The Confusing Info Colleges Offer Students About Financial Aid
The cost of college is one of the primary issues students think about any time deciding whether and where to enroll. So it tends to make sense that high school students, once admitted, would rely so much around the letters from colleges that inform them how much the institution can chip in. The problem is: Those letters, called financial-aid award letters, are often confusing and differ wildly from college to college.
A new report from uAspire, a college-affordability advocacy organization, and New America, a left-leaning believe tank, examined more than 11,000 of such letters from uAspire’s content with university students. What they found was inconsistency. Several of the letters didn’t even make use of the word “loan” any time referring to an unsubsidized loan, a kind of loan that accrues interest while college students are in school. Other letters didn’t consist of information about just how much it really costs to visit the institution, that is important context for college students attempting to figure out, for example, how far a Pell grant (a federal grant for low-income college students) will go. And half of the letters didn’t explain what a student had to do to accept or decline the aid that was offered.
To be sure, “aid” is a fickle word, and may mean various things under various circumstances. Grants are actually money that does not need to be paid back, whereas loans do, and on top of that there’s work-study, an additional term that’s not self-explanatory, and which some letters do not clarify. And if that nonetheless does not cover the costs-the report found that Pell-grant recipients typically were left to spend an average of $12,000 in unpaid expenses, that they may or may not be able to cover with subsidized or unsubsidized loans on their own-if not, parents can take out a PLUS loan (a federal loan for graduate high school students, professional students, and parents of dependent undergraduate college students that covers the price of attendance minus other aid) to cover the remaining balance. If that appears complex, that’s because it is.
Going to college could be a huge monetary burden. And ambiguity in explaining a way to spend for it can have devastating consequences. That is why it’s important for financial-aid award letters to clearly explain to students what they’re getting, how they’re getting it, and what monetary obligations stay. If colleges are actually not transparent in describing how they are able to help university students pay for their degree-for instance, the amount of money that’s paid out in grants versus loans-then the likelihood that someone makes a poor financial choice increases.
Why aren’t colleges sending out much more comprehensible letters? Maybe they are actually not considering the letters from a student’s standpoint, Rachel Fishman, a researcher at New America, told me. “The primary thing” colleges can be doing to repair how they explain costs to college students that have been accepted, she said, “is to create certain that the letters are generally student-focused and that you’re not searching at them using the eyes of a financial help officer.”
Perhaps the much more likely explanation for the confusion is that the federal government hasn’t established any universal recommendations or specifications for the letters. Certainly, there are generally a couple of ways that the letters might be standardized. Colleges could voluntarily adopt the standard letter that the United states Division of Education has been recommending because 2012, which clearly explains how the complete financial package is put with each other, but making that mandatory would require Congress to pass a law. Speaking of which, Congress could implement such a repair when it updates the federal law governing greater education, recognized as the Higher Education Act, that is overdue for an update, and need transparency-an method whose achievement seems unlikely any time quickly, as fundamental disagreements between Democrats and Republicans have derailed efforts to update the law so far this year. There was also a standalone bipartisan proposal final year to standardize the letters, however it is unlikely to pass using the Greater Education Act’s renewal still looming.
Fishman notes that fixing the award letters won’t solve college costs-that needs to be dealt with separately-but it would go a long way toward assisting high school students understand what they’re obtaining into any time they decide to attend college.