Financial Aid Disclosure Form

Cliché: Know before you owe.    
POCS Reality: There is no standard college financial aid award letter so students and families can find it confusing and difficult to calculate and compare out-of-pocket college costs.


The Department of Education is taking on the issue of standardizing college financial aid award letters so students and families can compare them before deciding where students should attend.

The Problem

College cost comparisons are misleading now because colleges can include different types of financial aid as reducing the college bill when in fact some can increase college costs. According to this article in

The practices are troubling because families often use these aid letters to help determine which school to attend. The lack of clarity has also played a role in driving up the debt loads shouldered by graduates to record levels, federal officials say.

Background Info

There are 3 types of financial aid:

  1. Scholarships/grants
  2. Federal Loans
  3. Federal Work/Study (FWS) 

Scholarships/grants are free money that does not get paid back. Loans must be repaid and have borrowing costs including fees and interest. FWS is a job, usually on campus, that receives a paycheck for work performed but is capped at the award amount.

This is an old POCSmom soapbox issue. I speak about it in my seminars, write about it this blog, and my other blog, and even made a chart on my website to help students and families better calculate college costs. 

It’s O.K.for colleges to reduce their bill with free money scholarships and grants that do not get paid back. It’s not O.K. when they also reduce the college bill by the amount of student loans and/or Federal Work Study (FWS) awards. Loans are a way to help pay the college bill but they also can hugely increase the overall cost of college because of borrowing costs. 

FWS awards can’t pay a college bill which is due way before students work and get their first paycheck from their FWS job.

When colleges include financial aid loans and FWS awards as a way to reduce the college bill, it is confusing at best for students and families trying to calculate their out-of-pocket college costs.

 A Solution

The Department of Education with the CFPB (Consumer Financial Protection Bureau) is creating a model format for colleges to use to explain financial aid offers to students. This “Financial Aid Shopping Sheet” may include the loan types and amounts, monthly repayment info, and itemized college costs. The public is invited to rate proposed content and provide comments:

POCSmom’s College Prep DIY Insight: Only a single standardized college financial aid award letter form will enable students and parents to accurately compare college costs if it contains:

  • all college expenses
  • info about strings attached that may cause loss of free scholarships/grants
  • info about the borrowing costs of loans
  • info about how a FWS job is obtained, expected hours worked, amount of paycheck, when paid