Counterpoint: Financial Aid Transparency

Let’s get one thing straight: Financial aid award letters can and should be improved to better help students understand the costs of higher education and the aid available to them.

Although Rachel Fishman’s Views article in Monday's Inside Higher Ed would have readers believe otherwise, the National Association of Student Financial Aid Administrators (NASFAA) and the 18,000 financial aid professionals we represent are committed to ensuring that students and families have the information they need to make good decisions about planning and paying for college.

Fishman’s opinion article not only oversimplifies and misrepresents NASFAA’s position, it wastes precious time drawing battle lines over a fight that doesn’t exist, instead of moving the policy discussion forward.

Here’s the reality:

• All key stakeholders agree that improvement is needed in consumer disclosures about the cost of college. That’s why NASFAA convened a Consumer Information and Award Letter Task Force on this subject almost a year ago. In May, that task force released recommendations on how to improve award letters and consumer notification -- recommendations that align with the Department of Education’s recently released Shopping Sheet in several key areas.
• NASFAA has never opposed or discouraged use of the Shopping Sheet. Rather, we have urged schools to carefully examine the Shopping Sheet to ensure it will effectively communicate important information.  We’ve also encouraged members to – at a minimum – adopt the recommendations NASFAA issued in the spring.  In a recent letter to members, I wrote, “Regardless of whether your institution adopts the Shopping Sheet, I urge you to strongly consider standardizing specific elements of the Shopping Sheet that are in correlation with NASFAA’s recommendations, as set forth by the Task Force and adopted by the NASFAA Board of Directors.”
• NASFAA has been at the forefront of discussions about how to lead improvement of consumer disclosures. Rather than putting “entrenched institutional interests above students’ financial welfare” (as Fishman asserts) we’ve actually partnered with the Department of Education throughout this process, urging our members to offer feedback on preliminary versions of the Shopping Sheet as well as the final version. We were pleased to partner with key members of the Department of Education and White House to see aspects of our recommendations adopted in the final version.

Ignoring the existence of NASFAA’s detailed recommendations show at best a lack of research (or even cursory glance) on Fishman’s part, and at worst an intentional omission of facts in order to bolster her misguided assertions that do little to move this policy discussion forward.

The truth is that our recommendations align in many places with the goals of the Shopping Sheet. For instance, we concur with mandating the standardization of common terminology to avoid confusion and enhance comparability. We also recommend that self-help aid and student loans be clearly delineated from grants and scholarships. In fact, NASFAA’s recommendations go further than the shopping sheet, advocating for a one-stop online location where students can be shown all of their student loan indebtedness, both federal and private.

However, we do remain cautious about fully endorsing the Shopping Sheet because it hasn’t been consumer-tested against other models, including online and electronic models currently utilized successfully by leading institutions of higher education.  Schools are already required to provide an overwhelming number of disclosures to students and parents. Without consumer testing, no one can assert that the Shopping Sheet is the best way to convey financial aid award information to all types of students. To ensure the Shopping Sheet is based on rigorous research rather than anecdote, NASFAA is planning a consumer test, to be conducted through an independent third-party evaluator.

In the absence of such empirical data, NASFAA encourages financial aid offices to “to carefully review the Shopping Sheet before adopting it to ensure it will effectively communicate this critical information to the students and families they serve.”

This statement of caution should not be misrepresented as opposition. NASFAA does not oppose the Shopping Sheet, but we do wish to circumvent unintended negative consequences, avoid additional confusion, and preserve the ability of schools to deliver information in ways that they have found best serve their particular populations.

Fishman states that “the Shopping Sheet may need to be altered in some circumstances.” We agree. Unfortunately, once a school agrees to use the Shopping Sheet in its current form, it cannot be altered to meet the unique needs of diverse higher education institutions -- and this inflexibility is one of NASFAA’s primary concerns.

For instance, some campuses send a different award letter to returning students than to incoming students. While the Shopping Sheet is designed to inform first-time or prospective students, the vast majority of college students are returning students.

Appropriate consumer disclosures that actually help students and families cannot be developed in a vacuum. Financial aid administrators are a key part of the ongoing dialogue. We agree that change is needed and some level of standardization is warranted, but this process must be deliberative and based on quantifiable data about what works for students and families. Anything less is a disservice to those we are trying to help.