Debating Award Letters at the 2011 FSA Conference

Award letters have been a source of debate for over 20 years and continued to be at the 2011 Federal Student Aid (FSA) conference in December.  U.S. Department of Education officials held an award letter session to solicit feedback from the financial aid community as part of their effort to develop a model award letter for higher education institutions to use.

If the session was any indication, it will be very difficult to generate consensus on a standardized award letter. Department officials used the model award letter it developed with the Consumer Financial Protection Bureau (CFPB) to start the conversation at the session. The biggest weakness of this model, according to student aid professionals at the session, is that the CFPB model cannot meet all the unique needs of a student population that continues to grow in diversity. Session attendees stressed the need for flexibility to tailor award letters to meet the unique needs of the students they serve. 

A provision in the Higher Education Opportunity Act of 2008 (HEOA) requires the Department to develop recommendations to improve award letters and a model award letter based on those recommendations. This isn't the first time Congress delved into award letter issues--in 1986 they mandated a single aid offer, but it was ruled "unworkable" after public comments came back in 1988. Subsequently, the 1992 reauthorization of the Higher Education Act removed award letter requirements.

The rapid increase in college costs, record numbers of students enrolling in higher education, and growing student loan debt has policymakers focusing on award letters again. The Department is working with CFPB to make it easier for students and families to understand the out-of-pocket costs for college and compare financial aid packages offered by various institutions. 

To help this effort, NASFAA formed a task force on award notification and consumer information. The task force is currently seeking input from financial aid offices through a 15-minute survey. The task force will use input from this survey to guide their discussions and recommendations.

You can also provide feedback to the Department and CFPB through their Know Before You Owe website.


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