The Department of Education was required to develop the model form as part of federal education reforms in 2008. The adoption of the simplified forms would initially be voluntary, but Congress could vote to make it mandatory for schools that receive federal financial aid.

The push to standardize financial aid award letters comes at a time when student loan volumes have reached record levels.

The Institute for College Access & Success estimates that two-thirds of graduates have student loans, with an average debt of about $24,000.

One reason for the ballooning debt is that students don’t always realize how much their loans will end up costing them.

That’s partly the result of the “jargon-laden financial aid award letters using inconsistent terms and calculations,” federal officials said in the release announcing the initiative.

In testimony at a Department of Education hearing on the matter last month, financial aid expert Mark Kantrowitz noted that college is one of the few major life expenses that do not come with standardized disclosures about costs. That’s despite the $16,000 average total for tuition and fees at public schools, according to the College Board.

Kantrowitz, who publishes FinAid.org, noted that the financial aid letters don’t always distinguish between grants and loans and often don’t include basic information on loan terms, such as interest rates.

Yet if a student took out $24,000 in student loans, the interest charges alone would add up to $9,100 if repaid in 10 years. That’s assuming the favorable interest rate of 6.8 percent that federal student loans carry; interest rates on private loans can be higher.

Making matters worse, critics say schools play an ambiguous role in pushing student loans.


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