For college bound, a look at financial aid changes

NEW YORK — The mad dash to cobble together college funding will soon be under way.

In the weeks ahead, colleges will begin mailing out their much-anticipated acceptance letters and financial aid packages. The notices will alleviate pent up anxiety and finally give high school seniors a clearer idea of what their futures will hold.

But amid all the emotions, students and families will also need to start sorting out how they'll pay for tuition. The average bill now comes in at more than $17,000 to attend an in-state public college.

The problem is that navigating the universe of financial aid can be confusing. That's because there's a vast patchwork of grants, scholarships and loans available. But a failure to properly compare the options and explore the alternatives could mean the difference in thousands of dollars in debt upon graduation.

Adding to that confusion is a spate of headlines in recent weeks regarding changes in financial aid. To help navigate this process, here's a look at what's behind the recent changes:

Comparing Costs

As part of his broad plans to make higher education more affordable, President Barack Obama recently said he wants to make it easier for families to size up the cost of college.

As it stands, there isn't a uniform template for financial aid award letters and officials say the forms can be difficult to decipher, even misleading. For example, schools usually provide a total "out of pocket" cost after subtracting aid such as grants and scholarships. But some schools also subtract loans from that figure, even though loans have to be repaid and actually push up costs because of interest charges.

In other cases, interest rates and other loan terms are not spelled out. Officials say this could lead to students taking on more debt than they realize.

To address the issue, the Department of Education and the newly created Consumer Financial Protection Bureau announced in October that they are developing a model financial aid form. There aren't any plans yet to make the form mandatory. But once a template is finalized, Congress could vote to require colleges to use it to maintain access to federal aid. The adoption of such a form has also been widely supported by student advocates.

Separately, Obama is pushing for a "college scorecard" that would require schools to disclose their graduation rates, rate of employment and debt repayment among graduates.

Interest Rates