Decoding Student Aid Offers
For many families, college is one of the largest expenses they’ll ever have, and figuring out how to pay for it is no simple task. The aid packages they receive from universities often don’t make it any easier.
A 2018 study from uAspire and New America looked at aid offers from 455 universities, finding many colleges made their financial-aid packages confusing by:
- Using over 100 different terms to describe one type of loan
- Failing to explain that money-making opportunities like work-study are not guaranteed and don’t come directly off a student’s bill
- Not disclosing the full cost of attendance or estimated total after aid
We wanted to see how colleges are doing after that attention and after years of talk about this — the Education Department first started making a bigger deal of this way back in 2012. The answer is mixed.
Some colleges are still sending out problematic offers. Others have made improvements, consulting guides from the government and places like the National Association of Student Financial Aid Administrators.
Communication to families was misleading and confusing in lots of ways. Take the form the University of San Francisco used to send. It did some things that are considered good practice, such as clearly listing direct and indirect costs and defining each.
But it also failed to provide a straight-forward, bottom-line calculation for first-year costs. Instead, it required families to do their own math:
At Northern Arizona University, its letters used to total loans and grants under the same heading, making it unclear to families what money they would need to pay back (something many colleges still do). And, in an example highlighted in that 2018 uAspire/New America report, the university packaged a nearly $20,000 Parent PLUS loan in a way that made the total bill look like it hit $0.
A student’s eyes go right to that bottom number — their total immediate cost. And when they see a bill that adds up to nothing upfront, they might not realize the amount of debt they and their parents would be in.
Since then, Northern Arizona has changed a lot about how it communicates with students. Its forms now:
- Define the various awards included in the offer
- Separate scholarship money and grants from loans
- Show an estimated cost before loans are factored into the equation
Northern Arizona also no longer puts together an aid package that shows a Parent PLUS loan getting families to a cost of $0. But the university has decided not to follow recommendations about not packaging those loans with other types of loans at all.
Nydia Nittmann, the executive director of scholarships and financial aid there, said her office wants to show families all of their options to pay for college, including the maximum amount they can take out in PLUS loans.
And USF? It, too, made a number of changes in recent months to make its letters clearer.
Among other things, it now does the math:
We’re still reporting on transparency and standardization in financial-aid offers. Send Andrea tips and stories about your own experiences. Or, even better, send examples of the forms themselves.
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More Data, Fewer Anecdotes, on Student Loans
The Chronicle of Higher Education published an interesting data interactive this week that explored America’s $1.5-trillion in student loan debt. Two of the many charts jumped out to us. Each complicates the stories we often hear.
This one shows that the majority of borrowers have less than $20,000 in debt. And more than half of the total debt is held by just 16 percent of borrowers.
But that’s not to say that people with lower levels of debt don’t have struggles. In fact, as this next chart shows, borrowers with less debt are actually more likely to default.
Highlights from Our Newsletters
Our other Open Campus newsletters are tackling a range of big issues facing higher ed and the world:
• In latitude(s) this week, Karin Fischer writes about the widening effects of COVID-19 on higher ed. The global nature of the coronavirus threat makes it distinctive from other challenges higher ed has faced, she writes.
It also stands out because it has a lengthy time horizon, Sarah Van Orman, of the University of Southern California, told Karin. Campus emergencies are often one-time events, such as a protest or a snowstorm, in which the impact is felt for a discrete period of time. But a public-health crisis like a coronavirus outbreak could unfold over a much longer span, disrupting activities for weeks or even months.
Karin wants to hear from readers on campuses who are making plans for potential medium- and long-term disruptions caused by COVID-19. Get in touch with her here.
• In Next, Jeff Selingo examines the practice of gapping, the difference between what a financial-aid formula says a student can afford and what’s provided in a package of scholarships, grants, loans, and work-study.
Here’s the bottom line: More and more colleges are gapping, and the amount they are gapping is growing. That’s true at both public and private universities:
- The average gap at public colleges: $11,118, up 72% since 2008.
- The average gap at private colleges: $16,255, up 43% since 2008.
• In First Gen, Zipporah Osei talks about student mental health. One in three college freshmen struggles with their mental health, she writes. She herself has had to work at balancing well-being with academics:
There’s a lot of messaging out there about college being the ‘best years of your life’ and I have to admit that I fell for it hook, line, and sinker.
If you’ve been reading along from the start, I’m sure you’re starting to get a better idea of how excited I was to go to college. Even though I’d been told how academically challenging it would be, I felt prepared to take that on.
What I wasn’t prepared for was how lonely it would be.
Read more in her newsletter about how campuses are struggling to address growing needs and hear what one first-generation student told Zipporah about what her medical leave taught her about higher ed and resiliency.
Documents obtained by The Oregonian/OregonLive show that Concordia’s financial woes were at least in part self-inflicted. A high-stakes effort to reinvent itself as an online university proved an expensive boondoggle from which the college could not recover. (The Oregonian)
A Boston Globe analysis found that when it comes to Advanced Placement test taking, black students are more underrepresented in Cambridge than in any of the 13 other towns and cities bordering Boston. (Boston Globe)
Ben Asplund, a sophomore at Brigham Young University, said that being an LGBTQ student on the conservative campus has always been difficult. This week it got worse. (The Salt Lake Tribune)
The travel situation is fluid for all of us. But, for now, we’re still planning to be on the road this spring. Reach out if you’d like to talk with us about Open Campus.
Here’s where we’re scheduled to be:
- SXSW Edu in Austin from March 9–11.
- American Council on Education annual meeting in San Diego from March 15–16.
- ASU GSV Summit back in San Diego from March 30-April 1.
- Collaborative Journalism Summit in Charlotte from May 14–15.
- Education Writers Association National Seminar in Orlando from May 27–29. (If you’re a college journalist, apply now for the workshops we’ll be holding there.)
We’ll also be in New Orleans June 3–6 for a series of neighborhood forums, which we’re holding in partnership with The Lens. We’re interested in hearing from any Open Campus readers with perspectives on higher ed in the city.
How To Help
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