NCSL Urges Passage of Legislation to Standardize Financial Aid Offer Letters

NCSL Urges Passage of Legislation to Standardize Financial Aid Offer Letters

• The Honorable Bill Cassidy
  Chair, Senate Committee on Health, Education, Labor and Pensions
  Washington, DC 20510
• The Honorable Bernie Sanders
  Ranking Member, Senate Committee on Health, Education, Labor and Pensions
  Washington, DC 20510
• The Honorable Tim Walberg
  Chair, House Committee on Education and Workforce
  Washington, DC 20515
• The Honorable Bobby Scott
  Ranking Member, House Committee on Education and Workforce,
  Washington, DC 20515

Dear Chairman Cassidy, Ranking Member Sanders, Chairman Walberg and Ranking Member Scott,

On behalf of the National Conference of State Legislatures, the bipartisan organization representing the legislatures of our nation's states, territories, commonwealths and Washington, D.C., we write encouraging you to pass legislation that would create standardized terminology and content for financial aid offer letters made to students by colleges and universities.

College is one of the most significant and expensive decisions that families make, yet it can be difficult and time-consuming for students to understand and compare the actual price they will pay when receiving financial aid offer letters.

NCSL acknowledges that the higher education pricing model has become opaque and complicated. Even as the "sticker" price of tuition continues to rise, net prices-the actual price students pay-at public institutions have meaningfully declined in recent years and are comparable to net prices from two decades ago. Keeping net prices in check has been achieved through an ever-complicated combination of state, federal, institutional grant aid and private scholarships. This is good news, yet students would hardly know it.

A GAO study found that less than 10% of financial aid offer letters accurately estimated the net price students would pay. Even worse, more than 40% of letters didn't include an estimate of net price at all. The same study found significant inconsistencies in how institutions communicate financial aid offers. For example, some universities do not distinguish between student loans and grant aid.

NCSL believes compelling rationale exists for federal policy on standardized financial aid award letters, especially as nearly every institution in the country accepts federal financial aid. Students should be able to make clear comparisons of the financial aid offered to them as they decide where to enroll. As students commonly enroll across state lines, especially through distance education programs, a standardized financial aid award letter across institutions would best facilitate student understanding of the financial support available to them.

NCSL urges Congress to pass bipartisan legislation this session that would bring much-needed clarity to financial aid offer letters through standardized terminology and content. We recommend that any congressionally authorized initiative to create a model financial aid offer letter be informed by state perspectives, especially state financial aid offices.

Legislation to standardize financial aid offer letters has been proposed since 2012 and enjoyed longstanding bipartisan support. With the ongoing reforms to student financial aid ushered in through the One Big Beautiful Bill Act, there is no better time to pass legislation to help students navigate the complex and evolving landscape of financial aid.

Thank you for your consideration.

Sincerely,

Tim Storey
Chief Executive Officer
National Conference of State Legislatures

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