.nasfaa.org/advocacy

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GoalsIdentify best practices for award

notifications and dissemination

Develop glossary of standard terminology Gather examples of award notifications

and consumer information disclosures that illustrate best practices, to serve as resources for other institutions

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Determine whether on-line notifications require different considerations than paper formats

Recommend ways to minimize the quantity but maximize the effectiveness of student consumer information

Make recommendation regarding the desirability of model formats and whether different models would be needed

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Critical Findings:

Well‐presented, easy‐to‐understand financial aid award notice is essential

Standardization of the content, terminology and definitions is needed

Flexibility in the formatting of the award notice would allow colleges to customize their communications to their specific audiences

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Recommendations of Task Force

Recommendation #1:

Include ten core elements on every award notification

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Core Elements of an Award Letter:

1. Cost of Attendance2. Gift Aid3. Net Cost after Gift Aid4. Self Help awards5. Assumptions used in creating award package6. Link to Resource of Total Loan Debt (Aggregator)

and Calculator from ED or other Third Party7. Link to Consumer Information Disclosures8. Link to a Public Glossary of Standard Terms &

Definitions9. Contact Information for the Financial Aid Office10. Deadlines and Next Steps

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Recommendation #2: Components of the cost of

attendance should be broken down into two, clearly labeled classifications:

Direct Costs◦ Expected charges for one year for tuition and

mandatory fees◦ Room and board (for on‐campus residents)

Indirect Costs◦ Estimated living expenses (for off‐campus residents)◦ Estimated transportation costs◦ Estimated books and supplies costs◦ Estimated miscellaneous costs

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Recommendation #3:

Students should be informed of the potential debt they may incur at a college before paying the enrollment deposit.

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Recommendation #4:

Award notifications to continuing students should provide borrowers with their cumulative loan history (federal and private if known) and the ability to calculate repayment estimates before they borrow additional loans to pay their college costs either on the college’s website or by linking to a federal or a third party site.

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Recommendation #5:

The U.S. Department of Education should mandate that all educational loans from private lenders as well as from colleges and universities be reported to one, central database.

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Recommendation #6: Each award notification sent to students

should include a link to a school‐created web resource that contains links to student consumer information, loan counseling, cumulative indebtedness, student loan default rate, repayment information, glossary of financial aid terms, federal student loan history, the College Navigator, and the school’s net price calculator. This web resource should also link to nonfederal student loan history (once this resource is available) and the College Scorecard.

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S. 3244 (112th): Understanding the True Cost of College Act of 2012◦112th Congress, 2011–2013. Text as

of May 24, 2012 (Introduced)

Senator Al Franken (D-MN)

Secretary of Education must design an award letter for mandatory use

What’s on the award letter horizon?

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S. 3244: Required Award Letter ContentStudent’s Cost of AttendanceAmount of gift aidNet cost to student after gift aidWork Study amountDL and Perkins award amountsWhere additional info can be foundBenefits of federal vs. private loansKey deadlinesCovered Academic PeriodCohort Default RateAdditional information…

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A concise summary of terms and conditions related to offered grants, loans and work study, as well as a way to provide supplementary information including longer loan repayment terms (may be achieved through links).

Additional suggestions for paying the net price at the discretion of the institution.

Private student loan disclosures (if the school recommends private loans), including availability of and student’s potential eligibility for Title IV assistance, the impact of a private loan on eligibility for other assistance, the student’s ability to select a private lender of choice, and the rights to accept or cancel loans.

For dependent students, references to private loans must include information about Expected Family Contribution (EFC) and Direct PLUS loans, and additional loan eligibility for students whose parents cannot borrow.

Also must include:

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That the financial aid award is only for one academic period and that the package may change in the future.

How non-institutional scholarships affect the student’s financial aid package.

A summary of the process for renewing Federal and institutional financial aid and a way to obtain additional information, for example by linking to supplementary information.

Additional disclosures required:

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Include a subtotal for each category of aid offered. Use standard definitions and terms, developed by the

Secretary of Education. If the institution recommends less Federal loan aid than the

Federal maximum available to the student additional information on Federal loans must be provided in an attached document or webpage.

Use standard formatting and design, as developed by the Secretary of Education, subject to consumer testing. The bill further directs the Secretary regarding fonts, order of information, and consistency between written and electronic formats.

Include an attestation that the student has assessed and read the offer form if provided in electronic format.

Include language developed by ED notifying eligible students that they may be eligible for VA education benefits and resources for more information.

An institution may offer additional information that supplements the aid offer form but is not located directly on the form.

Bill also mandates that the award letter:

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What’s an FAO to do?????

S/he who fails to participate in the process forfeits the right to complain about the results. -Eileen O’Leary

Weigh in!

Questions ?