Late Fall 2019
December 09, 2019
Every day we hear a new story about people struggling with student loan debt. At the Initiative, we listen and try to learn from those experiences so we can better help high school students before they agree to take on debt. We know from our own experience, simply researching and writing the module on financing post-secondary education was incredibly challenging. Finding accurate, up-to-date information was oddly difficult. At one point we were having conversations with government agencies who didn’t have answers. If an entire team of experts had difficulty navigating a complex financial aid system, it is understandable how overwhelmed students and their families feel.
When the UChicago team tried to translate the financial aid information for students, there was one major, frustrating issue: the lack of transparency within and across student financial aid award letters. Every college issues their own unique financial aid award letter, making it impossible for students to compare schools. In addition, the type of aid being offered is not consistently labeled, and many colleges do not even make the total cost apparent. Imagine going through the entire college application process only to receive financial aid letters that are difficult to decipher.
We recently came across a study, “Decoding the Cost of College” by New America and uAspire that highlighted many of the issues we faced and brought more to light. Let’s take a look at a few key findings:
— Out of 455 colleges, there were 136 unique terms for unsubsidized loans, and 24 of them did not even use the word "loan.”
— One-third of 515 letters neglected to include detailed information about cost.
— There was no distinction made between types of aid (grants, scholarships, loans, and work-study) in 70% of the letters.
Yikes! If the names of loans aren’t the same, how will students compare? If the final cost isn’t provided, how will students know where the gaps are? If no distinction is made between grants, scholarships, loans, and work-study, how will students be able to distinguish money that must be paid back from other types of aid?
After our finEDge materials are printed, we continue to delve into the content so we can continuously revise the materials to provide students with the most useful tools possible—shouldn’t our universities do the same? It’s time we find a way to make the system work for students rather than the other way around. Until colleges make these letters more transparent, students are going to continue to sign on for more debt than they anticipated and the cycle will continue.