New tool helps decipher financial aid awards
(MoneyWatch)Financial aid letters are often confusing. One reason why they are difficult to understand is because some schools don't want families to know when the aid offers they've made are stinkers.
To keep families in the dark, schools will stuff loans (sometimes even unidentified as such) into packages. They will also fail to include the total cost of their schools -- or minimize the true costs -- and basically take steps to make it appear that their awards are generous.
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The U.S. Department of Education has tried to eliminate misleading aid awards by producing a financial aid shopping sheet. The federal government is encouraging schools to ditch their confusing aid letters and instead embrace this new simple financial aid award template. It's been a tough sell. Less than 10 percent of U.S. schools have adopted the shopping sheet.
College Abacus, a startup that was created by two Rhodes Scholars, has rolled out a free online tool that allows families to essentially use the federal shopping sheet even when schools have refused to adopt it.
When using the Abacus Shopping Sheet, a parent or student can insert the name of any school into a financial aid letter template that asks for the same data that the federal Shopping Sheet requests. The tool will direct a parent to plug in any grants and scholarships that the child has received and then add the cost of the school including tuition, room/board and books. The shopping sheet will then provide the school's net cost (after scholarships/grants are deducted).
A user can add as many schools as they want into the tool and can then use the shopping-sheet tool to compare offers.
"Parents are stressed about the college process and stressed about the cost, but mostly they are stressed because nobody is giving them straight answers," said Abigail Seldin, a founder of College Abacus. "We think this is a key step in assisting them in financial planning for college."
