(Bloomberg News) College financial-aid officers have issued recommendations to make award letters to students less confusing, as U.S. Senator Al Franken prepares to introduce a bill to standardize the correspondence.
The National Association of Student Financial Aid Administrators issued a report today to "communicate its position" to Congress and other stakeholders, Justin Draeger, president of the trade group, said in an interview.
The first steps to financial aid and borrowing for college are the award letters, which aren't always clear because schools often lump their own scholarships together with federal grants. Unlike with mortgages, there is no federal requirement to disclose interest rates or total payments on loans.
"Some award letters are confusing," said Draeger, whose organization is based in Washington. "We can address all of these concerns without a mandate, which becomes very inflexible. Our purpose is to try to avoid an overly prescriptive mandate that doesn't meet the needs of the majority of students."
Franken, a Democratic from Minnesota, plans to unveil a bill in the next few weeks that would require colleges to use a universal award letter to ensure that students can compare packages among schools, Alexandra Fetissoff, a spokeswoman for the senator, said today in an interview.
The "Understanding the True Cost of College Act" would help families learn the differences between grant aid and student loans, Franken said in an April 30 statement.
The administrators' group made six suggestions to improve the letters, including adding the potential debt students may incur, total cost to attend and net costs after scholarship aid, according to the report. A task force has been working on the guidelines since November, Draeger said.
Last month, when Bloomberg News reported on how the aid letters confuse families, the organization said it opposed a standardized letter, a position it still holds. The group said it prefers to give colleges the flexibility to design their own correspondence.