Colleges and universities are receiving a final version of the “financial aid shopping sheet” designed by the Obama administration to provide students with standard, easy-to-understand information about their financial aid award and obligations.
The model letter is the culmination of an administration effort to get colleges to standardize award letters so that they provide clear information on grants, loans and other available aid to students along with the student’s total net cost of attendance. The Education Department and Consumer Finance Protection Bureau jointly unveiled the model after months of collaborating on the project.
“We are standing up for a simple and sensible concept: students should know before they owe,” said Richard Cordray, the bureau director.
Cordray said the letter is designed to minimize confusion so that students and their families understand their costs and risks.
“Too often students receive financial aid award letters that are laden with jargon, use inconsistent terms and calculations, and make it unnecessarily difficult to compare different financial aid awards side-by-side,” he said.
Since opening for business in 2011, the consumer bureau has heard from “thousands of student loan borrowers who say that they simply did not understand what they signed up for,” he said. In some cases, students took out private student loans when they still had not exhausted all of their eligibility for subsidized federal student loans.
“All too often, borrowers got in way over their heads.”
