Making college costs easier to understand
A letter of financial aid. With interest rates on some student loans about to double, the Obama administration joins with colleges to provide clearer guidance on the real price of school.
Kai Ryssdal: If you have a child going to college in the fall, you have our congratulations and condolences all rolled up into one. Congratulations for getting them this far. Condolences because, at least on the college part, we know what you've been through.
First, the applications. Then the agonizing wait for the fat envelope or the happy email. Then deciding which school to pick. And -- and this is where you come in -- trying to figuring out how you're going to pay for it.
For a lot of families, financial aid is a trip down the rabbit hole. Forms and formulas and expected contributions and who knows what else. Today, the White House announced a deal with college and university presidents to simplify things.
From the Marketplace Education Desk at WYPR in Baltimore, Amy Scott reports.
Amy Scott: Andrew Dooley just graduated from Central Michigan University with about $35,000 in student loans. Here’s how those loans were described in one of a pile of financial aid letters he got from the school.
Andrew Dooley: It lists an STS1 federal direct subsidized loan, an STU1 federal direct unsubsidized loan, and an STUS federal direct unsubsidized loan additional.
Scott: And what does STUS mean?
Dooley: I have no idea.
But at least he knew they were loans. Financial aid expert Mark Kantrowitz of finaid.org says a lot of schools don’t spell out the difference between grants and scholarships, which don’t have to be paid back, and loans.
Mark Kantrowitz: Colleges often use language that describes loans as reducing the college cost. That financial aid package includes loans which have to be repaid. They don’t reduce your cost.
Today 10 private colleges and state university systems agreed to clarify that difference in financial aid offers. They’ll also tell students how much they can expect to pay each month on their loans after they graduate.
Education writer Kim Clark created the website financialaidletter.com to decode the often baffling language of student aid. She says the hope is with clearer information, students and parents will make better choices.
Kim Clark: Yeah, I think some parents, hopefully, will take a step back and say whoa, no, you know, we can’t afford this.
But recent grad Andrew Dooley isn’t so sure.
Dooley: I think at the end of the day everyone’s just going to sign, because that’s what it takes for most people to go to college now.
And whatever the cost, he says, college is still regarded as the surest ticket to success.
I’m Amy Scott for Marketplace.