Dive Summary:
- The U.S. Department of Education has drafted the preferred format for a financial aid letter after their contention that most universities' financial aid letters for prospective students are designed to mislead.
- Under the guise of awarding full financial assistance, schools include loans in amounts they know are unaffordable for the families of prospective students.
- For example, schools such as St. John's and Pace University offer the majority of their assistance in Parent Plus loans, which are available in any amount after a simple credit check that does not establish whether families actually have the funds to pay back the loans.
From the article:
"The financial aid award letters that colleges send to prospective students can be confusing: Many mix grants, scholarships and loans all under the heading of 'Award,' 'Financial Assistance,' or 'Offered Financial Aid.' Some schools also suggest loans in amounts that families can't afford.
Take Parent Plus loans, a federal program that allows families to take out as much as they need, after other aid is applied, to pay for their children's college costs. As we recently reported with the Chronicle of Higher Education, Plus loans are remarkably easy to get. With minimal underwriting and no assessment of whether parents can actually afford the loans, families can end up overburdened by debt. ..."
