Bridging the Financial Aid Information Gap
Earlier this year, The Sallie Mae Fund (www.thesalliemaefund.org) conducted a study on the financial aid information gap among Latino students (see University Business July 2004). "In general, the study showed that people want more information," says Tom Joyce, vice president of corporate communications for Sallie Mae. "They're also saying that they want the information at a younger age than they are getting it. And, especially in the Hispanic community, they want to get the information in person, from an expert source, as opposed to a brochure a letter."
While the Sallie Mae study focused on a specific population, the data also made clear that a significant portion of the general population wasn't getting information on financial aid options that would enable them to attend the schools of their choice. "I think it's an overriding broad-based issue with first-generation families, period, regardless of their ethnicity," adds Carl Buck. "You often have Caucasian first-generation families who have no idea how this works."
Buck has spent the last 30 years directing financial aid services at a number of universities, including UCLA, Rice University (TX), Rutgers (NJ), the University of Wisconsin, and the University of Utah. That kind of background gives him a solid foundation in the workings of financial aid from the school's side of the fence. Now VP of Financial Aid Services for Peterson's clearinghouse for higher education information and director of the Best College Deals Web site (www.petersons.com/bcd), Buck conducts financial aid workshops with families of high school juniors. What he encounters most, he says, is confusion.
"A lot of good work is done on the admissions side," says Buck, "but I think schools really need to take a hard look at how they work with families that have applied for aid and are deemed to be eligible--or, just as importantly, are deemed to be ineligible. What can they do to help these students find other ways to pay for college?"
Buck says one of the chief frustrations he hears from parents is getting answers to their questions about paying for college. "They often ask, 'How do we connect with the main player, the key person, to show us how to make college affordable at this school?'" he says. "Surprisingly, at most schools, there really isn't one person who has that assignment."
In an ideal world, he says, schools could create a "hub office," a department responsible for taking the financial aid process to the next level, beyond the form-checking stage. "Perhaps we need an ombudsman or troubleshooter role, someone who can work with families and help them figure out how they're going to pay their bill, not just for the first year, but for all four years. Financial aid need is relative, and it's very subjective. Non-needy families need to know information up front about prepaid tuition plans. They need to know about monthly plans, and they need to know about merit scholarship opportunities. For example, many families don't realize that if you apply for merit scholarship in your freshman year and don't get it, you can still apply in your sophomore, junior, and senior year."
Unfortunately, Buck says, the larger the school, the more families that need to be served, and the more difficult it is to deliver that level of personalized service. "It's not that financial aid counselors aren't interested in helping, it's that their job responsibilities no longer allow them to," he says. "These days, counselors are not just counselors anymore. They're dealing with various liability issues, quality control issues, fund management issues, and so on. The percentage of actual quality counseling for families is minimal at best."
Heather Ficarra, vice president of sales and marketing for ACS Higher Education Services (www.acs-inc.com), says that in an age of rapidly growing enrollment, schools find it tough to adjust their services to meet demand. ACS helps schools improve enrollments by providing services that bridge the admissions and financial aid processes. "A lot of schools want to be able to offer better service, but they simply don't have the infrastructure to do it," says Ficarra. "They have long queues in the financial aid office, busy phone lines, and so on. Schools are struggling with how to handle that growth, because if you can't help families finance an education, you aren't going to get students into the seats."
counselors aren't interested in
helping, it's that their job responsibilities
no longer allow them to.
-Carl Buck, Best College Deals
Many schools have turned to online tools, offered by ACS as well as other companies, to complement their in-person financial aid services. "We're adding a new element to financial aid services by marrying online solutions with offline solutions," says Ficarra. "We combine call center and other administrative financial aid processing with online tools. We put together outbound programs to help schools move prospective students from the admissions process through financial aid. And we have inbound programs where we field calls from families that have general questions or concerns about the financial aid process. It's all about moving people through the process and educating them about financial aid."
Jim Boyle, president of College Parents of America (collegeparents.org), an organization of parents, universities, and corporations dedicated to making higher education more accessible, says financial aid is a foreign language to parents. "Those who work in the financial aid world are accustomed to the buzz phrases and acronyms that we all know--EFC, FAFSA, and so on--but there's often a need for parents to have someone to whom they can say, 'Can you go back and explain that again in English?'"
But, if making sense of financial aid forms is daunting for the average family, imagine what it's like for non-English speaking families. Translating financial aid materials is just one part of the puzzle, says Joyce. "But you need to make sure you are translating not just into another language, but a level of the language that is acceptable to the population that you are serving."
The information, according to language experts, has to be very conversational to have the most effect. "Financial aid is a confusing process anyway," says Joyce, "and so many of the forms and brochures that families receive are at a very high reading level. Schools need to be sure that they're not talking above people's heads. They need to make sure that certain words translate, because not every word does. It would be worth the time to have someone on staff or hire someone who can provide you with that kind of advice, because you can make some real errors if you're not careful."
but they haven't yet been connected
to create a greater stream of people
who are financial aid literate.
-Jim Boyle, College Parents of America
The problem of language is especially important when it comes to need-based financial aid, in which students pay only their calculated family contribution, regardless of the cost of the college. Yet, for non-English speaking families, this information can often be misconstrued. Universities could also do a far better job of explaining what the financial aid award letter means, says Buck. More often than not, he says, the award letter doesn't have a side-by-side breakdown of the cost of attendance, so the family is left to do the homework. With the additional barrier of language, the results can be disastrous.
Buck tells of a young Guatemalan woman he worked with, a first-generation student attending a small, private college in New York state. Because of language difficulties, she was led to believe that her schooling was paid for. "Here's a 17-year-old Hispanic student whose parents don't speak English, and she gets a letter offering her thousands of dollars to pay for school," Buck says. "The letter announced a $14,000 award, but the cost of attendance was $28,000--but that information wasn't explained in the letter. She had no idea how much money her family had to come up with."
The student wound up borrowing $7,000 in her first year, while her parents, with a combined income of less than $30,000, took out a PLUS loan for another $7,000. "The family had $14,000 of debt, and she had only been in school for eight weeks," says Buck. "Obviously, if she progressed at that institution, her costs would go up every year, the loan limits increase every year and the parents would borrow more every year."
Buck says the school had a responsibility to help the student and her family understand what they were getting into--and to dissuade her from attending if necessary. He suggests that universities should identify the high-need, low profile, first-generation students and conduct workshops for them, before they set foot on campus, to really explain financial aid. "If, after that, the student and her family decide that she shouldn't attend the school, then everyone is better off," he says. "Because in all probability that student will not make it academically. She may end up dropping out. She may default on her loans. Her parents will certainly default--they are borrowing a significant amount each year, and they have no chance of paying it back. They were sent PLUS loan papers to sign, so they signed them. Someone from the institution should have called the family and said, 'This is what your four-year projection looks like, is this what you really want to do?' In the long run, it's better for the institution as well."
Boyle says it is important for universities to help parents understand that the financial aid process is a "new" process every year. "It's logical for families to assume that because their son was accepted at school, and has been given a certain aid award, everything will continue, as long as he passes his courses." That, of course, is not the case, so Boyle says families need to be reminded to resubmit their FAFSA each year.
"They often don't realize that if their financial circumstances change, it might change what they are expected to pay," he says. "I think that must be communicated up front so families aren't surprised."
Buck says financial aid counselors must look "beyond the numbers" to pay more attention to the needs of the people behind the financial reports. "I was working in an upscale area, where people were making an awful lot of money, but they had blended families. One man had remarried, but still had responsibilities from his prior marriage, along with the financial responsibilities he now had for his stepchildren. Even though he had a high income, he had no idea how the aid system worked, and how he could afford to send his kids to college without draining his bank account. He didn't know about private loans, or alternative loans, and he didn't know about positioning his children for scholarship opportunities."
"It's in a school's best interest to have families and students better educated about the financial aid process, so that when they arrive on their doorstep, the conversation and the interaction can be more productive," says Boyle.
The Internet, of course, is a great source of information, but it can be somewhat overwhelming. That's why Buck says schools should be in a prime position to capitalize on this need for information, but often don't.
"Schools can do a far better job of being proactive with their financial aid information as it relates to their Web sites. I know it should be simple, but it just isn't out there," he says. "We survey many college sites to see what they are offering. If I asked you today to take a look at five colleges in the U.S.--well-known four-year public and private schools--you would have to work hard to drill down, just to find the financial aid page and how to pay. Take that student aid information and put it right up front, rather than burying it in the third or fourth layer."
Boyle says, however, that university financial aid Web sites are getting better, but still need to clarify exactly what financial aid is and how it works by offering basic, easy to understand information. "The more basic the information, the better," he says. "That's the beauty of the Web. If a family wants to ignore that basic glossary, they can move right into the action steps that they need to take, and they won't have to plow through several chapters of information to get where they need to be. We're also seeing many more schools that realize it is as important to speak to parents with their Web sites, as it is to speak to students."
"There is a need, industry-wide, to present thorough, yet simple information," agrees Joyce. "Parents and students--and even schools--will tell you how complicated this process is from the outside." Sallie Mae's spin-off Web site, www.wiredscholar.com, recently won a Forbes magazine "Best of Web" award, partly for being easy to understand, because it is targeted to the student. "We designed the site to make sense to a high school junior or senior."
The site covers topics like FAFSA and EFC, as well as other forms of aid, such as award and grants, but presents the information in a way that is captivating and engaging for the visitor. "We're not the only site to do that, of course," says Joyce, "but I think there are too many resources that are very dry, and financial aid is not an intuitive process."
to present thorough, yet
-Tom Joyce, Sallie Mae
Joyce says schools should also take a hard look at how their message is being delivered. "They need to be able to think through the different touch points. The financial aid information can't just be one avenue, such as a printed piece or a flashy, robust Web site. And--despite the survey results--it can't just be face to face. More and more, they need to have all of the above, and take the message out into the community as well.
A number of universities are responding to that call with outreach programs and financial aid workshops for highs school students. Texas A&M University, for example, has had remarkable success with its minority student outreach program, where the school has deployed six outreach financial aid advisors to work in needy communities throughout the state. The idea is to bring the information directly to the students, rather than hoping they will try to seek it themselves.
"If schools don't have the staff or budget to do what Texas A&M is doing, they can partner with Sallie Mae or one of the other groups that are already offering financial aid workshops to the public. They can send a financial aid director, for example, to offer advice and answer questions, and they can distribute materials from their schools."
Simple steps can help maximize the message, says Boyle. "The dots are out there now, but they haven't yet been connected to create a greater stream of people who are financial aid literate."