Every year, incoming and current college students have to file a FAFSA in order to determine their potential and continued eligibility for federal financial aid. Students may also have to file institution-based financial aid applications every year, along with institution-based or outside scholarships. Offer letters are key tools used by colleges and universities to notify students of their eligibility for federal, state, and institutional financial aid. Students and families use these letters to determine what the cost of attending that particular institution will be.
Recent research such as the “Decoding the Cost of College” joint research report by New America and uAspire, and the National Association of Student Financial Aid Administrators Issue Brief on Financial Aid Award Notifications have determined that offer letters are often hard to understand, and can lead students and families to misinterpret financial aid packages. Consequently, students and families end up borrowing more loans than they should, the students decide not to attend a particular institution, or the greatest consequence is that many students do not realize the true cost of attendance, which can lead to negative outcomes like not being able to afford to finish.