The cost of higher education challenges most students and prevents some from attending college. Students sometimes enroll in classes before they've secured the necessary funding, sometimes shutting others out of the class. If the funding doesn't materialize, the student cannot take the course, and students who were denied entry often have made other plans. Schools use letters of financial responsibility to avoid these outcomes and ensure that students understand the costs associated with an education.
Definition
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Some educational institutions require students to submit a letter of financial responsibility, a document that guarantees payment of the expenses likely to be incurred by the student either through attendance at the school or by participation in a special event, such as a study-abroad program. These letters are usually completed and signed by the student and the person guaranteeing payment, usually the parents. Some universities require a letter of financial responsibility to be filed by all international students.
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Purpose
Letters of financial responsibility serve two major purposes. The first is to provide some degree of protection for academic institutions that offer sometimes costly services in the course of instruction and other programs. By securing the names and contact information for parents or sponsors, the institutions give themselves an additional source of payment, if necessary. For students and their parents, letters of financial responsibility ensure that students understand the costs involved and that parents are prepared to get involved financially.
Components
A letter of financial responsibility is generally a short document with several lines for students and their sponsors to fill in basic information. Besides names, phone numbers and addresses, letters of financial responsibility ask for Social Security numbers, which allow academic institutions to run credit checks on applicants. A letter of financial responsibility also includes space for a signature and date. In some cases, it will also include a blank space for the parent or sponsor to indicate a dollar amount for indicating the level of support that the sponsor is able to provide.
Attachments
Some letters of financial responsibility specify that applicants must attach supporting documents. This usually serves as proof of the sponsor's financial situation and ability to contribute to a student's education. Bank statements, for example, demonstrate adequate savings that an applicant's sponsor has available for emergency assistance. Students who are financially independent can serve as their own sponsors on a letter of financial responsibility by enclosing tax documents or bank statements to prove their financial independence and stability.