Navigating the college-going process is a difficult one, especially for low-income students and students who are the first in their family to attend. Applying to schools, figuring out where (and how) to visit, completing the FAFSA, and applying for scholarships can be an overwhelming and burdensome process. It’s enough to make anyone’s head spin. And that’s just the beginning. Everyone knows college is expensive so a key part of deciding if and where to attend is understanding how to pay for your degree.
Most students complete the FAFSA when they apply to college. And often, after having been accepted to the school, they receive a “financial aid offer” as part of the process. These letters or offers depict the “financial aid package” a student has qualified for—the various grants and scholarships they will receive, the loans that are offered to them, and the amounts for each. Each of these components is important to making sure college is within reach, but all too often, these letters are confusing at best (and downright misleading at worst).
Recent research from New America and uAspire examined more than 11,000 of these letters and showed just how complicated and confusing this can be for students. After a thorough review of letters from over 500 different colleges and universities predominantly from the public and nonprofit sectors, the research showed some troubling results. Shockingly, over a third of the schools did not include any cost information—so students couldn’t easily calculate what gap they would still have to fill after accepting the financial aid package. One student received a scholarship of more than $20,000, which might sound pretty good. But without clear cost information, they were unable to discern just how much they still owed—the school failed to mention the additional $17,000 per year needed.
Colleges were also inconsistent with loans. Borrowing to attend college is a necessity for millions of students, especially low-income students who will often still face a gap even after they borrow loans. But this decision-making—which often comes with a hefty price tag—is made difficult by muddled information. For example, every student who completes the FAFSA qualifies for a Federal Direct Unsubsidized Loan, but of the more than 500 schools analyzed, 134 different terms were used to depict this loan. Even worse, 24 did not even include the word “loan.” With so many different terms for the same federal loan, it can be nearly impossible for students and their families to make apples-to-apples comparisons across schools around the kitchen table. And without the word “loan,” students may not even realize they have to borrow to attend—downright misleading. And that is just about one single loan.
I know from personal experience, too—not just from the research. Not that long ago, I was a high school senior in the midst of this incredibly important and costly decision. As a low-income student whose parents didn’t have a college degree, it was one I was effectively muddling through on my own. After applying, each school sent my offer listing my options for paying for my degree through a cobbled-together string of scholarships, grants and loans. I qualified for the Pell Grant, both the Federal Direct Subsidized and Unsubsidized Loans, and Federal Work Study, plus a handful of state grants, institutional scholarships and outside scholarships. The exact same federal grants and loans were described differently, with different words and presentation. And with vastly different formatting from college to college, it was virtually impossible to compare schools so I could make an informed decision about the end-total I’d be expected to cover for my freshman year alone.
Students deserve to be able to better navigate the process of going to college, especially when leveraging their futures with loans to pay for a college degree. Offers of scholarships, grants and especially loans should be clear and understandable. College-goers should be able to make apples-to-apples comparisons between schools easily, instead of having to decipher the information from a hodgepodge of letters. Given the huge amount of federal dollars funneled to institutions across the country—more than $120 billion a year—the federal government has an interest in making sure grants and loans that are offered to students are presented clearly and fairly to students by the colleges that enroll them, in the same words and in a comparable way.
Luckily, there is bipartisan, bicameral legislation to fix this issue. Senators Grassley (R-Iowa), Smith (D-Minnesota), and Ernst (R-Iowa) introduced the Understanding the True Cost of College Act in March of 2019 to do so. By providing standard offers with common language and shared formatting, this bill will help students better understand their offers and make more informed decisions. As Congress considers the many needed changes to the Higher Education Act, making sure students can easily understand the financial aid they are being offered is critical. In the list of higher education issues to address—like accountability, affordability and Title IX—fixing financial aid offers is one of the easy, no-brainer fixes to make our higher education system easier for students to navigate.