It happens every spring: Families receive financial aid offers from colleges, puzzle over them and are still left with the question — how much will this college actually cost me?
Instead of stating how much a family must pay out of pocket, some letters use jargon like “total net expenses” or “total net and indirect cost.” Different colleges calculate a student’s out-of-pocket costs differently and, because the letters come in hundreds of formats, families can struggle to determine which institution is most affordable. Sometimes the letters don’t reveal the high interest rates behind the loans they list or that families might not qualify for them. This can leave students on the hook for a lot more money — or deeper in debt — than they expected.
For over a decade, student advocates have lobbied Congress for a fix, and last year a bipartisan bill gained momentum. It required colleges to use a uniform financial aid offer letter and uniform definitions for costs, so families could know what they would owe — and which school offered the best deal. Student advocates liken the requirement to nutrition labels — the federal government would step in to ensure consumers understand what they are getting.
But what seemed like a straightforward effort to simplify comparing college costs — one that initially drew rare agreement from politicians and advocates on the right and left — was changed this week in ways that frustrated student advocates. A revised bill, introduced Wednesday, requires that colleges use the same definitions for loans, grants and total cost. But after college associations lobbied against the standard letter, politicians who had previously supported the requirement stripped it away. In fact, the new bill specifically prevents the Education Department from requiring a standard offer letter and allows colleges to provide links to websites for some information, rather than including full details in the letter itself. In addition, student advocates worry that the revised bill would make it easier for colleges to offer private loans, which provide students with fewer protections.
“They made a lot of changes that didn’t center students and instead went in favor of the industry and the higher ed associations,” said Rachel Fishman, director of higher education at the liberal policy group New America. “There could have been some kind of compromise, but it went way too far in the direction of the institutions.”
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The attempt to change the original bill, known as “Understanding the True Cost of College Act,” puzzled student advocates because Congress and members of the Trump administration have both argued that colleges need to be held to account. Last summer, Congress limited student loan eligibility, so colleges could lose federal funding if their graduates don’t earn enough. Many advocates believed that standardizing financial aid letters was the best way to protect students and were surprised when Sen. Bill Cassidy, the Louisiana Republican who chairs the Senate Health, Education, Labor and Pensions Committee, proposed an amendment to alter it. Over a dozen student advocacy groups wrote a letter protesting the changes, while college associations praised Cassidy’s version, the Improving Financial Aid Offers for Students Act.
Cassidy’s office did not respond to requests for comment. Aides to Sen. Charles Grassley, the Iowa Republican who sponsored the original bill, said he would support the new version since it maintains requirements that colleges use the same definitions for key terms and that all up-front costs be listed on offers.
Some conservative advocates supported keeping the uniform offer letter.
“I am 100 percent in favor of using a formal standard letter. This is what we do for mortgages; if you are getting money from the federal government, they should be able to dictate what that looks like,” said Preston Cooper, a senior fellow with the American Enterprise Institute, a conservative think tank. “There are very serious abuses and ways of listing prices and loans that are deceptive.”
College associations, meanwhile, say they agree that offer letters should use the same terminology but that a uniform approach would prevent their members from crafting offer letters that cater to particular students they’re enrolling. For example, community colleges usually don’t require loans, while research universities often do. They support the new bill and point to an initiative they are leading that promotes standards for offer letters and helps schools make the letters clear to families. More than 750 of the nation’s roughly 4,000 colleges are using the initiative’s principles so far, according to Emmanual Guillory, senior director of government relations at the American Council on Education, which represents colleges and leads the transparency initiative.
“Every institution is different. They don’t offer the same programs, they don’t have the same mission, they’re not the same size, they don’t serve the same students,” said Guillory. “So how are you going to have one mandatory offer letter that’s the exact same when institutions offer different types of aid?”
Related: How much will that college cost you? Good luck figuring it out
Advocates argue that the difference between institutions is one reason why the letters should be uniform, since that lack of clarity can put students in a bind. Jean Aimable applied to more than a dozen colleges last year, looking for a school with quality academic programs and where he wouldn’t end up in debt. Brandeis University seemed to fit the bill: The offer letter he received showed that he wouldn’t need loans, though he would need a work-study job.
But when he arrived on the Waltham, Massachusetts, campus and applied to more than half a dozen work-study positions, none was available. “I couldn’t get one,” said Aimable, who graduated high school in the commonwealth. “Even though it shows up on your federal aid letter, it’s not money that you’re necessarily going to have.”
Last fall, he had to scramble to secure a loan to cover the gap.
A Brandeis spokesperson said it participates in the college association’s transparency initiative and that its letters provide hyperlinks with information about its work-study program. The university’s website does say that work-study jobs aren’t guaranteed, but it’s on an FAQ page inside one of 16 drop-down menus. Student advocates argue that all information related to how much a student will owe should be on the letter itself clearly displayed.
“We are constantly refining our letters and outreach to ensure students have the most accurate and helpful information possible,” the Brandeis spokesperson, Michelle Gaseau, wrote in an email.
In 2022, the federal government issued a damning report about college offer letters, finding 91 percent of schools understate or don’t include the net price families will pay in their offer letters. This could lead students to “make uninformed and costly decisions, such as enrolling in an unaffordable college,” the Government Accountability Office declared, adding that “further congressional action would be necessary to ensure that all students receive the information they need in their financial aid offers.”
A report released in December by uAspire, a nonprofit that advocates for college affordability, found 11 different ways that colleges calculated the final cost to a student. Some subtracted grants and scholarships from tuition, while others subtracted grants and loans from the entire cost of attendance (which includes housing and meals). While the authors found some improvements since a 2018 report they helped write on the subject, they concluded that the lack of a uniform way to calculate and present costs was causing significant problems for students.
“There’s a need to be able to make a comparison between institutions so students can weigh the pros and cons of the schools with a clear sense of the finances,” said Anika Van Eaton, vice president of policy at uAspire and one of the report’s authors.
Related: Why are prices rising more for low-income students than their higher-income peers?
The burden of decoding letters can be greatest for students who are the first in their families to go to college. For Aliah Ramos, like many students, the choice for college came down to affordability, and it was difficult to figure that out on her own.
“Not coming from a family that knows really what the FAFSA was, not knowing how to analyze financial aid offers or even how to apply for college — I needed to find people to help me with the letters,” said Ramos, a freshman at the University of Massachusetts Lowell, referring to the Free Application for Federal Student Aid.
The associations say they worry that enshrining a uniform letter in law could make any future changes, whether due to technological advancements or new loan programs, very difficult.
The original bill appears unlikely to advance in this Congress. If Sen. Cassidy’s bill passes, it will have to be reconciled with a separate effort to reform offer letters that is advancing in the House.
It remains to be seen whether next spring, families of graduating high schoolers will still be stuck puzzling over offer letters and wondering which college they can afford.
Contact senior investigative reporter Meredith Kolodner at kolodner@hechingerreport.org or on Signal: @merkolodner.04.
This story about financial aid was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for the Hechinger newsletter.
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