NASFAA Tests Effectiveness and Clarity of Financial Aid Award Letters, Shopping Sheets
April 5, 2013
The National Association of Student Financial Aid Administrators (NASFAA) recently published a report, No Clear Winner: Consumer Testing of Financial Aid Award Letters, summarizing the results of focus group testing on the Department of Education's Shopping Sheet, as well as two alternative award letters. The Shopping Sheet, released last year, provides a standardized format for financial aid award letters. ED encourages, but does not require, colleges and universities to implement the format for the 2013-14 year.
The focus group - comprised of parents and students from community colleges, four-year public and private institutions, for-profit institutions, and high schools - was asked to review three award letters: ED's Shopping Sheet, an award letter developed by NASFAA's Award Notification and Consumer Information Task Force, and a hybrid of the Shopping Sheet and NASFAA's letter. Samples of all three award notices are included in the report. The focus group was asked via questionnaire to review the level of clarity of each letter, identify features they found helpful or confusing, and provide suggestions for improvement. NASFAA contracted JBL Associates, Inc. to administer the focus group tests.
The highest ranking award notice was the hybrid letter, though only 46 percent indicated that they strongly agreed or agreed with the statement "the letter is clear and easy to understand." As the report's title suggests, there was "no clear winner," as most felt overwhelmed and confused by the information included in the letters.
The questionnaire also included items to test respondents' comprehension of information provided on the three award notices. Most participants were able to retain basic information, such as total cost of attendance, from all three letters. Few, though, correctly answered questions on financial aid terminology.
Based on the results of the focus group testing, NASFAA has developed four recommendations:
Require Additional Consumer Testing. All existing consumer information requirements and disclosures should be tested and reviewed to determine their effectiveness. "In the future, no new requirement should be imposed without prior testing," asserts NASFAA. Because each of the three letters tested did not completely meet the needs of the focus group, the association again contended that there is not a "one size fits all" approach to developing award letters.
Provide a Glossary of Standardized Terminology. "Award letters from various institutions could present financial aid information in slightly various ways, but unified, consistent financial aid terminology is critical for students and parents to understand," explained NASFAA. A plain-language glossary of terms should be provided to students and families.
Provide Institutions with Flexibility to Format Core Elements. While NASFAA agrees that 10 specific core elements should be provided on every award letter, the association believes that institutions should have flexibility in formatting award notices, allowing the notice to meet the needs of different populations. The ten core elements include:
- Cost of attendance
- Gift aid
- Net costs after gift aid
- Self-help options
- Links to loan deb aggregators and calculator
- Links to consumer information disclosures
- Link to public glossary of standard terms and definitions
- Financial aid office contact information
- Deadlines and next steps
Reassess How and When Consumer Information is Needed and Useful. NASFAA believes that links to further information, rather than dense text on a document, should be provided to consumers wishing to obtain additional information. The association suggests a school-created web resource that links to other information, including disclosures, a glossary, and counseling information, for example. This could also free up space on the award letter, allowing institutions to highlight specific information that differing populations might find valuable.
- Tax Overhaul Would Impact Students, Employees, and Campus Finances
- Administrative Jobs and Benefits Costs Drive Higher Ed Labor Costs
- OMB Super Circular Makes Changes to Audit Requirements
- 2014 Higher Education Accounting Forum
April 27-29, 2014
- ON-DEMAND: Understanding the Results of the 2013 NACUBO-Commonfund Study of Endowments, and a Look to 2014 and Beyond
- ON-DEMAND: How Behavioral Changes Helped Cut Energy Usage in Half
- ON-DEMAND: Developing a Market-Informed Approach to Tuition Pricing
- ON-DEMAND: Responsibility Center Management: The Process Necessary to Complete a Successful Implementation
- ON-DEMAND: OD: Responsibility Center Management: How Innovations Have Changed the Nature of RCM
- A Guide to College and University Budgeting: Foundations for Institutional Effectiveness, 4th ed. - by Larry Goldstein
- NACUBO's Guide to Unitizing Investment Pools - by Mary S. Wheeler
- Managing and Collecting Student Accounts and Loans - by David R. Glezerman and Dennis DeSantis