The Confusing Info Colleges Offer University students About Financial Aid
The price of college is one of the primary issues university students consider when deciding whether or not and where to enroll. So it tends to make sense that high school students, once admitted, would rely a lot on the letters from colleges that tell them just how much the institution can chip in. The issue is: Those letters, known as financial-aid award letters, are actually often confusing and vary wildly from college to college.
A new report from uAspire, a college-affordability advocacy organization, and New America, a left-leaning think tank, examined more than 11,000 of such letters from uAspire’s paper with university students. What they discovered was inconsistency. Several from the letters didn’t even use the word “loan” any time referring to an unsubsidized loan, a type of loan that accrues interest while high school students are generally in school. Other letters didn’t consist of info about how much it actually costs to visit the institution, which is important context for college students trying to determine, for example, how far a Pell grant (a federal grant for low-income university students) will go. And half from the letters didn’t clarify what a student had to complete to accept or decline the help that was provided.
To make sure, “aid” is a fickle word, and can mean different things under various circumstances. Grants are generally money that does not have to be paid back, whereas loans do, and on top of that there’s work-study, an additional term that is not self-explanatory, and which some letters do not explain. And if that still does not cover the costs-the report found that Pell-grant recipients usually were left to pay an average of $12,000 in unpaid expenses, that they might or might 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 college students, professional university students, and parents of dependent undergraduate students that covers the cost of attendance minus other help) to cover the remaining balance. If that seems complicated, that’s simply because it’s.
Going to college could be a massive monetary burden. And ambiguity in explaining a way to pay for it can have devastating consequences. That’s the reason why it is important for financial-aid award letters to clearly explain to high school students what they’re getting, how they’re getting it, and what monetary obligations stay. If colleges are typically not transparent in describing how they can help university students spend for their degree-for instance, the quantity of cash that is paid out in grants versus loans-then the likelihood that someone makes a bad financial choice increases.
Why aren’t colleges sending out much more comprehensible letters? Perhaps they are not considering the letters from a student’s standpoint, Rachel Fishman, a researcher at New America, told me. “The main thing” colleges may be doing to fix how they clarify expenses to university students which have been accepted, she said, “is to create sure that the letters are student-focused and that you are not looking at them using the eyes of a monetary aid officer.”
Perhaps the more likely explanation for the confusion is that the federal government hasn’t established any universal guidelines or requirements for the letters. Certainly, there are typically a few methods that the letters might be standardized. Colleges could voluntarily adopt the regular 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 need Congress to pass a law. Speaking of which, Congress could implement such a fix whenever it updates the federal law governing greater education, known because the Greater Education Act, which is overdue for an update, and need transparency-an approach whose success seems unlikely any time soon, 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 last year to standardize the letters, but it is unlikely to pass with the Greater Education Act’s renewal nonetheless looming.
Fishman notes that fixing the award letters won’t solve college costs-that must be dealt with separately-but it would go a lengthy way toward assisting high school students comprehend what they’re getting into when they decide to attend college.