Award Letters, Consumer Disclosures, the Shopping Sheet and the College Scorecard

1. Award Letters, Consumer Disclosures, the Shopping Sheet and the College Scorecard EASFAA Conference 2013 Boston Eileen O’Leary Asst. VP, Student Financial Services Stonehill College

2. PROBLEM IN DESPRATE NEED OF A SOLUTION? OR CONGRESSIONAL & ADMINISTRATION ACTIONS CREATING MORE PROBLEMS? 1. The Shopping Sheet2. The College Scorecard3. Standardized Award Letters4. Consumer Information

3. Shopping Sheet • Use not (yet) mandated • VA memorandum of agreement • 715 Schools have signed on • 18.4% of total enrollment represented

4. What’s on the Shopping Sheet? • Costs in the 13-14 year • Gift Aid • Net Costs after gift aid • Options to pay net costs: • Work options • Loan options • Other Options • EFC listed • Other means to pay • Customized info • Graduation Rate (6 year) • Loan Default Rate • With national comparison to like schools • Median Borrowing • Est. monthly payment for median borrowing • Repaying your loans • Link to ED website • More Info • Contact information

5. The College Scorecard • Comprehensive College search and comparison website created by the Administration • http://www.whitehouse.gov/issues/education/higher-education/college-score-card • Akin to College Board, Petersons with comparison info. • Each scorecard includes five key pieces of information about a college: Costs, Graduation Rate, Loan Default Rate, Median Borrowing, and Employment Prospects.

6. Net Price Calculator • Required that each college have a NPC • Prominently displayed on college’s web site • Estimates gift aid and net price after gift aid for attendance at that college • Problems encountered: • Locations of NPC’s • Accuracy

7. Student Consumer Information Requirements http://www.nasfaa.org/research/News/NASFAA_Resources_to_Help_Members_Comply_with_Consumer_Disclosure_Requirements.aspx

8. Award Letters/Notifications • Problems identified • Owning the issues • Understanding the landscape • Facing the challenges • Controlling the results

9. Is there a problem? “In the work I do with low-income, inner city, first in their family seniors, I have seen some of the most inadequate award notices, many without COA details, a lack of clarity between grants and loans, and few details about renewal requirements. In my opinion, this lack of disclosure begs for regulation if the community will not self-regulate. All students need better financing information to make their enrollment decisions, especially with the level of unmet need most students are experiencing.” –Ellen Frishberg, SEED

10. Responses… • “I know what my school's abilities are and I know what information my students need and how I can deliver it. The proposed standardized award letter would not be as clear as I believe ours are and would not provide the information we do to our students.” – finald-l posting • “If there are deceptive award letters out there, let the department deal with those schools directly and stop trying to continually implement "one-size-fits-all" legislation that adds undue burden on financial aid offices and doesn't ultimately make it clearer for the students.” –finaid-l posting

11. My Personal Observations… • Are problems universal or outliers? • Are poor notifications more prevalent in one sector or another? • Essential information is not always financial aid related • Provide info at appropriate time • Inappropriate and inefficient if all schools have to create aggregated info • What is NASFAA’s leverage? • NACAC standards are essential to membership – should NASFAA’s be?

12. NASFAA’s Response: Task Force on Award Notification and Consumer Information www.nasfaa.org/advocacy

13. Goals • Identify best practices for award notifications and dissemination • Develop glossary of standard terminology • Gather examples of award notifications and consumer information disclosures that illustrate best practices, to serve as resources for other institutions

14. Determine whether on-line notifications require different considerations than paper formats • Recommend ways to minimize the quantity but maximize the effectiveness of student consumer information • Make recommendation regarding the desirability of model formats and whether different models would be needed

15. Critical Findings: • Well‐presented, easy‐to‐understand financial aid award notice is essential • Standardization of the content, terminology and definitions is needed • Flexibility in the formatting of the award notice would allow colleges to customize their communications to their specific audiences

16. Recommendations of Task Force Recommendation #1: Include ten core elements on every award notification

17. Core Elements of an Award Letter: • Cost of Attendance • Gift Aid • Net Cost after Gift Aid • Self Help awards • Assumptions used in creating award package • Link to Resource of Total Loan Debt (Aggregator) and Calculator from ED or other Third Party • Link to Consumer Information Disclosures • Link to a Public Glossary of Standard Terms & Definitions • Contact Information for the Financial Aid Office • Deadlines and Next Steps

18. Recommendation #2: Components of the cost of attendance should be broken down into two, clearly labeled classifications: • Direct Costs • Expected charges for one year for tuition and mandatory fees • Room and board (for on‐campus residents) • Indirect Costs • Estimated living expenses (for off‐campus residents) • Estimated transportation costs • Estimated books and supplies costs • Estimated miscellaneous costs

19. Recommendation #3: Students should be informed of the potential debt they may incur at a college before paying the enrollment deposit.

20. Recommendation #4: Award notifications to continuing students should provide borrowers with their cumulative loan history (federal and private if known) and the ability to calculate repayment estimates before they borrow additional loans to pay their college costs either on the college’s website or by linking to a federal or a third party site.

21. Recommendation #5: The U.S. Department of Education should mandate that all educational loans from private lenders as well as from colleges and universities be reported to one, central database.

22. Recommendation #6: Each award notification sent to students should include a link to a school‐created web resource that contains links to student consumer information, loan counseling, cumulative indebtedness, student loan default rate, repayment information, glossary of financial aid terms, federal student loan history, the College Navigator, and the school’s net price calculator. This web resource should also link to nonfederal student loan history (once this resource is available) and the College Scorecard.

23. What’s on the award letter horizon? • S. 3244 (112th): Understanding the True Cost of College Act of 2012 • 112th Congress, 2011–2013. Text as of May 24, 2012 (Introduced) • Senator Al Franken (D-MN) • Secretary of Education must design an award letter for mandatory use

24. S. 3244: Required Award Letter Content • Student’s Cost of Attendance • Amount of gift aid • Net cost to student after gift aid • Work Study amount • DL and Perkins award amounts • Where additional info can be found • Benefits of federal vs. private loans • Key deadlines • Covered Academic Period • Cohort Default Rate • Additional information…

25. Also must include: • A concise summary of terms and conditions related to offered grants, loans and work study, as well as a way to provide supplementary information including longer loan repayment terms (may be achieved through links). • Additional suggestions for paying the net price at the discretion of the institution. • Private student loan disclosures (if the school recommends private loans), including availability of and student’s potential eligibility for Title IV assistance, the impact of a private loan on eligibility for other assistance, the student’s ability to select a private lender of choice, and the rights to accept or cancel loans. • For dependent students, references to private loans must include information about Expected Family Contribution (EFC) and Direct PLUS loans, and additional loan eligibility for students whose parents cannot borrow.

26. Additional disclosures required: • That the financial aid award is only for one academic period and that the package may change in the future. • How non-institutional scholarships affect the student’s financial aid package. • A summary of the process for renewing Federal and institutional financial aid and a way to obtain additional information, for example by linking to supplementary information.

27. Bill also mandates that the award letter: • Include a subtotal for each category of aid offered. • Use standard definitions and terms, developed by the Secretary of Education. • If the institution recommends less Federal loan aid than the Federal maximum available to the student additional information on Federal loans must be provided in an attached document or webpage. • Use standard formatting and design, as developed by the Secretary of Education, subject to consumer testing. The bill further directs the Secretary regarding fonts, order of information, and consistency between written and electronic formats. • Include an attestation that the student has assessed and read the offer form if provided in electronic format. • Include language developed by ED notifying eligible students that they may be eligible for VA education benefits and resources for more information. • An institution may offer additional information that supplements the aid offer form but is not located directly on the form.

28. What’s an FAO to do????? S/he who fails to participate in the process forfeits the right to complain about the results. -Eileen O’Leary Weigh in!

29. Questions ?