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Financial aid award letters
Duke University, which advocates praise for helping low-income students decipher financial-aid offers. Credit: Duke University

Raised in foster care from the time he was 14, Marquell Moorer was determined to go to college, keeping up his grades and working part-time at Dairy Queen to save up money for it.

By the end of his senior year in high school, he’d done so well that letters of acceptance started pouring in from not one or two, but 12 colleges and universities.

Moorer was still riding high when another wave of letters started to arrive: the ones outlining how much financial aid he would or would not be offered by each school.

And those proved a lot less clear-cut.

“They’ll tell you they’re going to give you all this money, but it turns out to be a loan,” he said. “They’ll tell you the award and they’ll let you know the tuition, but not the activities fees, travel, books — how much you need to live. They’ll include work-study in their financial-aid awards, but they don’t tell you you’re not guaranteed a job.”

With no parents or friends who had gone to college, and scant support from his high school in Milwaukee, Moorer was lucky: He found a coach from an organization called College Possible, which helps low-income students navigate the obstacle course of admissions and financial aid.

“Even with my coach, it was difficult to figure out,” said Moorer. “For a student who is first-generation and doesn’t have a coach, it has to be very, very frustrating.”

Financial aid offers from some universities and colleges, now landing in mailboxes around the country, are worse than frustrating, many critics say: they’re misleading, crafted in a way that makes them look more appealing than they are, and hard to compare with offers from competing schools.

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That’s because, among other reasons, universities and colleges need to fill seats at a time of declining enrollment.

“Students and families don’t necessarily question much,” said Christine Roque, advising manager at uAspire, which also counsels low-income students about how to pay for higher education. “They think, the college must have my best interests in mind, and they don’t necessarily see them as businesses. There’s that sense of trust.”

“Students and families don’t necessarily question much. They think, the college must have my best interests in mind.”

The letters sometimes begin with words such as “Congratulations,” but go on to outline financial aid that consists almost entirely of loans that have to be repaid. Loans are described as “awards.” The letters will list an “expected family contribution” of 0, not accounting for those parent or student loans, which, in fact, eventually require a substantial family contribution.

Work-study money is commonly promised as part of a financial-aid package, even though work-study jobs or earnings can’t be guaranteed. And while that and the total amount of financial aid a university or college is offering might be listed, the cost of attendance often is not, complicating the process of understanding how much families will have to pay.

The letters use technical jargon and abbreviations even families with experience in financial matters are unlikely to understand, such as “Unsub Staff” to refer to unsubsidized Stafford federal loans. One alludes bafflingly to something called “credit-based alternative loans.”

When Bob Giannino, uAspire’s CEO, showed some of these financial-aid offers to the organization’s board of directors — which includes venture capitalists, PhDs, a top executive at a global bank, and a partner at an international accounting firm —“they were all flummoxed,” he said. “So imagine if you’re the first in your family to go to college, maybe English is your family’s second language. It’s a pretty huge challenge.”

Such practices only worsen the trillion-dollar student debt crisis, critics say, forcing families to borrow even more to fill the gaps they thought had been closed by their financial aid package. In some cases, say these critics, unanticipated costs drive students to drop out.

Related: Colleges appeal to Congress to cut regulations they say drive up costs

That’s to say nothing of other little-known practices that affect what students get. When some colleges and universities learn that students have won scholarships from outside organizations, for example, they reduce their own promised financial aid by an equivalent amount, according to a report by the National Scholarship Providers Association.

Repeated attempts to improve financial-aid offer letters have made little difference. U.S. Senator Al Franken, D-Minnesota, introduced a bill in Congress two years ago to create a standardized letter so students could compare financial aid. It was referred to a Senate committee, where it stalled.

“Knowing exactly how much college is going to cost should be as simple as knowing how many calories there are in a slice of bread,” said Franken.

And while the U.S. Department of Education and Consumer Financial Protection Bureau did create a standardized form called the Shopping Sheet, it’s optional, not mandatory, and advocates and universities alike complain it’s too restrictive.

The Shopping Sheet requires schools that don’t have dorms or dining halls, for instance, to estimate the cost of housing and food for students who live off campus, which the schools say creates an inexact comparison.

It was three years ago that a task force on this topic set up by the National Association of Student Financial Aid Administrators, or NASFAA, urged changes to financial-aid notifications, saying that “a well-presented, easy-to-understand financial-aid award notice is critical and should be a top priority” for financial-aid offices.

But Douglas Levy, director of financial aid at Macomb Community College in Michigan, who chaired that committee, said, “I can’t say that I’ve seen much movement” since then.

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Some financial-aid offer letters, Levy said, still look like they’re “not exactly as upfront” as possible. “Whether that’s intentional or not, I can’t get into the colleges’ heads, but it’s selective in terms of what information you give students to put you in the best light. There’s no doubt about it, it’s used for marketing. It’s used to make a case that you can afford that school.”

Now, with little fanfare, NASFAA has unveiled a code of conduct that will take effect July 1, requiring some of the changes Levy’s task force recommended.

“I do think the fact that this issue has been elevated in the last few years has made a lot of financial aid officers already begin to rethink these letters,” said Megan McClean, NASFAA’s managing director of policy and federal relations.

“You’re seeing more students and families sitting around the table thinking about how they’re going to afford the cost of college,” she said, “and that has really caused people to take a real hard look at the information they’re receiving.”

NASFAA member institutions will now have to provide a breakdown of their costs of attendance; clearly identify which aid is in the form of grants or loans; and use standard terminology, such as “out-of-pocket costs” to indicate expenses that financial aid won’t cover. Repeated violations of the new requirements can result in temporary or permanent suspension from the association, which has members from 3,000 colleges and universities.

Related: Colleges ratchet up recruiting of applicants — just to turn them down

Those changes won’t come in time for students like the ones arriving this time of year at uAspire for what the organization’s counselors grimly describe as “dream-crusher” meetings. That’s when they tell the students that what looks like an offer of a full ride to college is actually an invitation for them and their families to go deep into debt.

“Financial-aid offices are there to make sure the student finds the money to pay the school. That’s the wrong incentive,” said Dan Mendelsohn, uAspire’s director of postsecondary programs. “They should help the student understand whether or not they can afford to go there.”

A few universities get high marks for doing exactly that.

Duke University, for instance, requires its financial-aid recipients to sit down with a counselor every year. It even flies in some low-income applicants who have been accepted to meet with financial-aid advisors and go over their awards.

“We’re very explicit about what the total cost is, about what we hope the parent can contribute and what the student can contribute, and about what the difference might be between the total cost and those two figures,” said Alison Rabil, the school’s director of financial aid. “It’s up to the school to be honest about what the cost is going to be.”

Not every university can afford to take these kinds of measures, Rabil conceded. “But you can put videos out there. You can send things to people.”

As for Moorer, now a sophomore at Augsburg College in Minneapolis double-majoring in business marketing and communications, he’s glad those letters are behind him.

“To me, it’s a marketing tactic,” he said. “Like every other thing, it’s a business. They want you to choose this school. They want you to choose their product and their brand. Is it morally right? That can be questionable.”

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