With so many financial implications that come from selecting a college, is there a better way for students and their families to be informed of the true costs of attending that college?
By Daniel Garcia
It is April of your senior year in high school. You are gearing up for prom, finals and graduation. You also got hit with a brief bout of “senioritis." The safety of high school is starting to come to an end and it slowly starts to sink in that you are about to embark in a major milestone in your life. Oh yeah, don’t forget to upload that pic on Instagram and Snapchat!!
You actively prepared for college over the course of four years and now you anxiously await responses from the schools you applied to. Finally it happens: You were accepted to the school of your dreams. As more and more acceptances are received, a May 1st deadline looms over your head forcing you to make one of the most important decisions of your life. What college should I attend?
In reality, that question should be two-fold. What college should I attend and how much will it cost?
Prospective students are asked to make this critical decision about their future in the context of a major transition and nostalgic period in their lives. With so much happening simultaneously, students often do not consider the latter part of that question. In many cases students make their school selection based on the brand, reputation, major, proximity and amenities offered by the school; all important determining where to attend. Equally important however, are the costs associated with attending school, and to understand those costs you must be able to decipher the financial aid award letters.
Because of the importance of those award letters, colleges must do a better job of simplifying the information so that families can truly understand the true costs of going to college. Often times, it feels like you are comparing apples to oranges when trying to make sense of the aid package for school A versus school B. Some colleges provide descriptive, reader-friendly letters while others fail miserably explaining how much aid they are offering the student. In addition, many financial aid award letters are riddled with industry jargon like subsidized loans versus unsubsidized, interest rates, costs of attendance, room and board, etc. making it hard to decode the information.
When teaching students about financial aid, they are asked to remember that scholarships and grants are the best forms of aid, definitely consider work study and if possible stay away from loans. If you have to take out loans, make sure that you remember that subsidized loans are better than unsubsidized loans because the government is paying the interest on the loan while you are attending college while the unsubsidized loan is earning interest as soon as you enroll in college. In addition, remember that Parent Plus loans need to start being repaid after the first semester and also require a credit check. Oh yes, avoid private loans at all costs!
Are you lost? Most people hearing this info for this first or second time in their lives would be. This is the point! When the time comes to recall all of these critical details, many important facts can go over the heads of most students & parents alike. Now imagine being the first in your family to go to college, coming from an underserved community, likely to attend a high school that does not have a college counselor? This process can be even more over-whelming for someone going through the process for the first time.
Evidence suggests that most students are not likely making the most informed decisions. “The average amount of student loan debt is approaching $30,000.” (Bidwell, 2014) Skyrocketing college costs contribute to the rise in dependence on loans to attend that dream school, but a lack of true understanding the award letter is also giving rise to higher amounts of debt.
Understanding what is written in the award letter is one issue, but that means you were lucky enough to have received your letter on time to begin with. There have been cases where students don’t receive award letters until after the May 1st decision day deadline. How is a student supposed to make an informed decision on what school to attend if one or all of the schools have not given them their award letter? Students must make blind decisions, which can lead to the phenomenon known as “summer melt” where qualified students, accepted to 4-year schools do not end up enrolling in those schools for various reasons.
So what are some suggestions to around this issue? Something as simple as creating a universal financial aid award letter is a huge step in bringing clarity to the process. As recently as 2013, Senator Al Franken, with bipartisan support, reintroduced the “Understanding the True Cost of College Act of 2013”. The goal of this bill is to “require schools to use a universal financial aid letter so students and their families will know exactly how much college will cost, and will help them compare apples to apples when deciding what school a student will attend." Efforts to pass this law have failed, but this can be a promising way to ensure at the very least, families are effortlessly able to compare aid packages from multiple schools.
Along with creating a universal award letter, schools, colleges and community based organizations should consider creating opportunities where families can receive one-on-one advisement to evaluate aid offers. In addition, with new smart phone apps being developed each day, can technology serve as that difference maker for families across the country? (Personally, I am banking on my colleague Marcelino Plascencia’s “Bridgin’” app to be that difference maker in the future.) There are many possible solutions and hopefully bringing light this issue sparks innovative ideas to resolve it.