Students and their families across the country are currently making big decisions about where to go to college. But as many high school seniors face a May 1 deadline to decide, families are struggling to understand college financial aid letters, which can be murky and confusing.
Yesterday, Bloomberg News reported that many families are receiving confusing financial aid letters that lump in student loans with true financial “aid” such as grants and scholarships. The format for financial aid letters varies by school, making them difficult to compare, and some students have little more than a month to decide. Loans and grants offered by the federal government are lumped together with the school’s scholarships, and the statements often don’t include information on interest rates. Some letters may even list “suggested” financial aid options like risky and expensive private loans, which have fewer protections than federal student loans.
As tuition costs continue to skyrocket, it’s crucial that students and families can comparison shop before committing to a particular college – and its financial aid plan.
This month, the Consumer Financial Protection Bureau is introducing a new website that helps students compare financial aid options at different schools. To test the site and offer comments, click here.