Paying for College

There was an interesting teaser in the Campus News email today, mentioning that the Education Department is seeking feedback that would help simplify financial aid letters.

In the letters I’ve seen, the financial aid is listed as a line item that causes a lovely drop in what you owe RIGHT NOW but says nothing about what will be waiting for you.

The Education Department is thinking of requiring colleges to address this issue, so that the financial aid letters show you what you owe now – for the current school year – and what the cost of deferring expense until post graduation will cost you later.

The letters can be a little cluttered – this scholarship, some money just ‘cus, this loan, that grant … there’s no bottom line that talks about what is being borrowed and the results of interest and time on that borrowing.

It wasn’t until after my son was accepted (and this is kid number 2) that anyone at a college talked about how much debt was reasonable for them to take on and related this number to their anticipated major. Kind of late – in my game, anyway.

Perhaps that’s what should be on the aid letters. Your letter should show what it will cost you this year, what it will cost you, assuming a four year stay at the university before you start making payments and the current information about how long it will take you to find a job in your major, an average of recent starting salaries and the percentage of that income that you’ll be forking back to pay off your loans.

Perhaps no one would go to college, as I’m pretty sure the time to find a job and starting salary averages are rather hideous these days.

But I believe that information is power and that having all that – laid out in front of a student – would be very empowering. As it might well empower them to walk away from more pricey educational options, it is unlike to happen. What ought to be and what is … seldom do they meet.

 

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