5 Big Financial Aid Lies

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My colleagues from Florida, New York, North Carolina and Tennessee have said it well so I will not attempt to elaborate except to say to the author that if you would like to walk in our shoes for a day we could arrange for you to have that one day experience. That way you may gain some significant insight into what we really face. Otherwise you have provided only misleading and less than helpful information to your readers. Having entered the FA profession 20 years ago in mid life, it has proven to be the most honorable and rewarding pursuit I could have followed. The daily challenge of working with federal and state regulations that change annually and trying to explain a very complex process to families and friends is always present. The fiduciary responsibilities as an aid administrator and tax payer, balanced with a moral and professional commitment to help all who seek our help makes the pursuit worthwhile in spite of the annual barrage of articles from authors who only have half the story.

Rich Heath of MD 10:37AM April 07, 2010

A better title to this article would have been "How Financial Aid Administrators Help Student and Parents Through the Mess Congress Gave Us." Every year we are handed new programs and new regulations on current programs, and we every year we get the same responce from the Dept. of Education when we have questions or concerns, "make it work", so we do. We do everything in our power to make sure students understand the difference between grants and loans, how they need to budget carefully so they do not graduate owing a huge amount of loan debt, and they do have the responsibility of keeping their grades and GPAs up. Parents need to pitch in by teaching financial literacy from a young age, putting money into savings accounts, and encouraging their students to apply for scholarships.
99.9% of the FAOs I have met are the most honest, hard working, and frustrated people in higher education. None of us got into the business becuase of money or glory; we are the least paid and least appreciated people on camups. So why do we do what we do? The one answer you will get from every FAO is we do it for our students. When I see a former student doing what they were trained to do and they recognize me as The Financial Aid Lady, I know my job made a difference.

Trudi of MT 10:27AM April 07, 2010

I'm not a financial aid counselor/advisor in a university. I am, however, a private consultant. I find absolutely nothing misleading about the term "Estimated Family Contribution;" nor have I ever had issues with the way financial aid offices have explained this concept to families/students. As mentioned previously, it does represent the amount the government expects the family to contribute (directly or indirectly) towards their student's costs. I often have clients who misunderstand the report coming from Dept. of Ed., but once the concept is explained, they ave no issues.
I also disagree with the information presented on prepaid/guaranteed tuition programs. Program sponsors are very up front about requirements, obligations, potential outlays and problems and all of these issues are covered also in the contracts the clients sign. If the client doesn't read the fine print, its not the fault of the sponsor. You really do need to understand what it is you are getting into before you sign on the bottom line.
The TEACH Grant issue, its a minor one. I live in a state where the state reps love to refer to these programs as "conditional grants." Its a grant with some pretty strong conditions. If you meet the conditions, it stays a grant. If you don't you repay the funding. You can call it a "loan forgiveness program" or a "GROAN" if you like. It won't really matter though. Many students still won't read the fine print on the contracts they sign and will be surprised if they have to repay.
There really is only so much financial aid professionals can do when it comes to providing information. Excited/nervous parents and students tend to take longer to come to terms with the reality that (1) there are things they have to do, (2) the government/school won't pay for everything, (3) they're going to carry at least some debt, and (4) at some point they're going to have to reach into their pockets and pay (or repay) for their education.
PreK-12 education is a legislated right. Higher education isn't - its an option. If you elect to participate in this option, you need to come to terms with the terms of payment. If you can't, find an advisor and sit with that individual as you go through the process step-by-step. That's what school advisors (and private consultants for that matter) are there for.

Consultant in TX of TX 10:00AM April 07, 2010

I drive a Ford Explorer; I can't afford a Cadillac Escalade. We live in a three bedroom ranch; we can't afford a mansion. These are choices we make as a family based on our income and budget. I'm not sure why, as a society, America has decided that these concepts shouldn't apply to higher education. I'm also not sure why we seem to believe that our children deserve a college education, but we shouldn't be required to shoulder any of the cost. As a financial aid administrator at a Community College I work with students and families every day that have made a choice to attend a low cost institution because (in many cases with the assistance of financial aid) that is what they can afford. I applaud the sensibility that led them to this choice, and I serve them in with honesty, integrity, and admiration.
My wife and I are both college administrators and public servants. As such, we're not getting rich, but we make a good living and we have the satisfaction of knowing we're assisting students in obtaining their dream of a college degree. We're also parents with a son who attends one of the higher priced private institutions in the country. His EFC, based on the income of two public servant parents, is well above the level that would provide him with free or subsidized assistance from Federal Student Aid. Having been a Financial Aid Administrator for 10 years, I'm convinced his EFC is accurate and fair.
Prior to his enrollment the college of his choice, we had to examine our family budget and make a decision as to whether or not we could afford this. We decided that if we made sacrifices we could, so we happily sent him off to college while we stayed home, counted pennies, and watched our savings and home equity shrink. If we could not have afforded the college of his choice, we would have helped him find a good college that we could afford. We would not have expected anyone else, including the government or the institution to pay for those expenses.
Financial Aid is here to assist students who cannot afford to pay for college themselves. It provides those who need a leg up with that assistance. It is not intended to allow me to live above my means, even in regards to my children's college educations.
There are no lies in the process, but it is a complicated system with many rules and regulations. It could and should be simplified. Financial Aid Administrators have been calling for that for years. It hasn't happened, and may never happen, so in the meantime it is what it is. And unfortunately, there are many students and parents who don't invest the time to research the many details involved in the financial aid process. My peers and I attempt to assist in them with honesty and openess, but ultimately it is up to the student and family to gather information and make the best decision based on their particular circumstances.
And that decision may involve their child attending an instituion that is closer to a "Ford" than a "Cadilac".

David of OH 9:49AM April 07, 2010

I have been in financial aid for nearly 20 years. There are those that will read this that have been in this profession for even longer (my time is small compared to some of you). Financial Aid is not a career that one says when they are 10, "they want to grow up and be a Financial Aid Director". It is more a profession that once you get that first thank you, or that mom that cries because you were able to help her daughter fulfill her dreams, that you realize you are an agent of change, and you are hooked. Along with that, however, are the burdensome regulations both state and federal, as well as the competitive market. Our jobs are tough, but we stay to help students. That is our primary goal.
The financial aid office is the one office on campus that must give great customer service to many different constituents and find a way to make all those rules work together. I have said many times if Congress truly wants to help the needy students then why not make awards less complicated and just give the money away. Take the Teach "Grant" for instance. I don't know of any FA professional that thought this was a good idea. Call it what it is, a forgivable loan. If we are in such need of teachers, then award a true grant to upperclassman only in those needed areas and be done with it. Let the risk befall our tax system if they don't teach. Withhold a tax refund if they don't send in a certification that they are teaching each year. I have to spend more time counseling that is really a loan than I should, and the student has to read a 23 page agreement to serve- give me a break! Mortgage contracts are not even that long.
Congress needs to stop making programs in name only and make programs to really help. I tend to agree with EFC. It truly is only a PGI- Pell Grant Indicator. That is what it used to be called, why was that changed? If it isn't broken, don't fix it.
As for the merit based aid system, I wish with all my heart that I could just meet financial need. When enrollment officers started trying to find an edge to recruit in the competitive environment the flood gate was open and Financial Aid for the needy derailed. In order for this to change, our whole country must change. There is too much of a sense of entitlement. We must realize that if you can pay for education you should. If more colleges retreated from the merit based system, we could return to a need based system, but can colleges survive from that type of risk? Which colleges are willing to find out?
As for negative financial aid articles, we must take them with a grain of salt. We know we work hard; we know we are doing our best to help the most students; we know that sometimes we are between and rock and hard place.
Happy Packaging, folks!

FA Director of TN 9:35AM April 07, 2010

As a financial aid administrator with close to 30 years experience, I can assure you that much of what you say is accurate. While I probably wouldn't use the word "lie", our financial aid vocabulary can be confusing.
I always tell families that the EFC is a rationing device. It is how we distribute limited funds to the largest number of people possible. It does not reflect a family’s ability to pay. It never has and never will.
Students are always confused by the term "aid" and usually think it means grants. All of my publications carefully define aid to include loans which must be repaid. Even with efforts to explain the terminology we use, students still get confused.
Students are also confused by our acronyms. Financial aid has a language of its own and students and parents should ask question when they don't understand what we are talking about. Financial aid administrators should work to avoid technical jargon which is confusing to parents.
Much of the language used by schools comes to us from the US Department of Education, who is told what they have to do by the Congress. If we are going to make a real difference in what students are told, it is going to have to start with Congress. EFC, Cost of Attendance, definitions of aid, TEACH Grant all start there.
Those of us in financial aid need to be determined to keep our language clear and understandable. We should make every effort to clarify the misleading terms we are often forced to use. Keeping our language student centric will actually make our job easier.
While "lie" isn't the right term, confusing is. The information being provided is truthful, just difficult to understand by the average person on the street. We agree that we should all work to simplify our communication with families.

Bill Spiers of FL 9:24AM April 07, 2010

Let me ask you something. If a family's EFC is $3000, and a college's cost of attendance is $50,000, who is supposed to pick up the extra $47,000? The taxpayers? The institution? The tooth fairy?
It never ceases to amaze me how many families expect to get a free or heavily discounted education. If you wanted to by a Mercedes and could only afford a Hyundai would you expect the dealer to kick in? I doubt it.
College is an expensive choice, but it's just that--a choice. Families should be encouraged to start saving early for their children's education, or exploring other options (community colleges, student loans, etc.). We do what we can in financial aid offices, but we're not miracle workers.

Another FAO of NY 9:23AM April 07, 2010

Ms Clark, thank you for exposing the truth about many misleading financial aid practices. Whether intentional or not, many practices run counter to standard, commonly understood business practices.
Where else can loans be "reversed", leaving students with huge tuition debts and unable to return to school? We all see students who have intractable obstacles to completing a degree.
And "Teach Grant" IS one of the leading scams in America.
Though financial aid administrators are not liars, many untruths are being told.

Jean of MD 9:11AM April 07, 2010

I find your article offensive to the thousands of hard-working, underpaid, and unappreciated financial aid administrators across the country. Do you really think we AGREE with the calculation method of a student's EFC? Of course not! But as others have stated we do the best we can with what CONGRESS has given us.
We, the financial aid offices, are told what to do by the Dept of Education. We don't make the rules, we merely enforce them. IF we were allowed more input, you can be sure the process would be more fair for students and parents, and less burdensome for our offices.
Just don't shoot the messenger, please! If you or anyone else are unhappy with the way financial aid is determined, then contact your congressman to complain. We've been complaining for years about the federal methodology, but it's done us no good whatsoever.
As an aside, I would venture to say very few of us in this profession are in it for the money. No one in our office has gotten a raise in nearly 5 years, and yet we continue to work hard and provide the students and parents we serve in a professional manner.
Please take time to consider what you write before you dismiss an entire profession as being liars.

Rose of FL 9:03AM April 07, 2010

While I agree "lie" is a strong word, there is some engrained, seemingly purposeful, created confusion. In addition to your list I would add "aid" among the terms. "Aid" is a broad term that fails to distinguish between the aid you have to pay back (loans) and the aid you do not (grants, etc.) Private colleges use this misconception to demonstrate that the out-of-pocket cost while attending school.
If we were to distinguish between "aid" and "assistance" student/borrowers there would be less surprises later.
Else, excellent piece.

Brash1 of WI 8:45AM April 07, 2010