I am a journalist working on a story for a national women’s magazine, and I am interested in interviewing women for a series of articles on student debt. (College Confidential Senior Advisor Sally Rubenstone has allowed me to make this post).
Did your financial aid letter lead you to believe you were getting more grant/scholarship aid than you actually received, forcing you to take out more loans than you had intended?
*Was your EFC miscalculated, again forcing you into more loans than you actually needed?
*Did you choose a college because it offered generous aid, but then took it away in subsequent years?
Were you confused by your loan counseling, and actually had no idea what you would/will owe after graduation?
If you can answer yes to one or more of these questions, or have other stories about financial aid office mix-ups or mistakes, please post below or pm me. I would love to speak with you. I prefer using real names but will figure out a work-around for those who require/desire anonymity.
Hi Jennifer. I know you are looking for the problems, and maybe that is all your publication is interested in.
But what about the tens of thousands of folks who answer NO to all of your questions? There are many many families every year who have no issues with the financial aid process at all.
Our financial aid letters for 11 colleges (two kids) were very clear. We knew exactly what the grants or scholarships were, the total costs to attend, and what our net out of pocket costs would be.
Are you talking about the FAFSA EFC? Ours was pretty much what we expected it to be (pretty much full pay). We had worked through the FAFSA formula by hand…and really it was spot on when we submitted our FAFSA forms.
Now…if you are talking about the family contribution calculated at Profile schools…how,would anyone know? Each school has its own formula, and they vary wildly.
Also,there is a difference between the family contribution the school expects…and often what the family hoped it would be.
Actually one of my kid got an increase in scholarships that was equal to the %age of the tuition increase annually. That was nice. The other kid got a great scholarship…and the provisions were written clearly into the award. These were merit awards.
Folks need to remember…need based aid…you apply EVERY year…and every year is a new. If there are changes in your income, assets, number of kids in college, number of members of your household…it is very likely your need based aid will change. Also, some schools have certain incime thresholds for certain types of aid.
For example…to receive a Calgrant in CA, family income must be below a certain amount. If you exceed that, you will lose that award.
The biggest mistake I’ve seen is people don’t even READ the loan counseling info online. They just accept…and sign, and that’s it. We sat with our kids and read every single word in that loan counseling…every word. We asked them questions about it, and exoected them to understand this before they signed to accept.
My opinion…too many people don’t do their due diligence in terms of reading the excellent information in that loan counseling.
I’d like to see your proof that so many families have no trouble with this process. Keep in mind all of this is correlated with socioeconomic status. It sounds like you are lucky to be in an educated community. Not everyone has this privilege (and it IS a privilege).
There is no reason for schools to not make more of an effort to standardized FA package letters as proposed by Obama et al.
I agree that financial aid packages need to be clear. No, I don’t live in mega bucks land. Sorry, to tell you that.
But really…I know folks who just signed their loan documents without reading the entrance counseling. That is irresponsible.
I know parents who thought they didn’t need to repay loans. What?
I know students who supposedly are ready to attend college who have magical thinking about where the money is supposedly coming from…and sign on with nomway to actually pay the bills.
This isn’t the fault of any of the paperwork being issued. It’s the fault of the consumer who doesn’t take the time to READ the documents, or makes faulty assumptions.
Absolutely, financial aid should be easy to understand. I agree with that.
I found financial aid awards to be at least confusing if not misleading. And I read everything - thoroughly. Part of the problem was different schools used different terms and different formulas for calculating COA. In the end I made a spreadsheet with rows for each school detailing each cost so I could do the type of apples to apples comparison I couldn’t do just from the offer letters.
Yes, there are plenty of people out there who think magically schools will be affordable. Or who don’t read loan documents. You can’t help those folks. But there are lots of folks out there who would be hit by fewer “gotchas” if there was standardized presentation of much of this information.
Got to side with Thumper here. The same people who buy extended warranties on a $300 appliance and pay $500 to an auto dealership for an extra set of car mats which are sold at every Walmart in the country for $85 are the folks who complain that their financial aid letters were indecipherable.
What did they find confusing? Well- that loans need to be repaid. With interest. What else did they find misleading? Nowhere in the documentation did it say “If you do not pay your tuition you will not be allowed to enroll for that semester”. Nowhere in the documentation did it say, “If your kid decides to withdraw the night before finals, you will not be getting a refund- not just for your tuition, but for the meals your kid has been eating for the last three months”.
Did your financial aid letter lead you to believe you were getting more grant/scholarship aid than you actually received, forcing you to take out more loans than you had intended?*
Taking a less-than-full-time course load will result in this - it's not like the schools are misleading, when the award letter is predicated on the assumption of full time enrollment. Or the initial estimated awards may change if the information on the FAFSA is verified & found to be erroneous (requiring updates that reduce aid). Or the student may have been in school a while, and they had Pell removed because they reached the Pell lifetime limit. There are many things that can reduce expected aid that are not misleading, shady, erroneous, etc. I hope the article is balanced ... perhaps it would be helpful to explain the things that can and do affect the amount of aid a student actually receives compared to what a students expects to receive.
Was your EFC miscalculated, again forcing you into more loans than you actually needed?
Miscalculated by whom? There is a formula that is applied to everyone. Miscalculation is a bit misleading. The student and parent complete the FAFSA. A formula is applied & an EFC is calculated. If later, through verification or if the school is required to resolve conflicting information for some reason, the information may have to be updated and the EFC may change. This is not something a school does to hurt a student - it is how it must be. But the wording makes me feel like the OP is looking for complaints about schools somehow misleading students, and this is not the case at all. Why not help students by explaining how to avoid common mistakes? For example, a student who erroneously checks that she is in guardianship when she is not may very well end up with reduced grant aid when the parent info is added. Oh, and no one is ever “forced” into loans. Choices do exist, and no one is making the student attend that school.
Did you choose a college because it offered generous aid, but then took it away in subsequent years?
“Took it away.” Again, the OP seems to be looking for the negative with this wording. Better to concentrate on what would cause a loss in aid in future years, so that students can ask schools about their policies. (And in my experience, no student ever thinks she won’t make the necessary GPA to keep a scholarship - but it happens a lot.)
Were you confused by your loan counseling, and actually had no idea what you would/will owe after graduation?*
I hope the OP will encourage students to ask questions, do their research, and truly understand what they are signing up for. My coworker was once asked to award "one of those loans you don't have to pay back." I have talked to numerous students who took out ridiculous amounts of private loans for undergrad, and they said they had no idea what they were doing. There are students who really want to go to a certain school, parents who really want their kids to go to that school, and schools that want to enroll students who want to attend their school. I don't know that the loan counseling will help, although I am all for looking into better ways to provide loan counseling. In the end, the OP could do a service by explaining what loans are, how repayment works, the "magic" of compounding interest, etc - so that readers come away more informed.
While there are plenty of people out there who “don’t realize that loans need to be repaid”, there are also families who are new to the college process and don’t have good advisors in high school and just don’t know where to start. Not all of them find CC. One aspect that some people find confusing is that many schools package grants, scholarships, and loans into one bundle of “award”. Savvy shoppers get that, but some folks see “award” and don’t realize that loans are an inherent part of that. I think it’s harsh to assume that anyone who has difficulty interpreting aid awards is inherently stupid or at best clueless.
Also, not everyone realizes the variability of need-based aid - how it can go up - or down - with a changing financial situation. It can be hard to estimate what the price for your second child will be after the first graduates. Not everyone realizes that at many schools outside aid does not stack with school aid and in some cases accepting outside money - especially for freshman year only - can have a negative effect that carries through in future years.
I agree it would be nice to see this approached from the positive - what did you not understand clearly from the variously formatted aid letters you got, what changes to standardize would have helped you better understand exactly what the college was offering and how it would change through the years of attendance.
Yes, there are clueless people out there. You can come up with endless examples of them. But there are also honest, intelligent people out there who are confused by the whole process and could use some assistance, of which standardized award letters would be one part.
I would answer that the estimate after completing the NPC online was a little hard to understand, especially the “OOP is $0” as the bottom line. You had to look above to see that the estimator has included full Stafford loans and the Parent Plus loan. This was my first crack at a NPC, so it took me a little while to understand it all.
I don’t think it is intended to be misleading, just marketing. It is intended to show how the school can be affordable. As I got better at reading them, and at inputting the information correctly, the NPC were more accurate and helpful.
I do think for the study to be helpful, the OP needs to have both sides of the story. If she writes an article that 10,000 students had misleading FA letters or didn’t understand the loan terms, so what? Ten thousand out of three million? Out of 20,000? All from big public schools? All private loan borrowers?
I also think she should consider those of us who have received more in later years because of additional merit scholarships or because of financial changes for the parents… I feel both of the schools I deal with try to give my kids whatever they can.
it sounds like OP already knows what they wish to argue and opine, and wants confirmation biased from people who fit her world view, instead of looking for data and then forming an argument off of that. these questions sound so biased.
i agree with thumper, a lot of people don’t read. im not privileged at all, my parents dont really understand english all that well or know anything about the college process, much less the financial aid process. first generation college student/minority. but i make sure to read everything and inform myself before finalizing anything. it’s not a “privilege” to do your research beforehand. sure, maybe if i had white middle class parents who knew about the college financial aid process or something, maybe they’d be the ones initiating all of the financial research and i wouldn’t have to waste any time on trying to figure it out. but that’s not the case, so it’s my responsibility to figure things out for myself and to be informed. im not “privileged” for doing so. it’s simply common sense and taking responsibility for your actions. no one’s going to do that for me.
@CourtneyThurston so please dont come out trying to say that those of us who havent had any troubles with the financial aid process are somehow more privileged than those who don’t. im poor, i dont even have a room to sleep in. dont call me privileged for doing the bare minimum when it comes to being informed and managing my finances. thanks. it doesn’t take privilege to be competent enough to understand financial aid agreements. if you think only “privileged” (read: white, upper middle class) people are “capable” of understanding financial aid agreements without any trouble, you’re wrong. how dare you assume that those of who aren’t privileged aren’t capable of understanding such things or figuring stuff out. maybe you’re the one who needs to check her unconscious problematic views.
Why does it have to a matter of argument or proof?
If the OP were writing a story about people who had cancer, suffered in a flood, won the lottery, lost a loved one, played baseball in high school or had any other specific type of experience, would we say she was going to argue that ALL people had that same experience just because she put out a request to meet people with that experience?
@ClaremontMom - Fair point. OP clearly said at the bottom of her posting that she was looking for people with very specific (bad) experiences as opposed to looking for a cross section of experiences. Nothing wrong with that. For all we know she’s already spoken with people who’ve had good experiences and wants to find counter-examples.
Soapbox: Just once I’d like to see a story about how people use student loans responsibly; how they’ve turned lives around or rescued families whose college savings were wiped-out due to illness and job loss.
The editor probably assigned this article to the writer, and she’s looking for people who fit the requirements of the article. It’s a pretty typical way to be assigned work when you’re a freelance writer who has a relationship with an editor.
According to the Federal Reserve Bank of New York, outstanding student loan debt in the United States lies between $902 Billion and $1 Trillion with around $864 Billion in Federal student loan debt.
Based on these numbers, calling the people who don’t understand how loans and debt work ‘stupid’ (as some people are insinuating on this thread) is downright cruel and insensitive. Not everyone understands how money works.
The OP’s questions, while phrased somewhat leadingly, should provide a glimpse into the mindset of people who make mistakes with regards to debt, and at the very least can act as a lesson to those about to embark on a similar path.
Although now that y’all have torch and pitchforked anyone who isn’t Dave Ramsey, I doubt they’ll post.