News: Data, Research & Evaluation

New Report Maps Financial Aid Offer Confusion

Friday, October 25, 2019  
Posted by: Bill DeBaun, Director of Data and Evaluation
Share |

“You probably had more transparency about your breakfast cereal than your students had with their award letter,” NCAN Executive Director Kim Cook said last year at an event around financial aid award offer research. Now, a new report from CampusLogic is adding important information directly from consumers to the conversation.

In “Clear Disparity,” CampusLogic surveys 1,000 students, 750 parents, and more than 200 financial aid experts to see which terminology and dollar amounts were confusing or unclear on the first version of the U.S. Department of Education’s College Financing Plan award offer template. The survey employed heat map technology to highlight the specific problem areas that popped up across and within respondent groups. CampusLogic breaks out their results by household income, race/ethnicity, and age.

The findings lend support to what NCAN often hears from members. Specifically:

  • Almost 60% of students indicated some amount in the award offer was unclear. Almost 70% of student and almost 60% of parent respondents said some wording in the offer was unclear.
  • 94% of financial aid experts said they thought at least some wording would be unclear to students.
  • Just 21% of student respondents said there was neither unclear wording nor unclear amounts in the award offer.

Specific problem areas highlighted by the offer were the expected family contribution (EFC) and cost of attendance (COA). Among all students confused by why a number was calculated, 27% identified COA. About 30% of respondents said that EFC was unclear, and 23% of respondents said COA was. Considering award offer wording, EFC, supplementary school information (SSI), and loan options were all problem areas.

Confusion did vary according to respondent characteristics. For example, higher-income households more often identified EFC as unclear. Younger respondents were more likely to not understand terms, while older respondents were more likely to say a term was too vague or its purpose was unclear.

Given the student groups predominantly served by NCAN members, the finding that “Black, Asian, and Hispanic respondents were all more likely than white respondents to find Net Costs numbers unclear” is particularly troubling.

The report’s novel approach, specifically using heat maps, is certainly worth a look. As Congress and the U.S. Department of Education weigh steps that could clear up award offer confusion, research like this is important for understanding the way consumers actually interact with these documents.