College-bound students and their parents have an extra-tricky challenge ahead of them as they analyze financial aid award packages this spring.
School aid packages—often criticized by financial aid experts and analysts as confusing, misleading, or underestimated—may be incomplete this year. With proposed budget cuts pending at both the state and federal levels, some facets of government aid to students and institutions are in flux. Some schools have opted to leave out components of aid that may change from students' award packages; those schools and other institutions may have to send out revised financial aid packages once budget discussions conclude.
"There's a lot of things in play, and that's going to make this year harder for families to assess what college is going to cost them," says Mark Kantrowitz, founder of Fastweb.com and Finaid.org. "Even if they successfully decode the financial aid award letters, that's only a projection. The reality may be significantly different, much more so this year than in previous years."
[The U.S. News College Admissions Insider exposes the college costs guessing game.]
Among proposed budget changes is a sweeping federal cut to the Pell Grant program, which currently aids more than 9 million of the neediest college students. The U.S. House of Representatives passed a continuing resolution in February that would drop the maximum award from $5,550 to $4,705 for the fall of 2011 and would make about 1.7 million students who receive smaller amounts of aid ineligible for the funding. In the Senate, the cuts are still being debated.
On the state level, cuts to higher education budgets have already been levied in at least 43 states since 2008, according to the Center on Budget and Policy Priorities, a Washington, D.C.-based policy research organization, and some states are considering slashing more funding. In Pennsylvania, Gov. Tom Corbett recently proposed a cut of about $625 million to higher education, the largest decrease of its kind in the country. In Texas, proposed budget cuts of about 40 percent are so large that colleges and universities were urged not to include state aid estimates in financial aid award packages this year, as the offers could shrink or disappear before the start of the fall semester. Appropriations cuts in some states could also bump up tuition at public colleges as early as the fall semester, Kantrowitz notes.
With this year's uncertainty across several financial factors, "it's harder for us to tell a student what is happening," says Richard Nicholas, vice president of student life at Texas Woman's University. "It's harder for a student and their family to know what to do."
As students and parents try to wade through the murky financial aid climate, be wary of broad comparisons across award packages, experts say. Since there is no universal format for financial aid award packages, institutions have leeway to provide different estimates for things like travel and book costs—and this year, the same goes for government aid.
While some schools are sending out estimates of full Pell Grant funding, other institutions may be omitting the award until it is a definite, Kantrowitz says. Make sure to use consistent amounts of Pell Grant funding as you analyze different award offers, he notes, as that amount of aid will not differ widely by institution.
[See 10 ways the Pell Grant program could be saved.]
Many schools, including Texas A&M University—College Station, enclosed letters with financial aid award packages detailing what portions of aid may still change. Students' award offers will be repackaged, if necessary, after budget negotiations, says Delisa Falks, Texas A&M's director of financial aid, though those governmental decisions may be made after the college decision deadline of May 1.
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Sue of OH 5:51PM April 06, 2013
Sue of OH 5:50PM April 06, 2013