No Clear Winner: Consumer Testing of Financial Aid Award Letters

NASFAA // No Clear Winner: Consumer Testing of Financial Aid Award Letters

No Clear WiNNer: CoNsumer

TesTiNg of fiNaNCial aid

aWard leTTers

CoNduCTed by Jbl assoCiaTes, iNC. oN behalf of

The NaTioNal assoCiaTioN of sTudeNT fiNaNCial

aid admiNisTraTors (Nasfaa) WashiNgToN, dC

No Clear Winner: Consumer Testing of Financial Aid Award Letters // NASFAA

Executive Summary ..............................................................................................................................................3

Foreword by NASFAA ..........................................................................................................................................4

Background .......................................................................................................................................................... 6

Rising Costs of College .................................................................................................................................6

Financial Aid Reform ..................................................................................................................................... 6

Financial Aid Transparency ............................................................................................................................6

Development of Standardized Award Letters ............................................................................................... 6

Need for This Study.......................................................................................................................................7

Findings ................................................................................................................................................................8

Overall Impressions of Letters .......................................................................................................................8

Letter Ratings ................................................................................................................................................8

Focus Group Results....................................................................................................................................10

Letter A – U.S. Department of Education Shopping Sheet..................................................................10

Letter B – NASFAA Award Notication and Consumer Information Task Force Letter ......................11

Letter C – NASFAA Hybrid of the Shopping Sheet and Task Force Recommendations .....................11

Comprehension Questions ..........................................................................................................................12

Financial Aid Terms .....................................................................................................................................16

No Clear Winner ..........................................................................................................................................18

Bottom Line .......................................................................................................................................... 18

Personal Contact ..................................................................................................................................18

Other Institutional Information .............................................................................................................18

Additional Financial Information .......................................................................................................... 19

Formatting ............................................................................................................................................ 19

Conclusions ........................................................................................................................................................ 19

Appendix A: Methodology ................................................................................................................................ 20

Appendix B: Award Letter Mockups .................................................................................................................. 22

Appendix C: Sample Questionnaire .................................................................................................................34

Appendix D: Focus Group Protocol ................................................................................................................... 36

Appendix E: References ..................................................................................................................................... 39

Table of Contents

NASFAA // No Clear Winner: Consumer Testing of Financial Aid Award Letters

In 2012, the National Association of Student Financial Aid Administrators (NASFAA) contracted JBL Associates, Inc.

(JBLA), an independent research rm, to consumer test the U.S. Department of Education’s (ED) Shopping Sheet

and two NASFAA-designed alternative nancial aid award letters among consumers through focus groups and a

questionnaire. NASFAA recognized that a plethora of consumer information is now available for prospective and

current students and parents, yet this information has not been tested in any systematic way among consumers to

determine its effectiveness. NASFAA therefore sought to test three solutions with real consumers.

JBLA tested for participants’ comprehension levels of nancial aid concepts and content as presented in each letter,

and sought participant feedback and opinions regarding:

• The level of clarity in each letter;

• Features they either found helpful or confusing; and

• Suggestions for improvement

JBLA conducted focus groups in three geographically diverse locations with students and parents at the high school

level, and in colleges across all institution types (community college, four-year public, four-year private nonprot, and

for-prot). Details of the study’s ndings and recommendations for next steps are included in this report.

Overall, when asked for their opinions of the letters, students and parents alike felt overwhelmed and confused by

the information presented. Three letters were tested:

• Letter A was the U.S. Department of Education’s Shopping Sheet.

• Letter B was an award letter developed based on the recommendations from the NASFAA Award Notication and

Consumer Information Task Force.

• Letter C was a NASFAA-designed hybrid of the Shopping Sheet and NASFAA Task Force letters.

Of the three letters, students and parents across institution types seemed to prefer the hybrid option, or Letter C,

as the clearest and easiest to comprehend. Nearly half (46%) of respondents selected Letter C as their preference

among the three letters. While not an overwhelming majority, focus group participants generally seemed to feel that

the hybrid letter offered a good balance between useful numbers, text, and visual formatting.

When tested for level of comprehension on nancial aid concepts, the majority of respondents were able to decipher

basic information such as the total cost of attendance on all three letters (89%, 77%, and 76% on Letters A, B, and

C, respectively), but relatively few were able to correctly respond to questions about nancial aid terminology, such

as direct and indirect costs, or subsidized and unsubsidized loans. Students and parents do not seem as concerned

about understanding nancial aid terminology as they are about the “bottom line”: “How much is this going to cost

me?” in simple, layman’s terms is what consumers repeatedly cited as the contents of an ideal letter.

Focus group participants offered specic suggestions for components they would like to see included in a letter,

and they felt that seemingly trivial formatting and style matters actually make a signicant difference in clarity and

comprehension. The study showed that it may be difcult to standardize one letter to meet the different needs of

students based on their characteristics and the type of institution they are attending. Students at community colleges

and for-prot institutions, for example, are not typically concerned with many of the indirect costs, such as housing,

that concern traditional students attending four-year private nonprot institutions. Today’s growing demographics

of independent (47% of undergraduate students), low-income (35%), and rst-generation students (62%) may each

have their own unique set of needs in a nancial aid award letter (United States Department of Education, 2008).

Most of these students are often at a disadvantage because they do not have access to the informational and nancial

resources available to more afuent families, which can help in interpreting complicated nancial information. In

conclusion, we believe perhaps even more important than the award letter is the nancial aid counseling and human

communication that accompanies the letter or is available from other sources once the letter is received, such as

high school guidance counselors, nancial aid administrators, or nonprot groups that assist low-income and rst-

generation students.

JBL Associates, March 2013

Executive Summary

No Clear Winner: Consumer Testing of Financial Aid Award Letters // NASFAA

In the past couple of years, NASFAA has monitored and participated in discussions with policymakers exploring the pros

and cons of standardizing nancial aid award letters. NASFAA agrees that nancial aid information should be presented

to all students and families accurately, clearly, and concisely; however, anecdotal information and consumer research now

indicate that one standard award letter cannot address the diverse population of students that attend our 3,000 Title

IV-participating member institutions.

NASFAA has taken several steps to investigate the concept of improving award letters.

November 2011: The NASFAA Board of Directors commissioned the NASFAA Award Notication and Consumer

Information Task Force, appointing 11 long-serving nancial aid directors representing various sectors of higher education.

May 2012: The Task Force released recommendations to improve award letters, by standardizing certain terms and

identifying common elements that should appear in an award letter.

September 2012: NASFAA surveyed its members to nd that two-thirds of the respondents had not committed to use

the Department of Education’s Shopping Sheet (released in July 2012) for the 2013-14 award year. Of those institutions

that had not signed on, nearly 70% were still deciding if they would use the Shopping Sheet.

November 2012: NASFAA contracted JBLA to consumer test standardized award letters. This report captures the

perspectives and opinions of high school students, college students, and their parents.

JBLA identied several important ndings from the study participants. First and foremost, among the three award letters

tested, there was no clear winner. Participants found aspects of each award letter useful, but JBLA found that no document

could replace a knowledgeable nancial aid advisor to provide further explanation and assistance in understanding the

award letter. Many participants expressed a frustrated sentiment that guring out how to afford college is a complicated

process. JBLA also found that there was a strong preference for a certain type of letter design that presents nancial

aid information clearly and in a visually streamlined manner. Based on the results from this study, NASFAA presents four

recommendations:

Recommendation #1: Require Additional Consumer Testing. Testing should be conducted at the federal level of

all existing consumer information requirements and disclosures to ascertain their effectiveness. In the future, no new

requirement should be imposed without prior testing.

The primary conclusion of this study is that currently no single award letter proposal is perfect. JBLA consumer tested three

letters: the letter created by the U.S. Department of Education (ED), a letter based on the recommendations from the

NASFAA Task Force, and a hybrid letter created by NASFAA staff, which represents a fusion of the previous two letters.

All three letters were received less than satisfactorily by study participants, although each had elements that should be

included in an “ideal” award letter. This reinforces NASFAA’s standing position on award letters; namely, award letters

would be best improved by developing models that include certain key elements, but are not entirely prescriptive.

This feedback conclusively demonstrates the need for required consumer testing. It shows that, had any of these three

letters been mandated, it likely would have been met with confusion, dissatisfaction, and otherwise unnecessary phone

calls to institutions. Required testing of consumer information disclosures would provide an opportunity to improve the

nal product based on the input of the very consumers the disclosures are meant to assist.

Recommendation #2: Provide a Glossary of Standardized Terminology. Students and families should have easy and

immediate access to a plain-language glossary of nancial aid terms. Award letters from various institutions could present

nancial aid information in slightly various ways, but unied, consistent nancial aid terminology is critical for students and

parents to understand. Based on the NASFAA Task Force recommendation, a “Glossary of Terms for Award Notications”

would contain universally accepted denitions of language typically contained on award notications. The goals of a

universal glossary would be to provide commonly dened and accepted terms, to provide greater clarity and understanding

by students through consistent use and meaning of terms, and to improve prospective students’ ability to compare award

information from multiple schools.

This study’s results underscore the need for clear denitions of terms presented with the award notice. For example,

classication of costs of attendance currently coalesces around the use of “direct” and “indirect” to differentiate between

costs that are charged by the institution and estimates of other expenses the student will likely incur during enrollment.

Study participants indicated that these terms are unfamiliar and can be confusing. Instead of “direct” or “indirect” costs,

different terminology could be more easily understood by students and parents. For instance using the terms “billable”

and “not-billable” could help distinguish between the types of costs a family will face. Whatever terminology is used,

however, an explanation of its meaning and implications is necessary, which could be accomplished through the adoption

of a universal glossary of nancial aid award terms.

Foreword by NASFAA

NASFAA // No Clear Winner: Consumer Testing of Financial Aid Award Letters

Recommendation #3: Provide Institutions with Flexibility to Format Core Elements. The NASFAA Task Force identied

10 core elements that should be presented on an award letter:

1) The cost of attendance;

2) Gift aid;

3) Net costs after gift aid;

4) Self-help options;

5) Assumptions;

6) Links to loan debt aggregators and calculator;

7) Links to consumer information disclosures;

8) Link to public glossary of standard terms and denitions;

9) Financial aid ofce contact information; and

10) Deadlines and next steps.

While institutions should provide these 10 core elements on an award letter, they should also maintain the exibility to

select the best format for the award notice. Such exibility enables institutions to effectively leverage whatever delivery

method (paper, web‐self‐service, email, mobile app, etc.) is available to them. But more importantly, institutions can

create an award letter that best meets a variety of different populations with differing needs, ranging from traditional,

incoming full-time freshmen living on-campus, to returning older part-time students seeking additional training. An award

letter that embodies the NASFAA Task Force’s ten core elements, modied as necessary to reect students’ individual

needs, will result in more students being better informed and understanding the bottom line. This study’s participants

voiced loud and clear their need to know how much it will cost them to go to college.

If standardization were to occur, it would be prudent to examine best practices or requirements in other industries. For

example, Senator Schumer (D-NY) proposed legislation that later became law that requires credit card companies to

standardize specic elements of credit card offers. Also known as the Schumer box, credit card companies are required

to list “key” disclosures on credit card offers to make them more comparable and understandable (e.g., annual fee, if

applicable; annual percentage rate for purchases [APR]; other APRs on balance transfer, cash advances, and default APRs;

grace period; nance calculation method; and other transaction fees). Models like these would likely add more substance

to this conversation.

Recommendation #4: Reassess How and When Consumer Information is Needed and Useful. Consumers should be

given the opportunity to obtain information they want, by providing links rather than dense text that obscures the purpose

of the award notice. Careful consideration should be given to the timing of consumer disclosures. Policymakers’ current

approach to standardizing award letters favors providing a plethora of consumer disclosures in an award notication.

This approach offers two glaring weaknesses: 1) by presenting an overwhelming volume of information at once, critical

information gets lost in the “noise” of competing pieces of data, and 2) what families overwhelmingly want from their

award notication is a simple understanding of what college attendance will cost.

Instead of attempting to squeeze many pieces of consumer information into a one-size-ts-all award letter, institutions

should provide on their award notications a website or contact information for additional information. A central link to

a school‐created web resource that in turn contains links to student consumer information, loan counseling, cumulative

indebtedness, student loan default rates, repayment information, a glossary of nancial aid terms, federal student loan

history, ED’s College Navigator, and the school’s Net Price Calculator. This web resource could also link to nonfederal

student loan history (once this resource is available) and the College Scorecard.

By providing these critical pieces of consumer information on a centralized website, institutions can ensure that this

information is not overlooked on a densely worded award notication. At the same time, this would free up the visual

layout of their award notication to display the type of nancial aid award information that the family is more immediately

concerned with, and in the manner most betting the specic needs of the institution.

It is critical to keep the award letter applicable to the students and families that receive and review it. Consumer

information like graduation rates, loan default rates, and median borrowing may better serve prospective students and

families in the early stages of the college-search process, when students are identifying the right schools to apply to,

and as such, this information should be highlighted more substantially at that point. Currently enrolled students who

intend to stay at their institutions through graduation may not nd these three particular consumer information pieces

useful. The award letter should be considered precious real estate and tailored to give students and families the essential

information they want and need.

NASFAA, March 2013

No Clear Winner: Consumer Testing of Financial Aid Award Letters // NASFAA

Rising Costs of College

As institutions face increased scrutiny over the rising cost of college (Baum & Ma, 2012) and more students leave

college saddled with debt (Baum & Payea, 2012), students are aware they must consider more than the academic

programs and reputation of their prospective colleges. They must have a realistic understanding of actual college

costs that may be overshadowed by complicated student aid offers. Students should be able to anticipate how

much they will need to pay when they enroll, how much grant aid they will receive, and how much loan aid they

will eventually have to repay to governmental, institutional, or private lenders. Understanding how to nance rising

college costs can be a high-stakes situation for students and families.

Financial Aid Reform

Several initiatives have recently been introduced by educational foundations and other major players in the policy

arena to explore ways of addressing the growing concern about the rising cost of college. The Bill & Melinda Gates

Foundation commissioned 16 studies through its Reimagining Aid Design and Delivery project to improve the delivery

and effectiveness of nancial aid programs (Bill & Melinda Gates Foundation, 2012; NASFAA, 2013). The College

Savings Foundation recently held a summit with ED ofcials to explore newly introduced nancial counseling tools,

such as the Net Price Calculator and College Scorecard, aimed at promoting greater transparency to help students

and families make informed decisions about college enrollment and select an appropriate loan repayment option.

Financial Aid Transparency

Providing current and future college students with clear and understandable information about the cost of college

and the aid available to them to meet those costs has become increasingly important as tuition and other associated

costs of college have increased faster than family incomes. The Higher Education Opportunity Act (HEOA) of 2008,

which reauthorized the Title IV federal student aid programs, stressed themes of college affordability, reducing

the cost of attendance, improving information about college costs and creating a model nancial aid award letter.

Many student advocacy organizations have supported efforts to improve award letters (e.g., NASFAA, the National

Association of College Admissions Counselors, and The Institute for College Access and Success). Key stakeholders

agree that nancial aid award letters must be easier to understand, which in turn will help students make realistic

and more informed decisions. However, colleges and universities with different student needs are still debating the

specic content and format of the award letter.

Development of Standardized Award Letters

The pressure to standardize award letters is stemming from the White House, ED, and key committees in the U.S.

Congress. The discussion on standardizing award letters started in 2011 with a series of ED meetings that were

focused on developing a voluntary model award notice rather than a mandated standard. Even with that purpose,

however, participants brought forward the concept of a uniform standard format. During that time, NASFAA

convened the Award Notication and Consumer Information Task Force. The Task Force engaged nancial aid

professionals, who help students on a daily basis and provide practical knowledge of the nancial aid programs,

to work on recommendations to help maximize the effectiveness of award letters and avoid unintended, negative

consequences of over-prescriptive standardization.

In May 2012, Senator Al Franken (D-MN) introduced the “Understanding the True Cost of College Act,” which would

mandate that higher education institutions use a standardized award letter, uniform nancial aid terms, and provide

information about student loan repayment and a host of other student aid-related disclosures directly on or with the

award letter.

Shortly after Senator Franken’s bill was introduced in Congress, ED introduced in July 2012 the voluntary Shopping

Sheet, which aims to help students understand the type and amount of aid for which they qualify and to facilitate

comparison of aid packages offered by different institutions. According to Secretary of Education Arne Duncan,

“Every university is already sending information to students each year, just not in a clear way that is understandable”

(ED, 2012) The Shopping Sheet standardizes the presentation of the following information: college costs for one year,

the amount of nancial aid by program type, net cost of attending, average monthly payments on federal student

loans after graduation, the six-year graduation rate, cohort default rate, and median borrowing at that institution.

The Shopping Sheet is not required to be used by institutions, but by December 2012, 600 institutions had agreed

to use the Shopping Sheet.

Background

NASFAA // No Clear Winner: Consumer Testing of Financial Aid Award Letters

However, NASFAA is concerned with the inexible standardization of the Shopping Sheet and the practicality of

Senator Franken’s proposal. Institutions need a exible nancial aid award letter that best meets the needs of their

unique student populations. To that end, NASFAA asked JBL Associates to test the Shopping Sheet along with two

other award letters with consumers – students and parents. The test aimed to answer a simple, but critically important

question: Do these letters do what they are intended to do?

Furthermore, NASFAA was interested in exploring whether students and families understand how much college really

costs after they apply for nancial aid, and before they make the nal decision about where to enroll. The key question

is the degree to which the letters provide clear and understandable information that helps students and families

discern the options being presented. After reading the different letters, can students and parents clearly articulate

how much money they will need to borrow, earn, and save in order to attend a college or university?

As NASFAA has noted, many students are no longer “shopping” at the time they receive a nancial aid award letter,

particularly those who are not rst-time students but rather, returning to the same institution the following year

(NASFAA, 2012). In addition, the majority of students who attend community colleges and for-prot institutions

reect the growing reality of the 21st Century student who does not necessarily leave home to live on a traditional

college campus while attending college. Rather, today’s students often mix part-time enrollment and working; many

are independent and nontraditional-aged, and many students are from low-income backgrounds and the rst in their

families to attend college. According to ED (2008), nearly half of postsecondary students (47%) enrolled in credit-

based classes attend part-time, and just over two-thirds attend an institution within 30 miles of their home (67%). The

percentage of students aged 25 and above has increased from 28% in 1970 to 43% in 2010 (Snyder & Dillow, 2012).

For these college students, location may be the major factor in their decision and they may have a limited geographic

choice of colleges to attend. The cost, while of utmost importance, is only a part of the college-decision process, but

it nonetheless must be as clear as possible.

Need for This Study

A plethora of information about nancial aid and the cost of college is available for students and parents, but

deciphering that information and determining which information is reliable can be a challenge. Researchers at Project

Information Literacy, a large-scale study about early adults and their research habits, found that college students

“are afraid of getting lost in a thicket of information overload they cannot dodge... no matter where students are

enrolled, no what information resources they have at their disposal, and no matter how much time they have, the

abundance of information technology and the proliferation of digital information resources have made research

uniquely paradoxical” (Head & Eisenberg, 2011). Although ED has made some attempts to simplify the information,

“a big push from the federal government to provide better consumer information has not created better-informed

consumers” (Supiano, 2013).

The Center for American Progress (CAP) recently published a report emphasizing the importance of consumer testing

of disclosures introduced by government agencies before distributing them to consumers. Consumer testing of

student disclosures rarely occurs, however, and by foregoing consumer testing, “disclosures risk being overlooked

and misunderstood” (Morgan & Dechter, 2012). Specically, ED and other federal agencies should ensure that

disclosures such as the shopping sheet are subjected to “rigorous testing” such as the methods employed here

– namely, focus groups, interviews and surveys – and then act on the results by making adjustments accordingly

(Morgan & Dechter, 2012).

No Clear Winner: Consumer Testing of Financial Aid Award Letters // NASFAA

For a complete explanation of how this study was conducted, please see Appendix A. Generally speaking, each

focus group was conducted in two parts. First, the interviewers (JBLA) asked all participants to review the three

letters (copies of which are available in Appendix B), which was followed by a questionnaire (Appendix C) testing

their comprehension of each letter. Next, as a group, interviewers asked participants a series of questions (Appendix

D) on their opinions about each letter. Participants were not made aware of the background information to the

study (i.e., reasons, goals, and objectives) in order to obtain their unbiased perspectives and opinions on the letters,

but were debriefed at the end of the focus group. Sample letters were based on real nancial aid scenarios for the

respective type of institution the individual attended or planned to attend. Letters were not labeled with any real

names of individuals, institutions, or organizations, however. Letters A, B, and C referred to ED’s Shopping Sheet,

the recommendations based on the NASFAA Award Notication and Consumer Information Task Force letter, and a

NASFAA-designed hybrid of the two, respectively.

Overall Impressions of Letters

All participants requested more than the allotted time to review letters and complete questionnaires. Overall, when

asked for their opinions of the letters, students and parents alike felt overwhelmed and confused by the information

presented. One student asked jokingly if there were a book called “Financial Aid for Dummies” to help decipher the

information. A parent commented, “Everything seems so complicated these days. I feel like I need to take a class to

understand [the nancial aid process].” The participants did not identify one letter as the clear favorite, but rather

identied components of each letter they would like included in an ideal letter.

When asked about the purpose of the letters, students and parents generally understood the intention of the letters,

which was to communicate information about college costs, amount covered by aid, and amount that must be paid

out of pocket. One parent summarized the purpose as being to “let students and parents know what the bottom line

is going to be…gure out how much they have to pay…if they have to borrow loans to attend college…whether or

not they can afford this college.” A student described the purpose of the letters as informing students “this is how

much we are going to give you. This is how much you are going to have to make the other way… Showing you if you

need to start saving now or how to gure out how much money you will need.”

Letter Ratings

Preceding each focus group, we asked participants to review each letter and complete a questionnaire to capture

their perceptions of the three different letters. We asked participants to rate each letter on a scale of 1 to 4 (1=

strongly agree, 2 = agree, 3 = disagree, 4 = strongly disagree) on the following measures:

• the letter clearly states where to nd additional information;

• the student or parent would be able to make an informed decision about nances after reading the letter; and

• the letter is clear and easy to understand.

Figure 1 displays the percentage giving each letter the highest two ratings, agree or strongly agree.

The ratings are relatively low for clarity and information across all three letters. Figure 1 shows a higher percentage

felt the letters stated clearly where to nd additional information – 64%, 59%, and 74% for Letters A, B, and C,

respectively. And yet, just over half of respondents agree or strongly agree that letters A and C are clear and easy to

understand and provide sufcient information, while only 40% feel that way about Letter B.

Findings

NASFAA // No Clear Winner: Consumer Testing of Financial Aid Award Letters

Figure 1. Percentage of Letter Ratings Based on Information, Informed Decision, and Ease/Clarity (Agree and

Strongly Agree).

Please rate each letter on the following:

N=90

Then, participants were asked to provide feedback on which letter, overall, was the clearest and easiest to understand.

Figure 2 shows the overall results, but also the results by participant group. Based on responses, 46% of respondents

stated that Letter C’s NASFAA Hybrid appears to be favored overall in terms of clarity and ease of comprehension.

Among the participant groups, NASFAA Hybrid (Letter C) was favored over the other letters by high school parents

(55%), college students (48%), and college parents (45%). High school students, however, were split between Letter

B (NASFAA Task Force) and Letter C (NASFAA Hybrid) as their preferred letter, with 35% selecting each as their top

choice.

Figure 2: Percentage of Respondents Selecting Each Award Letter as Clearest and Easiest to Understand (by

participant group)

Which letter is most clear and easy to understand?

N=81

The letter clearly states

where to nd additional

information about the

nancial aid process

A student would be

able to make an

informed decision

about his/her nances

after reading this letter

The letter is clear and

easy to understand

Letter A (ED Shopping Sheet)

Letter B (NASFAA Task Force)

Letter C (NASFAA Hybrid)

51%

40%

56%

52%

40%

58%

74%

59%

64%

Letter A (ED Shopping Sheet)

Letter B (NASFAA Task Force)

Letter C (NASFAA Hybrid)

26%

28%

46%

29%

35% 35%

18%

27%

55%

19%

32%

48%

40%

15%

45%

Overall High School

Students

High School

Parents

College

Students

College

Parents

No Clear Winner: Consumer Testing of Financial Aid Award Letters // NASFAA

Focus Group Results

The following sections summarize focus group participants’ reactions to each of the letters (please see Appendix A

for details of the focus group methodology). It should be noted that participants both within and between groups did

not reach a clear consensus as to the preferred letter or effective letter components. In each focus group, we found

a range of opinions and reactions to each of the letters both in terms of layout and content. These focus groups,

while they spanned institution type, level, and sector, reaching both students and parents, were merely meant to be

exploratory in nature to determine whether any initial ndings merit a more rigorous study with a broader reach. The

focus groups here are not intended to provide quantitative, conclusive evidence but rather provide qualitative insight,

context, and potential explanations behind the quantitative questionnaire ndings.

Letter A – U.S. Department of Education Shopping Sheet

Many of the students and parents with whom we met indicated they preferred the layout and design of Letter A.

One group of college students who had more familiarity with the nancial aid process than other groups noted that

it would actually be the “most complicated [of the letters] if you don’t know what you are doing” because it did not

have as much text explaining concepts. The comprehension level of Letter A, therefore, could depend on the reader’s

prior knowledge of nancial aid.

Specically, participants liked the following aspects of Letter A:

• The “top-to-bottom” layout of the letter and separation of different sections in bold print with a separate box for

each category.

• The inclusion of median borrowing and monthly payments, information about loan repayment, and where to nd

additional information.

• The listing of institutional contact information including address, phone number, and e-mail.

• College parents at the public four-year institution felt this letter spelled out “net costs” the most clearly, and

appreciated the inclusion of family contribution and “other” options such as military benets.

Participants did not like the following aspects of Letter A:

• The letter did not break down direct and indirect costs.

• A parent at the private four-year institution appreciated the inclusion of family contribution, but felt “the letter didn’t

explain clearly” what this meant or how it could be used.

• Public four-year college students who worked in the nancial aid ofce at their institution did not notice work-study

at rst since it was listed as a “Work Option.” They felt it should have been included under nancial aid options.

Extraneous or Unhelpful Information

For the most part, students did not nd the additional institutional information provided in Letter A (graduation

rates, loan default rates, and median borrowing) to be helpful in the award letter. Students at private and for-prot

institutions said the information might be helpful when deciding which school to attend, but would prefer that it be

listed separately from the nancial aid information. High school students planning to attend the local community

colleges or state university did not think this information would inuence their decision at all, and one said “you can

nd this information on the school website.” They would rather see denitions of nancial aid terms in the space

used for graduation rates. One parent did nd the information helpful in determining “where we would get the most

bang for our buck.”

The importance of this information may also depend on the type of institution to which the student applied. With the

exception of students at a four-year private institution, students with whom we met emphasized factors other than

graduation rates playing a greater role in their college selection process, such as location, cost, academic programs,

class size, and in the case of the four-year public institution, athletics and social life.

NASFAA // No Clear Winner: Consumer Testing of Financial Aid Award Letters

Letter B – NASFAA Award Notication and Consumer Information Task Force Letter

Students and parents overall appreciated Letter B’s breakdown by semester and the introductory text included. In

addition, participants reported they liked the following aspects of Letter B:

• The breakdown of costs and awards by fall and spring semesters, and a couple of community college parents in

particular noted they plan by semester rather than by year.

• The opening paragraph and personalization of the text. In particular those who are not “numbers-oriented” found

it to be “less overwhelming.”

• The clear breakdown of direct and indirect expenses.

• Many students and parents across institutions commented that Letter B demonstrated the calculations of totals

such as loans in a fairly straightforward manner. As one high school student noted, “It does the math for you and

for each semester.”

• High school parents found the contact information at the bottom, with a phone number for further questions,

helpful.

Participants did not like the following aspects of Letter B:

• While many appreciated the breakdown by semester, some college students and parents “felt it was not broken

down enough” and the “horizontal layout is confusing.”

• One student at the public four-year institution did not notice the contact information at rst and felt it was not

visible enough: “it’s in ne print.”

• High school students and parents pointed out that Letter B did not provide any information about loan repayment

or family contribution.

• One community college parent noted that Letter B was the only one not to list PLUS loans as an option, which she

felt to be “very important.”

• A few high school students and parents were confused by the number of different “net costs” listed.

• A high school student felt Letter B did not sufciently explain “self-help options.”

• A community college parent felt cost of attendance was “buried down instead of at the top.”

• College parents from the public four-year institution noticed that Letter B was the only one that did not “spell out

that gift aid doesn’t need to be repaid.”

Letter C – NASFAA Hybrid of the Shopping Sheet and Task Force Recommendations

Many students and parents felt Letter C communicated information most clearly, and was a good compromise

between letters A and B in breaking down information in an easy-to-follow layout. College students from the private

four-year institution reported that Letter C is “structured in an intuitive way…easy to understand.” They added that

Letter C “clearly stated how much it costs to go there, how much you get, and how much you have to pay on your

own.”

Specically, participants from all groups reported they liked the following aspects of Letter C:

• The “straightforward” and “clear” breakdown of costs

• The opening paragraph

• The explanation of direct and indirect costs, and gift aid

• The calculation demonstrating the different ways of looking at costs, in bold print (“it was simple to understand

the bottom line.”)

• The grouping of additional nancing options

• The link with PLUS loans for additional information

• Links to additional resources and contact information, formatted in a box so it “pops up.”

• High school parents noted they appreciated the “top-to-bottom straight layout.”

No Clear Winner: Consumer Testing of Financial Aid Award Letters // NASFAA

Participants did not like the following aspects of Letter C:

• High school and community college students wanted more information about the “no fee nine month payment

plan,” as it was not clear what that meant.

• No phone number was listed for the nancial aid ofce, just an email address.

• Parents at the four-year private institution were confused about what the “miscellaneous” indirect cost item

included, and whether this was a mandatory fee.

• A few high school students noted that family contribution was not included.

Comprehension Questions

In addition to assessing letter preferences, the questionnaire included items to test respondents’ (students and

parents) comprehension levels of nancial aid concepts presented in the letters. The goal of this testing was to assess

whether nancial aid concepts and content were presented in a clear, easy-to-follow manner that individuals without

nancial aid background or experience would be able to understand.

The percentage responding correctly to questions testing comprehension levels of nancial aid concepts as presented

in each letter varied greatly by question and by letter. For the rst question, “What is the total cost of attendance

before any gift aid is taken into account?” the majority of respondents seemed to understand the concept being

tested: the total cost of attendance. Letter A seemed to communicate this information slightly more effectively than

Letters B and C, with 89%, 77%, and 76%, respectively, responding correctly (Figure 3).

Figure 3. Percentage of Respondents with Correct Responses (Evaluating Costs of Attendance)

What is the total cost of attendance in each scenario before any nancial aid is taken into account?

n = 90

The second comprehension question (Figure 4), “How much does each letter estimate the student will spend on

indirect expenses?” tested respondents for their knowledge of indirect versus direct costs, which are costs directly

billable to the institution. The percentage of correct responses were much higher for letter B than for the other two

letters: 82% of respondents were able to identify this information correctly on Letter B, compared with only 26% on

Letter A, and 49% on Letter C. This indicates that Letter B more clearly labels indirect expenses than the other two

letters. Letter A, however, lumps together tuition and fees with optional expenses that do not apply to all students,

without a label such as “indirect” to separate the two categories of expenses. Letter C does label indirect expenses,

but does not provide an indirect subtotal, which would explain why approximately half of respondents could not

identify this information on Letter C.

Letter A

(ED Shopping Sheet)

Letter B

(NASFAA Task Force)

Letter C

(NASFAA Hybrid)

100

89%

77%

76%

NASFAA // No Clear Winner: Consumer Testing of Financial Aid Award Letters

Figure 4. Percentage of Respondents with Correct Responses (Evaluating Indirect Costs)

How much does the letter estimate the student will spend on indirect expenses?

n = 90

The third comprehension question asked: “How much grant or scholarship aid is available in each scenario? (i.e., gift

aid that does not need to be repaid)” (Figure 5). The majority of respondents were able to identify this information

on Letter A (91%) and Letter C (92%), which is higher than the correct response rate for any other comprehension

question. While a majority (63%) responded correctly to Letter B, this response rate was relatively lower than those for

the other two letters. While Letter B does delineate a subtotal for gift aid, it could be that the separation by semesters

in this letter caused some confusion among respondents when seeking a total. Respondents in general did seem to

appreciate the breakdown by semester, however, when prompted in the focus groups.

Figure 5. Percentage of Respondents with Correct Responses (Evaluating Gift Aid)

How much grant or scholarship aid is available in each scenario (i.e., gift aid that does not need to be repaid)?

n = 90

The fourth comprehension question, “How much would the student in each scenario owe the institution after taking

into account grants and scholarships? (i.e., aid that does not need to be repaid),” elicited the lowest number of

correct responses (Figure 6). This is in part due to the wording of the question. The goal was to test the respondents’

comprehension of the concept of direct expenses, or those expenses directly billable to the institution. This required

respondents to pay close attention to the wording, and specically to interpret “owe the institution” as only direct

expenses – tuition and fees. Many respondents glossed over that specic wording and interpreted the question as net

costs (both direct and indirect) after gift aid. The response rate was lowest for Letter A (4%), followed by Letter B (12%),

and Letter C (23%). Letters B and C both specically list “direct costs after gift aid.” Letter C also shows the calculations,

in bolded print, used to determine direct costs after gift aid, which may make it easier to understand this concept.

Letter A

(ED Shopping Sheet)

Letter B

(NASFAA Task Force)

Letter C

(NASFAA Hybrid)

100

26%

82%

49%

Letter A

(ED Shopping Sheet)

Letter B

(NASFAA Task Force)

Letter C

(NASFAA Hybrid)

100

91%

63%

92%

No Clear Winner: Consumer Testing of Financial Aid Award Letters // NASFAA

Figure 6. Percentage of Respondents with Correct Responses (Evaluating Direct Costs)

How much would the student in each scenario owe the institution after taking into account grants and

scholarships (i.e., aid that does not need to be repaid)?

n = 90

The fth question (Figure 7), “How much remaining cost would the student need to cover in non-grant aid (i.e. loans,

work-study) or other resources (i.e., cash payments, etc.)?” was worded very similarly to the preceding question

about net direct costs; however, this question essentially asked respondents to identify net costs, or the total amount

owed once aid is taken into account. Some respondents did not seem to understand the difference between the two

questions, based on the responses they provided. A relatively higher percentage responded correctly to this question,

with 42%, 23%, and 40%, respectively, responding correctly for letters A, B, and C. Respondents were about half as

likely to identify this information correctly on Letter B than on the other two letters. It could be that Letter B’s correct

response rate was lower because it provided too many “net” options: Net Direct Costs after Gift Aid, Net Total Costs

after Gift Aid, and Net Total Costs after Gift Aid and Self-Help Options.

Figure 7. Percentage of Respondents with Correct Responses (Evaluating Net Costs)

How much remaining cost would the student need to cover in non-grant aid (i.e. loans, work-study) or

other resources (i.e., cash payments, etc.)?

n = 90

Letter A

(ED Shopping Sheet)

Letter B

(NASFAA Task Force)

Letter C

(NASFAA Hybrid)

100

12%

23%

Letter A

(ED Shopping Sheet)

Letter B

(NASFAA Task Force)

Letter C

(NASFAA Hybrid)

100

42%

23%

40%

NASFAA // No Clear Winner: Consumer Testing of Financial Aid Award Letters

The nal two comprehension questions were “yes or no” responses. The rst question asked if enough aid was being

offered to cover direct costs, and the second if nancial aid was sufcient to cover all costs. While correct responses

were relatively high compared to those of some other questions, it seemed, based on focus group responses, that

participants have varying denitions of “nancial aid” – some consider it to be only gift aid (scholarships, grants),

and place loans and work-study into a separate category; whereas others dened all types of aid (grants, loans, and

work-study) as nancial aid. Roughly two-thirds to three-fourths of respondents answered both questions correctly

with the exception of Letter A, to which just over half, or 58% responded correctly to the question about aid covering

direct costs (Figure 8). This is likely due to the fact that direct and indirect expenses are not separated into different

categories on Letter A. Also, loans and work-study appear separately from other aid sources below net costs.

Figure 8. Percentage of Respondents with Correct “Yes” Response (Award Covers Direct Costs)

Is the student in each scenario being offered enough nancial aid to cover direct costs?

n = 90

The majority responded correctly to the last comprehension question, about whether nancial aid offered covers

all costs (Figure 9). This question was simpler than the other comprehension questions as it did not require an

understanding of direct and indirect expenses.

Figure 9. Percentage of Respondents with Correct “Yes” Response (Award Covers All Costs)

Is the student in each scenario being offered enough nancial aid to cover all direct and indirect costs?

n = 90

Letter A

(ED Shopping Sheet)

Letter B

(NASFAA Task Force)

Letter C

(NASFAA Hybrid)

100

58%

67%

70%

Letter A

(ED Shopping Sheet)

Letter B

(NASFAA Task Force)

Letter C

(NASFAA Hybrid)

100

77%

70%

67%

No Clear Winner: Consumer Testing of Financial Aid Award Letters // NASFAA

Table 1 summarizes the number and percentage of participants responding correctly to each of the comprehension

questions, and the overall averages for each letter.

Table 1. Summary of Correct Responses to Comprehension Questions

Letter A Letter B Letter C

(ED Shopping Sheet) (NASFAA Task Force) (Hybrid)

# % # % # %

Total COA before aid 80 89% 69 77% 68 76%

Indirect costs 23 26% 74 82% 44 49%

Gift aid 82 91% 57 63% 83 92%

Owe institution after gift aid 4 4% 11 12% 21 23%

Remaining cost after gift aid 38 42% 21 23% 36 40%

Aid covers direct costs? (Y/N) 52 58% 60 67% 63 70%

Aid covers all costs? (Y/N) 69 77% 63 70% 60 67%

Average 50 55% 51 56% 54 60%

n = 90

Financial Aid Terms

We asked participants if they could explain to us the meaning of various nancial aid terms used in each letter. Their

responses are highlighted below, broken down by specic term:

• Direct/Indirect Costs – In general, respondents did not seem to completely understand the concept of direct

versus indirect costs. It should also be noted that Letter A – Shopping Sheet does not identify or separate direct

and indirect costs. Below are some of the explanations offered when prompted:

o “Not exible” versus “exible.”

o “[Indirect costs] are not paid directly to schools… extra things.”

o Direct costs are “essentials, items you have to have. Indirect [includes] housing and meals.”

o Indirect costs are “different for everyone” while direct are the same for everyone.

o As one high school parent explained, “Direct includes tuition and board. Indirect is everything else.”

o “Direct is for school-related stuff and indirect is others.”

o A community college parent explained direct costs as those “you can’t change,” while “indirect costs you

can nd ways not to pay.”

o One student from the public four-year institution who works in the nancial aid ofce was confused as to

whether room and board should be considered direct or indirect based on the way it was presented in the

letters.

• Subsidized/Unsubsidized Loans – While the letters did not provide denitions for subsidized and unsubsidized

loans, we asked participants whether they had an understanding of this concept because the terms were included

on the letters as a source of aid. Students and parents for the most part did not know the difference between

subsidized and unsubsidized loans, unless they already had experience with those types of loans. Even those who

had experience borrowing subsidized loans could not explain exactly what that meant. Some understood the

difference between subsidized and unsubsidized as having to do with interest, but could not explain the exact

difference. Some noted they would go to links included in the resources for additional information. While the links

and/or separate glossary sheet included with the letters may explain this concept, it may be worth including a brief

denition directly on the letter where the term appears.

NASFAA // No Clear Winner: Consumer Testing of Financial Aid Award Letters

• Net Costs – Some participants felt the term “net cost” was confusing, especially since it was presented and

worded slightly differently on each letter. One dened net costs as “what you would owe the institutions after

grants.” Others dened it as “the total.” A student at the for-prot institution said, “Net cost shouldn’t include

transportation, books, room and board and costs like that. Because you would think that will be your total and get

a loan for that amount, and end up not using all of them but you pay back with a lot of interest. Most of us don’t

live on campus so the net cost shouldn’t include room and board.”

• Scholarships vs. loans – Most students and parents understand the difference between scholarships and loans.

However, when asked to identify the types of aid available in addition to grant and scholarships on each letter, they

did not include loans in their answers.

When asked if it is helpful or important to understand nancial aid terms in the letters, one community college parent

said that trying to understand nancial aid terms is “like splitting hairs. Tuition is tuition…I nd the terminology

confusing.” Another remarked: “I’ve never heard of these words…I want it as clear as you can…Even if you have a

Ph.D. in English, your brain turns to mush.” Another parent felt the vocabulary is “overwhelming…learning about

nancial aid is like learning a new language. Having denitions, perhaps on a separate page, would help.”

Below are some additional thoughts participants shared about the importance of understanding specic terms:

• Direct/Indirect Costs: Most parents and students said they did feel it is important to know the difference between

direct and indirect costs. However, it may not be necessary to understand those terms exactly. Some would rather

see this information in layman’s terms; for example, which costs are “xed,” or mandatory to pay the institution, and

which costs are optional or vary with the individual’s situation. Several students and parents pointed out that indirect

expenses such as housing are not applicable to students who do not live on campus, such as those attending a

local community college. In those cases, some prefer to see only mandatory tuition and fees due directly to the

college, while others actually like to keep indirect costs in the letter, even if they don’t apply, so they can see how

much they are saving.

• Subsidized/Unsubsidized loans: All agreed it is important to know the difference between subsidized and

unsubsidized loans, although most felt none of the letters clearly explained these terms.

• Net costs: Participants seemed to prefer layman’s terms here too; for example, the “total cost of attending the

school.” Some suggested substituting more commonly used terms such as “nal,” “overall,” or “total” in place of

“net” to avoid confusion. It did not appear to help to have the term “net cost” unless the calculation was spelled

out, and in fact seemed to cause some confusion if not adequately dened. One student said, “Don’t give me the

net cost. Tell me what I’m going to pay,” in other words, in “real” terms he could understand.

• Scholarships vs. loans: In general, both students and parents seemed to understand the difference between

scholarships and loans, and this terminology did not cause any confusion.

No Clear Winner: Consumer Testing of Financial Aid Award Letters // NASFAA

No Clear Winner

Across the board, participants liked parts, but not the whole, of each letter. Students and parents did not necessarily

feel that one letter met all their needs; rather, they suggested ways for customizing an ideal letter based on

components from each of the three letters. The reactions of focus group participants suggest the need for letters to

be based on individual and institutional characteristics, rather than a single standardized, global template.

Bottom Line

Students and parents did not necessarily feel that one letter met all their needs. Instead, we heard repeatedly from

students and parents alike, across all institution levels and types, from both those who already had experience with

the nancial aid process and those who had not, that what they want out of these letters is “Bottom line, what is it

going to cost me?” As one student said, “I want it spelled out for me,” in “plain English.” A lot of parents said they

need to know what they have to pay; that’s the most important information.

Below are additional similar responses:

• “They just need to tell me how much I need. How much I need to go to school.”

• “Just show the basics of costs…how much money you’ll need.”

• “Just how much I owe. I just want to know the bottom line. Skip the other stuff.”

• “It needs to be simple to read. You come home from work, it seems simple, but it really isn’t. You start reading

about direct and indirect. It’s like what the heck. Use easy words.”

Personal Contact

Some felt the letters could be more personalized and “show a little more interest in the student.” In general, the

introductory text in letter B was appreciated by students and parents. In its report, CAP reinforces the importance

of including an introduction with an identifying logo, describing the purpose of the letter (Morgan & Dechter, 2012).

While the letters can help provide essential information, many students and parents recognized that ultimately,

there is no substitute for human contact with the nancial aid ofce or other ofcial. As one parent said, “If I have

any question, I want a [phone] number…” A high school student remarked, “I would rather have interaction with a

person…I’d go to my high school counselor.” A student at the college level concurred: “I would like to talk to people.

So I look for a phone number.”

Other Institutional Information

Most students did not think they would nd graduation rate information to be helpful in the selection process.

However, many offered the following items as factors other than nancial aid that play a role in their decision-making

process:

• Academic programs available

• National rankings

• Success rates after graduation, i.e. job placement

Job placement rates may be difcult to obtain and likely will not be reported across sectors in a uniform measure

in the near future (with the exception of for-prot institutions, which offer career-specic programs). However,

expected outcomes after graduation, or return on investment, appear to be top concerns among students today.

CAP recommended that graduate outcomes, such as job placement and earnings data by major, be included in the

College Scorecard, a similar disclosure just recently introduced by the White House and ED (Morgan & Dechter,

2012). However, the timing of when students should receive information about employment and wage outcomes

is critical, and the point at which a student receives a nancial aid award letter leaves little time to make a college-

choice decision.

NASFAA // No Clear Winner: Consumer Testing of Financial Aid Award Letters

Additional Financial Information

The following items were cited by some individuals as important information to include in the letters to help their

understanding of the nancial aid package:

• A breakdown of “mandatory” fees

• Link to explanation of how indirect costs (transportation, books, etc.) are calculated

• Directions on what to do next, and instructions for how to get loans

• Interest rates for each type of loan, information about “when you start accruing interest and when you need to start

repaying loans”

• Work-study details, separate from other categories

• Online interactive tool to calculate your own loans, repayment rate, indirect costs, etc. (i.e., more personalized

options)

• Examples of what nancial aid packages/amounts other students at the institution are receiving

• Details of each institutional scholarship (“what the scholarship is for” and what type i.e., athletic, academic, other)

• Applicable fees for international students

Formatting

When asked about how they would improve the letters, formatting was repeatedly cited as making a big difference

in how the information is communicated effectively. As one student stated, “These letters have all the information

but the presentation is so important.” Students felt “the priority numbers should be bolded” in larger print to make

it easier to understand bottom line. Simple improvements like “increasing font size to make the contact information

more visible” seemed important.

Many appreciated the “top-down” format of Letter A, and the “separate boxes for each category” and bold print

clearly delineating different sections and nance sources. Others liked the information being broken down by

semester in Letter B and having that presented side-by-side. And many found the separate boxes listing additional

resources and contact information in Letter C to be helpful. As noted, no one letter appeared a favorite in totality.

Rather, students and parents alike appreciated different aspects of each letter and even offered suggestions for

creating an improved letter based on those features.

In terms of viewing the letter on paper or online, many parents recognized that not all families have access to the

Internet. Also, a high school parent noted, “something as important as this must be on paper” and sent to the home

so parents of dependent students can be sure to view it, since they are often the individuals responsible for the

nancial aid process, whether or not by choice. The same high school parent said her “daughter doesn’t want to look

at this; she wants me to do it all.”

This study tried to ascertain how consumers (students and parents) would understand the information on a model or

standardized award letter notication. We tested three types of award letters: Letter A (ED’s Shopping Sheet), Letter

B (Recommendations based on NASFAA Task Force), and Letter C (NASFAA Hybrid), which combined elements

from the Shopping Sheet and Task Force) and found no clear winner among the three letters. Rather, participants

liked parts, but not the whole, of each letter. Students and parents did not necessarily feel that one letter met all

their needs; instead, they suggested ways for customizing a better letter based on components from each of the

three letters. For instance, a general glossary explaining the terms on the award letter would have been very helpful

according to the participants. Also, participants believed that information not pertinent to nancial aid should not

be on the award letter (i.e., graduation rates, default rates, and median borrowing). The reactions of focus group

participants suggested the need for letters based on individual and institutional characteristics, rather than a single

standardized, global template. We agree with NASFAA that consumer information requirements and disclosures

must rst be tested on consumers, as supported by the fact that participants in this study did not nd any of the

letters to be clearly understandable. What is clear is that consumers need college information that is timely, useful,

comprehensible, and takes account of the different needs of a diverse student population.

Conclusions

No Clear Winner: Consumer Testing of Financial Aid Award Letters // NASFAA

Research objectives

NASFAA and JBLA sought to answer the following research questions:

• Which of the three letters is the clearest and easiest for parents or students to understand?

• Which component(s) of each letter do students or parents value?

• Which component(s) are unclear or confusing?

• What information are students or parents seeking in an award letter?

• Do students/parents understand basic nancial aid concepts after reviewing each letter?

To answer these questions, JBLA carried out 12 focus groups total: eight in-person with high school seniors, high

school parents, and undergraduate college students, and four online with college parents in each sector with the

exception of for-prot institutions, since most students enrolled there are independent. We held the focus groups

with college parents remotely since they tend to be dispersed in many different locations and not concentrated in a

single place like the students. In-person focus groups were held in three geographically diverse locations: one in an

urban area of the Northeast, a second in a suburban area of the Mid-Atlantic, and a third in a rural area of the South.

Between the three locations, focus groups convened four different groups of college students on their respective

campuses: one community college, one four-year public university, one four-year private university, and a for-prot

institution. Site coordinators (i.e., high school counselor, high school principals, college nancial aid administrators,

and college enrollment directors) at both high school and college levels recruited individuals from low-to-middle-

income socioeconomic status (SES) backgrounds based on their knowledge of the individuals’ nancial need, but were

unable to share SES and demographic characteristics in order to protect the participants’ privacy.

These groupings allowed for the contrast of multiple sets of stakeholders at different stages in the nancial aid

application process. High school seniors were preparing to apply for college and were less likely to be familiar with

the nancial application process. College students and their parents were more likely to have already experienced

the nancial aid application process and therefore had a basis for comparison.

Site and participant recruitment

NASFAA and its members led the site visit selection process by identifying institutional participants in diverse

geographic locations who were willing and available to participate. With the exception of college-parent focus

groups held online, we met with students and high school parents on their respective campuses to ensure greater

participation rates. Financial aid directors at each participating institution invited students to participate, drawing on

institutional data to ensure demographic diversity in terms of gender, race/ethnicity, income level, dependency, and

parents’ highest education level. NASFAA staff coordinated the recruitment process between two state members

and site representatives, and JBLA followed-up with institutions to ensure adequate participation (i.e., a minimum of

eight participants per site).

Focus group procedures

Focus groups began with a debrieng about the overall purpose and topic, without divulging any background

information about the organization conducting the study or the recent development of the ED “Shopping Sheet.”

Participants were assured condentiality and informed that focus groups were being recorded for accuracy. Only rst

names, and no other personally identifying information, were used. We then asked participants to take a few minutes

to independently review each of the three letters, and to complete a questionnaire asking for their initial impressions

and comprehension of concepts presented in the letters. Participants then came back together as a facilitator-led

focus group to provide additional feedback about their experiences reviewing each letter.

A researcher from JBLA facilitated each focus group with a representative from NASFAA present to observe

participants’ responses, debrief participants about the study, and provide answers to nancial aid questions and

explanations of the nancial aid concepts presented in the letters following the focus group. A second JBLA researcher

was also in attendance to act as an observer and to ensure accuracy and objectivity of the transcription analysis. The

second JBLA researcher also ensured the protocol was being followed, tracked time, and took notes as a backup to

the recording.

Each focus group consisted of roughly 8-12 individuals. Participants were provided with a twenty-ve dollar incentive

for participation and to cover the cost of travel, time, and other expenses such as childcare that parents incurred.

Appendix A: Methodology

NASFAA // No Clear Winner: Consumer Testing of Financial Aid Award Letters

Participants

Table 2 breaks down the total number of participants by category and institution type:

Table 2. Number of focus group participants by category and institution type

Participant Type #

High school seniors 18

High school parents 15

College Students: Four-year public 9

College Students: Four-year private 7

College Students: Community college 11

College Students: For-prot 10

College Parents (online): Four-year public 4

College Parents (online): Four-year private 9

College Parents (online): Community college 7

Total 90

Qualitative/quantitative data analysis

JBLA transcribed qualitative focus group data and coded responses by frequently occurring categories and themes.

Codes were generated based on initial eldwork and then reviewed and modied as additional data were collected.

Using this procedure protected the researchers against personal bias and helped ensure a thorough analytical

treatment of the data. JBLA then analyzed coded focus group responses using the research questions as a guide.

In addition to the qualitative information obtained from each group, JBLA quantied the ratings and responses

collected from the questionnaires of each participant. Due to privacy and condentiality concerns, JBLA did not use

personal identifying information.

Limitations

One limitation to focus groups is that some degree of self-selection bias may result from individuals who are already

more involved in the nancial aid process being more likely to agree to participate. This did not seem to be the case

in each group; we appeared to have a range of nancial aid knowledge among participants from those who were

soon to apply for nancial aid for the rst time, to others who had already been through the process. One group of

students, as noted, worked in their university’s nancial aid ofce and provided helpful feedback based on not only

their nancial aid receipt but also their assistance with other students through the nancial aid process. Even these

savvy consumers were confused by some of the information presented. This range of backgrounds and perspectives

provided a unique insight into the perceptions of each letter.

While the number of total respondents (n=90) to the questionnaire is relatively low to draw any conclusions

disaggregated by specic student or institutional characteristics, the purpose of this largely qualitative study was

to provide an in-depth understanding of how nancial aid applicants digest standardized consumer information.

Qualitative research, and focus groups in particular, play a key role in social science research elds including

education, by providing “depth and richness in the ndings” (Marshall & Rossman, 2006). Focus groups also provide

the advantage of generating vital ndings into topics that were not understood well through quantitative methods

(Berg, 1989). JBLA and NASFAA felt this was the most appropriate method to conduct an initial, exploratory study

of previously untested consumer products.

No Clear Winner: Consumer Testing of Financial Aid Award Letters // NASFAA

Appendix B: Award Letter Mockups

Letter A

Community College of the United States (CCUS)

John Jones, 987654

Costs in the 2013-14 year

Estimated Cost of Attendance for full-time enrollment

Tuition and fees

............................................................................................... $

Housing and meals

(off-campus) ......................................................................

Books and supplies .........................................................................................

3,010

7,273

1,070

$ 14,158 / yr

Graduation Rate

Percentage of full-time

students who graduate

within 3 years

Transportation ..................................................................................................

Other educational costs .................................................................................

970

1,835

LOW MEDIUM HIGH

Grants and scholarships to pay for college

Total Grants and Scholarships

(“Gift” Aid; no repayment needed)

Grants from your school

.................................................................................

Federal Pell Grant

........................................................................................... $

Grants from your state

..................................................................................

Other scholarships you can use ..................................................................

800

$ 800 / yr

Loan Default Rate

Percentage of borrowers

entering repayment and

defaulting on their loan

12%

What you will pay for the 2013-14 year

CCUS Average

Comparable Institutions

Net Costs

(Cost of attendance minus total grants and scholarships)

Options to pay net costs

Work options

Work-Study (Federal, state, or institutional) ....................................................

/ yr

$ 13,358

/ yr

Median Borrowing

Students at CCUS typically

borrow $5,012 in Federal

loans over 2 years. The

Federal loan payment over

10 years for this amount is

approximately $50 per month.

Your borrowing may be different.

Loan options*

Federal Perkins Loans ........................................................................................ $

Federal Direct Subsidized Loan

.........................................................................

Federal Direct Unsubsidized Loan ...................................................................

N/A

0 / yr

Repaying your loans

To learn about loan repayment choices

and work out your Federal Loan monthly

payment, go to: http://studentaid.ed.gov/

repay-loans/understand/plans

*Recommended amounts shown here. You may be eligible for a different amount. Contact your financial aid office.

Other options

Family Contribution

(As calculated by the institution using information reported on the FAFSA or to your institution.)

$ 4,792 / yr

For more information and next steps:

Community College of the United

States (CCUS) Financial Aid Office

123 Main Street

Anytown, ST 12345

• Payment plan offered by the institution

• Parent PLUS Loan

• Military and/or National Service benefits

• Non-Federal private education loan

Telephone: (123) 456-7890

E-mail: financialaid@ccus.edu

Customized information from CCUS

N/A denotes program in which CCUS does not participate

29%

NASFAA // No Clear Winner: Consumer Testing of Financial Aid Award Letters

University of the United States (UUS)

Lyn Smith, 222111

Costs in the 2013-14 year

Estimated Cost of Attendance for full-time enrollment

Tuition and fees

............................................................................................... $

Housing and meals

(off-campus) ......................................................................

Books and supplies .........................................................................................

13,938

9,752

1,048

$26,756 / yr

Graduation Rate

Percentage of full-time

students who graduate

within 6 years

71%

Transportation ..................................................................................................

Other educational costs .................................................................................

1,200

818

LOW MEDIUM HIGH

Grants and scholarships to pay for college

Total Grants and Scholarships (“Gift” Aid; no repayment needed)

Grants from your school ................................................................................. $

Federal Pell Grant

...........................................................................................

Grants from your state

...................................................................................

Other scholarships you can use ...................................................................

13,782

$ 13,782 / yr

Loan Default Rate

Percentage of borrowers

entering repayment and

defaulting on their loan

12%

What you will pay for the 2013-14 year

UUS Average

Comparable Institutions

Net Costs

(Cost of attendance minus total grants and scholarships)

Options to pay net costs

Work options

Work-Study (Federal, state, or institutional) ....................................................

1,806 / yr

$12,974

/ yr

Median Borrowing

Students at UUS typically

borrow $19,389 in Federal

loans over 4 years. The

Federal loan payment over

10 years for this amount is

approximately $190 per month.

Your borrowing may be different.

Loan options*

Federal Perkins Loans ........................................................................................ $

Federal Direct Subsidized Loan

.........................................................................

Federal Direct Unsubsidized Loan ...................................................................

0 / yr

5 , 5 0 0 / yr

Repaying your loans

To learn about loan repayment choices

and work out your Federal Loan monthly

payment, go to: http://studentaid.ed.gov/

repay-loans/understand/plans

*Recommended amounts shown here. You may be eligible for a different amount. Contact your financial aid office.

Other options

Family Contribution

(As calculated by the institution using information reported on the FAFSA or to your institution.)

$ 11,168 / yr

For more information and next steps:

University of the United States (UUS)

Financial Aid Office

123 Main Street

Anytown, ST 12345

• Payment plan offered by the institution

• Parent PLUS Loan

• Military and/or National Service benefits

• Non-Federal private education loan

Telephone: (123) 456-7890

E-mail: financialaid@uus.edu

Customized information from UUS

Letter A

No Clear Winner: Consumer Testing of Financial Aid Award Letters // NASFAA

Private University of the United States (PUUS)

Li Wong, 321123

Costs in the 2013-14 year

Estimated Cost of Attendance for full-time enrollment

Tuition and fees

............................................................................................... $

Housing and meals

(on-campus resident) ..........................................................

Books and supplies .........................................................................................

43,250

11,660

1,100

$ 58,310 / yr

Graduation Rate

Percentage of full-time

students who graduate

within 6 years

99%

Transportation ..................................................................................................

Other educational costs .................................................................................

989

1,311

LOW MEDIUM HIGH

Grants and scholarships to pay for college

Total Grants and Scholarships (“Gift” Aid; no repayment needed)

Grants from your school ................................................................................. $

Federal Pell Grant

...........................................................................................

Grants from your state

....................................................................................

Other scholarships you can use

....................................................................

32,600

1,000

$ 33,600 / yr

Loan Default Rate

Percentage of borrowers

entering repayment and

defaulting on their loan

What you will pay for the 2013-14 year

PUUS Average

Comparable Institutions

Net Costs

(Cost of attendance minus total grants and scholarships)

Options to pay net costs

Work options

Work-Study (Federal, state, or institutional) ....................................................

2,000 / yr

$ 24,710

/ yr

Median Borrowing

Students at PUUS typically

borrow $22,100 in Federal

loans over 4 years. The

Federal loan payment over

10 years for this amount is

approximately $217 per month.

Your borrowing may be different.

Loan options*

Federal Perkins Loans ........................................................................................ $

Federal Direct Subsidized Loan

.........................................................................

Federal Direct Unsubsidized Loan

...................................................................

4,000 / yr

3,500 / yr

0 / yr

Repaying your loans

To learn about loan repayment choices

and work out your Federal Loan monthly

payment, go to: http://studentaid.ed.gov/

repay-loans/understand/plans

*Recommended amounts shown here. You may be eligible for a different amount. Contact your financial aid office.

Other options

Family Contribution

(As calculated by the institution using information reported on the FAFSA or to your institution.)

$ 12,106 / yr

For more information and next steps:

Private University of the United

States (PUUS) Financial Aid Office

123 Main Street

Anytown, ST 12345

• Payment plan offered by the institution

• Parent PLUS Loan

• Military and/or National Service benefits

• Non-Federal private education loan

Telephone: (123) 456-7890

E-mail: financialaid@puus.edu

Customized information from PUUS

You are eligible to borrow a need-based institutional loan of $2,500 for the academic year.

Letter A

NASFAA // No Clear Winner: Consumer Testing of Financial Aid Award Letters

Letter A

Institute of the United States (IUS)

Tom Brown, 777666

Costs in the 2013-14 year

Estimated Cost of Attendance for full-time enrollment

Tuition and fees

............................................................................................... $

Housing and meals

(on-campus resident) ..........................................................

Books and supplies .........................................................................................

24,036

9,801

1,980

$ 37,875 / yr

Graduation Rate

Percentage of full-time

students who graduate

within 6 years

Transportation ..................................................................................................

Other educational costs .................................................................................

990

1,068

LOW MEDIUM HIGH

Grants and scholarships to pay for college

Total Grants and Scholarships (“Gift” Aid; no repayment needed)

Grants from your school ................................................................................. $

Federal Pell Grant ...........................................................................................

Grants from your state

....................................................................................

Other scholarships you can use

....................................................................

500

$ 500 / yr

Loan Default Rate

Percentage of borrowers

entering repayment and

defaulting on their loan

24%

15%

What you will pay for the 2013-14 year

IUS Average

Comparable Institutions

Net Costs

(Cost of attendance minus total grants and scholarships)

Options to pay net costs

Work options

Work-Study (Federal, state, or institutional) ....................................................

0 / yr

$ 37,375

/ yr

Median Borrowing

Students at IUS typically

borrow $24,200 in Federal

loans over 4 years. The

Federal loan payment over

10 years for this amount is

approximately $238 per month.

Your borrowing may be different.

Loan options*

Federal Perkins Loan

Federal Direct Subsidized Loan

........................................................................ $

Federal Direct Unsubsidized Loan

....................................................................

5,500

/ yr

4,750 / yr

Repaying your loans

To learn about loan repayment choices

and work out your Federal Loan monthly

payment, go to: http://studentaid.ed.gov/

repay-loans/understand/plans

*Recommended amounts shown here. You may be eligible for a different amount. Contact your financial aid office.

Other options

Family Contribution

(As calculated by the institution using information reported on the FAFSA or to your institution.)

$ 16,625/ yr

For more information and next steps:

Institute of the United States (IUS)

Financial Aid Office

123 Main Street

Anytown, ST 12345

• Payment plan offered by the institution

• Parent PLUS Loan

• Military and/or National Service benefits

• Non-Federal private education loan

Telephone: (123) 456-7890

Email: financialaid@ius.edu

Customized information from IUS

69%

No Clear Winner: Consumer Testing of Financial Aid Award Letters // NASFAA

Community College of the United States (CCUS)

John Jones, 987654

John Jones April 1, 2013

333 Main Street

Anytown, Massachusetts 02333

Congratulations on your acceptance to Community College of the United States! We are pleased to offer you the following financial assistance

for the 2013-2014 academic year. The awards assume you are an off campus student, enrolled full time. Please review the “Community College

of the United States Financial Aid Award Guide 2013-2014”

t www.ccus.edu/financialaidguide.xml for details about the terms, conditions, and

renewal criteria for the awards listed below, as well as information on next steps and deadlines to accept and receive your awards.

Gift Aid Fall 2013 Spring 2014 Totals

CCUS Grant $400 $400 $800

Federal Pell Grant $1,400 $1,400 $2,800

$1,800 $1,800 $3,600

Self-Help Options Fall 2013 Spring 2014 Totals

Federal Direct Subsidized Loan $1,

750 $

1,750 $3,500

Federal Direct Unsubsidized Loan $1,000 $1,000 $2,000

$2,750 $2,750 $9,100

Total All Awards: $4,550 $4,550 $9,100

The Cost of Attendance for one year is estimated to be $10,603. To help you plan for the year, we have enumerated below your total direct

costs (billed by the College) and indirect costs (not billed by the College, but estimated costs you may incur) minus your financial aid offered.

Direct Costs: Estimated Indirect Costs:

Tuition: $ 3,010 Books: $ 1,070

Transportation: $ 1,005

Miscellaneous: $ 2,972

Room and Board $ 2,546

Total Direct Costs: $ 3,010 Total Indirect Costs: $ 7,593

Net Direct Costs after Gift Aid: $-590

Net Total Costs (direct and indirect) after Gift Aid: $7,003

Net Total Costs after Gift Aid and Self-Help Options: $1,503

You should review any prior borrowing and research projected loan

debt a

nd repayment information prior to deciding to borrow for this year

at www.xxxxxx.gov. It is also important to understand your rights as a student consumer which are listed on CCUS’s website at

http://www.ccus.edu/x21972.xml. If you do not understand the meaning of any terms used in your award notification, please check our

CCUS Financial Aid Award Guide or link to www.studentaid.ed.gov/PORTALSW

ebApp/students/English/glossary.

jsp.

If you have questions about your awards, please do not hesitate to contact us at [email protected] or by calling Student Financial Services

at 111-123-4567. Congratulations and best wishes for a successful academic career!

Student Financial Services

300 Main Street, Small Town, MA 00001

Letter B

NASFAA // No Clear Winner: Consumer Testing of Financial Aid Award Letters

University of the United States (UUS)

Lyn Smith, 222111

Lyn Smith April 1, 2013

333 Main Street

Anytown, Massachusetts 02333

Congratulations on your acceptance to University of the United States! We are pleased to offer you the following financial assistance for

the 2013-2014 academic year. The awards assume you are an on campus resident, enrolled full time. Please review the “University of the

United States Financial Aid Award Guide 2013-2014” at www.uus.edu

/financialaidguide.xml for details about the terms, conditions, and

enewal criteria for the awards listed below, as well as information on next steps and deadlines to accept and receive your awards.

Gift Aid Fall 2013 Spring 2014 Totals

UUS Martin Scholarship $10,000 $10,000 $20,000

Self-Help Options Fall 2013 Spring 2014 Totals

Federal Direct Subsidized Loan $2,750 $2,750 $5,500

Total All Awards: $12,750 $12,750 $25,500

The Cost of Attendance for one year is estimated to be $50,572. To help you plan for the year, we have enumerated below your total direct

costs (billed by the College) and indirect costs (not billed by the College, but estimated costs you may incur) minus your financial aid offered.

Direct Costs: Estimated Indirect Costs:

Tuition: $ 37,754 Books: $ 1,048

Room and Board: $ 9,752 Transportation: $ 888

Miscellan

eous: $ 1

,130

Total Direct Costs: $ 47,506 Total Indirect Costs: $ 3,066

Net Direct Costs after Gift Aid: $27,506

Net Total Costs (direct and indirect) after Gift Aid: $30,572

Net Total Costs after Gift Aid and Self-Help Options: $25,072

You should review any prior borrowing and research projected loan debt and repayment information prior to deciding to borrow for this year

at www.xxxxxx.gov. It is also importa

nt to understand your rights as a student consumer which are listed on UUS’s website at

ttp://www.uus.edu/x21972.xml. If you do not understand the meaning of any terms used in your award notification, please check our UUS

Financial Aid Award Guide or link to www.studentaid.ed.gov/PORTALSWebApp/students/English/glossary.jsp.

If you have questions about your awards, please do not hesitate to contact us a

t [email protected] or by calling Student Financial Services

at 111-123-4567. Congratulations and best wishes for a successful academic career!

Student Financial Services

300 Main Street, Small Town, MA 00001

Letter B

No Clear Winner: Consumer Testing of Financial Aid Award Letters // NASFAA

Private University of the United States (PUUS)

Li Wong, 321123

Li Wong April 1, 2013

333 Main Street

Anytown, Massachusetts 02333

Congratulations on your acceptance to Private University of the United States! We are pleased to offer you the following financial

assistance for the 2013-2014 academic year. The awards assume you are an off campus resident, enrolled full time. Please review the

“Private University of the United States Financial Aid Award Guide 2013-2014”

t www.puus.edu/financialaidguide.xml for details about the

terms, conditions, and renewal criteria for the awards listed below, as well as information on next steps and deadlines to accept and receive

your awards.

Gift Aid Fall 2013 Spring 2014 Totals

PUUS Martin Scholarship $9,150 $9,150 $18,300

PUUS Study Abroad Scholarship $107 $107 $214

$9,257 $9,257 $18,514

Self-Help Options Fall 2013 Spring 2014 Totals

Federal

rk-Study $500 $500 $1,000

Federal Direct Subsidized Loan $2,750 $2,750 $5,500

PUUS Need-Based Private Loan $3,600 $3,600 $7,200

$6,850 $6,850 $13,700

Total All Awards: $16,107 $16,107 $32,214

The Cost of Attendance for one year is estimated to be $61,944. To help you plan for the year, we have enumerated below your total direct

costs (billed by the College) and indirect costs (not billed by the College, but estimated costs you may incur) minus your financial aid off

ered.

Direct Costs: Estimated Indirect Costs:

Tuition: $ 43,214 Books: $ 750

Room and Board $ 11,830 Transportation: $ 1,127

Miscellaneous: $ 5,023

Total Direct Costs: $ 55,044 Total Indirect Costs: $ 6,900

Net Direct Costs after Gift Aid: $36,530

Net Total Costs (direct and indirect) after Gift Aid: $43,430

Net Total Costs after Gift Aid and Self-Help Options: $29,730

You

should r

eview any prior borrowing and research projected loan debt and repayment information prior to deciding to borrow for this year

at www.xxxxxx.gov. It is also important to understand your rights as a student consumer which are listed on PUUS’s website at

http://www.puus.edu/x21972.xml. If you do not understand the meaning of any terms used in your award notification, please check our

PUUS Finan

cial A

id Award Guide or link to www.studentaid.ed.gov/PORTALSWebApp/students/English/glossary.jsp.

If you have questions about your awards, please do not hesitate to contact us at [email protected] or by calling Student Financial Services

at 111-123-4567. Congratulations and best wishes for a successful academic career!

Student Financial Services

300 Main Street, Small Town, MA 00001

Letter B

NASFAA // No Clear Winner: Consumer Testing of Financial Aid Award Letters

Institute of the United States (IUS)

Tom Brown, 777666

Tom Brown April 1, 2013

333 Main Street

Anytown, Massachusetts 02333

Congratulations on your acceptance to Institute of the United States! We are pleased to offer you the following financial assistance for

the 2013-2014 academic year. The awards assume you are an off campus resident, enrolled full time. Please review the “Institute of the

United States Financial Aid Award Guide 2013-2014” at www.ius.edu/

financialaidguide.xml for details about the terms, conditions, and

enewal criteria for the awards listed below, as well as information on next steps and deadlines to accept and receive your awards.

Gift Aid Fall 2013 Spring 2014 Totals

IUS Grant $5,359 $5,359 $10,718

State Grant $175 $175 $350

Federal Pell Grant $2,400 $2,400 $4,800

$7,934 $7,934 $15,868

Self-Help Options Fall 2013 Spring 2014 Totals

Federal Direct Subsi

dized Loan $

2,750 $2,750 $5,500

Federal Direct Unsubsidized Loan $2,625 $2,625 $5,250

$5,375 $5,375 $10,750

Total All Awards: $13,309 $13,309 $26,618

The Cost of Attendance for one year is estimated to be $41,289. To help you plan for the year, we have enumerated below your total direct

costs (billed by the College) and indirect costs (not billed by the College, but estimated costs you may incur) minus your financial aid off

ered.

Direct Costs: Estimated Indirect Costs:

Tuition: $ 24,036 Books: $ 1,980

Transportation: $ 917

Miscellaneous: $ 4,705

Room and Board $ 9,651

Total Direct Costs: $ 24,036 Total Indirect Costs: $ 17,253

Net Direct Costs after Gift Aid: $8,168

Net Total Costs (direct and indirect) after Gift Aid: $25,421

Net Total Costs after Gift Aid and Self-Help Options: $14,671

You should review any prior borrowing and res

earch p

rojected loan debt and repayment information prior to deciding to borrow for this year

at www.xxxxxx.gov. It is also important to understand your rights as a student consumer which are listed on IUS’s website at

http://www.ius.edu/x21972.xml. If you do not understand the meaning of any terms used in your award notification, please check our IUS

Financial Aid Award Guide or link to www.studenta

id.ed.gov/PORTA

LSWebApp/students/English/glossary.jsp.

If you have questions about your awards, please do not hesitate to contact us at [email protected] or by calling Student Financial Services at

111-123-4567. Congratulations and best wishes for a successful academic career!

Student Financial Services

300 Main Street, Small Town, MA 00001

Letter B

No Clear Winner: Consumer Testing of Financial Aid Award Letters // NASFAA

Community College of the United States (CCUS)

John Jones, 987654

Dear John Jones:

Congratulations on your acceptance to CCUS. We are pleased to offer you the following

financial assistance for the 2013-14 academic year. The costs and awards in this letter

assume you are enrolled full time and living off campus.

Estimated Cost of Attendance

Direct Costs (costs that are payable to the school):

• Tuition and fees..............................................................$3,010

Indirect Costs (estimates for expenses that you

an be expected to incur for living and other

educationally-related expenses):

• Room and board ............................................................$2,546

• Books & Supplies...........................................................$1,070

• Transportation ................................................................$1,002

• Miscellaneous ................................................................$2,975

Total Cost of Attendance: ..............................................$10,603

Gift Aid (no repayment needed)

• Federal Pell Grant..........................................................$4,900

• Federal Supplemental Educational Opportunity Grant .........$0

• State Grant.....................................................................$1,466

• Institutional Grant..................................................................$0

• Private Scholarships and Grants ..........................................$0

Total Gift and Scholarship Aid..........................................$6,366

Direct Costs After Gift Aid:..........................................................$0 ($ 3,010 minus $6,366)

Total Estimated Cost of Attendance After Gift Aid:............$4,237 ($10,603 minus $6,366)

Financing Options:

Student Work Options

• Federal Work-Study ..............................................................$0

• State Work-Study..................................................................$0

• VA Work-Study ......................................................................$0

Student Loans

• Federal Direct Subsidized Loan........................... up to $3,500

• Federal Direct Unsubsidized Loan.......................... up to $737

Parent Loans

• Federal Parent

PLUS Loan: up to remaining costs, see www.ccus.edu/student for more

nformation

No Fee 9 Month Payment Plan

NEXT STEPS

www.ccus.edu/student and

indicate which forms of financial

aid you will accept. Additional

important consumer information

about CCUS can be found at

www.ccus.edu/consumer.

ADDITIONAL RESOURCES

• U.S. Department of Education

Student Loan Database:

www.nslds.ed.gov

• U.S. Department of Education

Loan Repayment Calculator &

Interest Rates:

www.direct.ed.gov/calc.html

• U.S. Department of Education

Glossary of Financial Aid

Terms:

studentaid.ed.gov/glossary

• Terms and Conditions of

Federal Student Loans:

studentaid.ed.gov/types/loans

Letter C

QUESTIONS?

Contact the CCUS Financial

Aid Office at

[email protected]

www.ccus.edu/financialaid

NASFAA // No Clear Winner: Consumer Testing of Financial Aid Award Letters

University of the United States (UUS)

Lyn Smith, 222111

Dear Lyn Smith:

Congratulations on your acceptance to UUS. We are pleased to offer you the following

financial assistance for the 2013-14 academic year. The costs and awards in this letter

assume you are enrolled fulltime and living off campus.

Estimated Cost of Attendance

Direct Costs (costs that are payable to the school):

• Tuition and fees............................................................$39,386

Indirect Costs (estimates for expenses that you ca

n b

e expected to incur for living and other

educationally-related expenses):

• Room and board ............................................................$9,752

• Books & Supplies...........................................................$1,048

• Transportation ................................................................$1,004

• Miscellaneous ................................................................$1,014

Total Cost of Attendance: ..............................................$52,204

Gift Aid (no repayment needed)

• Federal Pell Grant.................................................................$0

• Federal Supplemental Educational Opportunity Grant .........$0

• University Scholarship..................................................$11,000

• Institutional Grant..................................................................$0

• Private Scholarships and Grants ..........................................

Total Gift and Scholarship Aid........................................$11,000

Direct Costs After Gift Aid:.................................................$28,386 ($39,386 minus $11,000)

Total Estimated Cost of Attendance After Gift Aid:..........$41,204 ($52,204 minus $11,000)

Financing Options:

Student Work Options

• Federal Work-Study ..............................................................$0

• State Work-Study..................................................................$0

• VA Work-Study ......................................................................$0

Student Loans

• Federal Direct Subsidized Loan........................... up to $5,500

Parent Loans

• Federal Parent PLUS Loan: up to remaining costs,

see www.uus.edu/student for more

nformation

No Fee 9 Month Payment Plan

NEXT STEPS

www.uus.edu/student and

indicate which forms of financial

aid you will accept. Additional

important consumer information

about UUS can be found at

www.uus.edu/consumer.

ADDITIONAL RESOURCES

• U.S. Department of Education

Student Loan Database:

www.nslds.ed.gov

• U.S. Department of Education

Loan Repayment Calculator &

Interest Rates:

www.direct.ed.gov/calc.html

• U.S. Department of Education

Glossary of Financial Aid

Terms:

studentaid.ed.gov/glossary

• Terms and Conditions of

Federal Student Loans:

studentaid.ed.gov/types/loans

QUESTIONS?

Contact the UUS Financial Aid

Office at

[email protected]

www.uus.edu/financialaid

Letter C

No Clear Winner: Consumer Testing of Financial Aid Award Letters // NASFAA

Private University of the United States (PUUS)

Li Wong, 321123

Dear Li Wong:

Congratulations on your acceptance to PUUS. We are pleased to offer you the following

financial assistance for the 2013-14 academic year. The costs and awards in this letter

assume you are enrolled fulltime and living off campus.

Estimated Cost of Attendance

Direct Costs (costs that are payable to the school):

• Tuition and fees............................................................$43,250

Indirect Costs (estimates for expenses that you can

e expected to incur for living and other

educationally-related expenses):

• Room and board ..........................................................$11,660

• Books & Supplies...........................................................$1,101

• Transportation ...................................................................$990

• Miscellaneous ................................................................$1,311

Total Cost of Attendance: ...............................................$58,311

Gift Aid (no repayment needed)

• Federal Pell Grant..........................................................$4,200

• Federal Supplemental Educational Opportunity Grant .....$600

• State Need-Based Scholarship......................................$4,300

• Institutional Scholarship ...............................................$18,600

• Gates Millen

ium Scholarship ...

....................................$29,281

Total Gift and Scholarship Aid........................................$56,981

Direct Costs After Gift Aid:..........................................................$0 ($43,250 minus $56,981)

Total Estimated Cost of Attendance After Gift Aid:............$1,330 ($58,311 minus $56,891)

Financing Options:

Student Work Options

• Federal Work-Study ..............................................................$0

• State Work-Study..................................................................$0

• VA Work-Study ......................................................................$0

Student Loans

• Federal Direct Subsidized Loan.................................. up to $0

Parent Loans

• Federal Parent PLUS Loan: up to remaining costs, see www.pu

us.edu/student for more

nformation

No Fee 9 Month Payment Plan

NEXT STEPS

www.puus.edu/student and

indicate which forms of financial

aid you will accept. Additional

important consumer information

about PUUS can be found at

www.puus.edu/consumer.

ADDITIONAL RESOURCES

• U.S. Department of Education

Student Loan Database:

www.nslds.ed.gov

• U.S. Department of Education

Loan Repayment Calculator &

Interest Rates:

www.direct.ed.gov/calc.html

• U.S. Department of Education

Glossary of Financial Aid

Terms:

studentaid.ed.gov/glossary

• Terms and Conditions of

Federal Student Loans:

studentaid.ed.gov/types/loans

QUESTIONS?

Contact the PUUS Financial

Aid Office at

[email protected]

www.puus.edu/financialaid

Letter C

NASFAA // No Clear Winner: Consumer Testing of Financial Aid Award Letters

Institute of the United States (IUS)

Tom Brown, 777666

Dear Tom Brown:

Congratulations on your acceptance to IUS. We are pleased to offer you the following

financial assistance for the 2013-14 academic year. The costs and awards in this letter

assume you are enrolled fulltime and living off campus.

Estimated Cost of Attendance

Direct Costs (costs that are payable to the school):

• Tuition and fees............................................................$24,036

Indirect Costs (estimates for expenses that you ca

n b

e expected to incur for living and other

educationally-related expenses):

• Room and board ............................................................$2,472

• Books & Supplies...........................................................$2,220

• Transportation ................................................................$1,248

• Miscellaneous ................................................................$4,374

Total Cost of Attendance: ..............................................$34,350

Gift Aid (no repayment needed)

• Federal Pell Grant..........................................................$5,550

• Federal Supplemental Educational Opportunity Grant .........$0

• State Grant........................................................................$720

• Institutional Grant..............................................................$500

• Private Scholarships and Grants ..........................................$0

Total Gift and Scholarship Aid..........................................$6,770

Direct Costs After Gift Aid:.................................................$17,266 ($24,036 minus $6,770)

Total Estimated Cost of Attendance After Gift Aid:..........$27,580 ($34,350 minus $6,770)

Financing Options:

Student Work Options

• Federal Work-Study ..............................................................$0

• State Work-Study..................................................................$0

• VA Work-Study ......................................................................$0

Student Loans

• Federal Direct Subsidized Loan........................... up to $5,500

• Federal Direct Unsubsidized Loan....................... up to $3,000

Parent Loans

• Feder

al Parent PLUS Loan: up to remaining costs, see www.uus.edu/student for more

nformation

No Fee 9 Month Payment Plan

NEXT STEPS

www.ius.edu/student and

indicate which forms of financial

aid you will accept. Additional

important consumer information

about IUS can be found at

www.ius.edu/consumer.

ADDITIONAL RESOURCES

• U.S. Department of Education

Student Loan Database:

www.nslds.ed.gov

• U.S. Department of Education

Loan Repayment Calculator &

Interest Rates:

www.direct.ed.gov/calc.html

• U.S. Department of Education

Glossary of Financial Aid

Terms:

studentaid.ed.gov/glossary

• Terms and Conditions of

Federal Student Loans:

studentaid.ed.gov/types/loans

QUESTIONS?

Contact the IUS Financial Aid

Office at

[email protected]

www.ius.edu/financialaid

Letter C

No Clear Winner: Consumer Testing of Financial Aid Award Letters // NASFAA

Financial Aid Award Letter Focus Group Questionnaire: High School Students

Please provide some basic information about yourself below:

1. First name:

2. Are you planning to apply to college this year?

Yes

3. To which type of institution(s) are you planning to apply? (Please check all that apply)

Community College

Four-year Public University

Four-year Private Liberal Arts College

For-prot Institution (i.e., DeVry, U. Phoenix)

Other :

4. How many college applications are you planning to submit?

5. Are you planning to apply for nancial aid?

Yes

6. What type(s) of nancial aid do you think you will need to cover the cost of college?

Federal Pell Grant

nstitutional grants/scholarships

Loans (federal or private)

Work-study (federally-funded)

Other :

7. Please provide any comments about your nancial aid application experiences so far:

The remaining questions refer to the nancial aid award letter products you have just reviewed.

Please respond to the best of your ability based on your initial impressions.

8. Please respond to the following questions about the amounts presented in each scenario:

Letter A Letter B Letter C

a) What is the total cost of attendance in each scenario before

any nancial aid is taken into account?

b) How much does each letter estimate the student will spend

on indirect expenses?

c) How much grant or scholarship aid is available in each

scenario? (i.e., gift aid that does not need to be repaid)

d) How much would the student in each scenario owe the

institution after taking into account grants and scholarships?

(i.e., aid that does not need to be repaid)

e) How much remaining cost would the student need to cover

in non-grant aid (i.e. loans, work-study) or other resources

(i.e., cash payments, etc.)?

Appendix C: Sample Questionnaire

NASFAA // No Clear Winner: Consumer Testing of Financial Aid Award Letters

9. Please answer the following about each letter:

Letter A Letter B Letter C

a) Is the student in each scenario being offered enough

Yes

nancial aid to cover direct costs?

b) Is the student in each scenario being offered enough

Yes

nancial aid to cover all direct and indirect costs?

10. Please rate each letter on the following (1=Strongly Agree, 2=Agree, 3=Disagree, 4=Strongly Disagree)

Letter A Letter B Letter C

a) The letter is clear and

easy to understand

b) A student would be able

to make an informed

decision about his/her

school nances after

reading this letter

c) The letter clearly states

where to nd additional

information about the

nancial aid process

11. In your opinion, which of the three letters do you

Letter A

Letter B

Letter C

think is the most clear and easy to understand?

No Clear Winner: Consumer Testing of Financial Aid Award Letters // NASFAA

Intro:

Thank you all for taking the time to participate in this focus group today. I am with JBL Associates, an independent

research rm based outside of Washington, DC, and we are conducting this focus group on behalf of a national

education association. The purpose of this study is to collect your feedback on three different nancial aid award

letters. The information you provide will play an important role in helping us advocate for the most useful and

easy-to-understand nancial aid award letter for students like you.

First, we are going to ask you to independently review 3 different award letters, and answer some written

questions about each letter. Then, we will come together as a group to discuss your impressions of each letter

and some of the specic concepts in each letter.

Please note:

• The scenarios presented in each letter are typical nancial aid awards from these types of institutions (we

didn’t make up the numbers).

• We will ask for your rst names and some information about where you are (or your student is) in the college

application process during the focus group, but want to assure you that no personally identifying individual

information about you or the school will be used in the nal report.

• We are not nancial aid advisors, but would be happy to refer you to additional help for your nancial aid

process and will be able to answer the questions we are presenting to you about nancial aid concepts after

we’ve concluded the focus group.

Ice Breaker:

High School Seniors/Parents

• Please tell us your rst name, and which college(s)/universities you are thinking of applying to.

• What do you estimate will be the total cost of attendance for you next year? How will you pay?

College students/Parents

• Please tell us your rst name and you (or your student’s) year in school

• Did you consider information about nancial aid when deciding to enroll here? What other factor(s)

did you consider?

Before we move forward, is everyone here familiar with the concept of nancial aid? Do you have a general

understanding of the nancial aid process? Please don’t hesitate to ask if you have any questions at the end.

Scoring Sheet Instructions:

Please take about 25 minutes total, or approximately 5 minutes to carefully review

each letter and 10 additional minutes to complete the questionnaire. I will then ask you to come together as a

group with your responses. Please do not hesitate to ask if you have any questions.

Focus group instructions:

Thank you for taking the time to complete the questionnaire. Now we will discuss the

3 letters as a group.

Specic award letter questions:

1. What did you think of the three products you just reviewed? You may refer to your scoring sheets.

Prompt if needed:

a. What did you like/not like about each product?

b. Which did you nd to be the most helpful/clear?

c. What information do you think is necessary to include in each letter? Which information do you think

you would read if it came in the mail? Would these letters be read if sent by email rather than mail?

Appendix D: Focus Group Protocol

NASFAA // No Clear Winner: Consumer Testing of Financial Aid Award Letters

2. What do you think is the purpose of each letter?

a. Letter A

b. Letter B

c. Letter C

I’m going to ask some specic questions about the nancial aid scenario in each letter. Please refer back to

each letter.

3. Can you explain what are direct and indirect costs? What items are included in each? Do you think it is

important to know the difference? Which letter explained this best?

4. What nancial aid options are available to the student in each scenario:

a. Letter A

b. Letter B

c. Letter C

5. Can you explain what are scholarships and loans? Do you think it is important to know the difference? Which

letter explained this best? What are examples of other types of aid?

6. What is the total amount of loans available to the student in each scenario:

a. Letter A

b. Letter B

c. Letter C

7. Do you know the difference between subsidized and unsubsidized loans? If so, how? If not, where would you

go to nd this information?

8. How much does the student owe in each scenario when grants and scholarships are taken into account?

a. Letter A

b. Letter B

c. Letter C

9. Do you know whether the cost and aid estimates presented in each letter are based on full-time or part-time

attendance?

a. Letter A

b. Letter B

c. Letter C

10. Do you understand the meaning of the term “net cost”? If so, how do you know this – from reading the

letters or another source? Have you come across this term before?

o If no response: What do you think this means? Can you understand by reading any of the letters? If

so, which?

11. Letter A provides some additional information about the institution – graduation rates, loan default rates,

and median borrowing. Do you understand these terms? Do you nd this information to be useful in your

decision making? What about this information is/is not useful? When do you think would be most useful

to obtain this type of information (before/after nancial award letter)? Do you know where else to nd this

type of information?

No Clear Winner: Consumer Testing of Financial Aid Award Letters // NASFAA

12. Is there anything else you would like to know about nancial aid options or the institution that is not included

in each letter?

13. How would you improve each letter?

14. Based on the information provided in each letter, where would you go next for additional information?

Follow-up questions:

High School Seniors/Parents

• What information about nancial aid have you received already, if any? What have you found to be

helpful?

• Will the cost of attendance be a determining factor in where you/your student enrolls?

First-year students/Parents

• What did you recall to be helpful in the nancial aid award letter you received? What was most

confusing? Was any information not included that would have been helpful? Do you see anything

about these letters that is more or less helpful than what your received?

• What additional sources (other than the institution’s nancial aid letter), if any, did you use to learn

about nancial aid?

• Is anything still unclear about your nancial aid package?

Closing

We thank you all for taking the time to meet with us today and share your impressions about each letter. The

information you provided today will enable us to better advocate for you to make the nancial aid process

easier to understand. We will share the results of this study with your school/institution (or your child’s). Please

let us know if you have any questions or concerns about the nancial aid process, individually if you do not feel

comfortable as a group, and we would be glad to point you in the right direction. You can reach us at (write

contact information on white board).

NASFAA // No Clear Winner: Consumer Testing of Financial Aid Award Letters

Baum, S., & Ma, J. (2012). Trends in college pricing 2012. College Board Advocacy & Policy Center. Retrieved

from http://trends.collegeboard.org/sites/default/les/college-pricing-2012-full-report_0.pdf

Baum, S., & Payea, K. (2012). Trends in student aid 2012. College Board Advocacy & Policy Center. Retrieved

from http://trends.collegeboard.org/sites/default/les/student-aid-2012-full-report.pdf

Berg, B.L. (1989). Qualitative research methods for the social sciences. Boston, MA: Pearson.

The Bill & Melinda Gate Foundation. (2012). Reimagining aid design & delivery project. Retrieved from:http://

www.gatesfoundation.org/postsecondaryeducation/Pages/reimagining-aid-design-delivery-project.aspx.

Head, A. J., & Eisenberg, M. B. (2011, June 3). College students eager to learn but need help negotiating

information overload. The Seattle Times. Retrieved from http://seattletimes.com/html/opinion/2015227485_

guest05head.html

Marshall, C., & Rossman, G. B. (2006). Designing qualitative research. Thousand Oaks, CA: Sage Publications.

Morgan, J. M., & Dechter, G. (2012). Improving the college scorecard: Using student feedback to create an

effective disclosure. Washington, DC: Center for American Progress.

NASFAA (2012). Response to CFPB “Shopping Sheet.” Washington, DC: author. Retrieved from http://www.

nasfaa.org/EntrancePDF.aspx?id=8175

NASFAA (2013). Reimagining nancial aid to improve student access outcomes. Washington, DC: author.

Retrieved from http://www.nasfaa.org/radd-event/

Snyder, T.D., & Dillow, S.A. (2012). Digest of education statistics 2011 (NCES 2012-001). Washington, DC:

National Center for Education Statistics.

Supiano, B. (2013). Straight answers on paying for college: Still too little, too late. Chronicle of Higher Education.

Retrieved from http://chronicle.com/article/For-Parents-Straight-Answers/136955/

United States Department of Education (ED) (2008). National Center for Education Statistics, 2007-08 National

Postsecondary Student Aid Study (NPSAS:08) [Data le]. Retrieved from http://nces.ed.gov/datalab/

United States Department of Education (ED) (2012, July 24). College costs transparency press conference call.

Retrieved from www2.ed.gov/news/av/audio/2012/07242012.doc

Appendix E: References

1101 CoNNeCTiCuT aVeNue NW, suiTe 1100

WashiNgToN, dC 20036-4303

202.785.0453 faX. 202.785.1487 WWW.Nasfaa.org

About NASFAA

The National Association of Student Financial Aid

Administrators (NASFAA) is nonprofit membership

organization that represents more than 17,000 nancial

aid administrators who serve more than 16 million

postsecondary students each year. Our membership spans

more than 3,000 colleges and universities from across the

nation. Collectively, NASFAA institutions serve 97 percent

of all federal student aid recipients.

About JBLA

JBL Associates, Inc. (JBLA) specializes in providing high-

quality research and analysis to the education community.

For over 30 years, JBLA has produced relevant and

responsible research and analysis with a client-centered

approach. We work with a wide variety of clients to

meet their needs in a range of areas, including: education

policy assessment, program development and evaluation,

policy research, data collection and analysis, and strategic

planning.