Click on the images or names below to see the financial letters sent by those colleges. You can then click on the decode button to find out how the real value of the awards can differ from the impressive totals on the letters. (FinancialAidLetter.com)
|University of Arizona|
|University of Pittsburgh|
KAI RYSSDAL: Student loan companies and college aid officials have a couple of weeks’ respite before they have to face Congress again. Senator Ted Kennedy held a hearing into shady dealings in the loan business yesterday. The House Education Committee takes its look into the $85 billion college aid industry on May the 10th. Which will be just a little late for students starting classes next fall. Because the deadline for sending a deposit to secure enrollment is May the 1st.
Commentator Kim Clark’s been looking over some of the letters colleges send out with their packages. And she suggests students — and their parents — read between the lines.
KIM CLARK: Typically, the college award letters that students get are on fancy letterhead. They’re full of congratulations. And they often include impressive-sounding scholarships like “Leadership awards” or “Presidential grant.”
But they’re also full of jargon. Students thrilled by the big numbers on their awards might not realize that the money isn’t always free.
The letter might say the money is coming in the form of, say, a SEOG, or a subsidized FFELP Stafford, or a PLUS. It makes a huge difference.
A SEOG is an outright grant. But a subsidized FFELP Stafford isn’t. That’s a pretty cheap student loan. A PLUS is a pretty expensive parent loan.
Another problem is that many schools don’t spell out how much the total cost is really going to be. Federal law requires schools to provide total cost information, but many only reveal it if a student asks.
One of the financial aid directors recently suspended for allegedly accepting lender money told me a couple of weeks ago why she didn’t put cost information on her award letters. “We want them to look at all the aid they’ve gotten,” she said.
Of course, she does. If parents saw that even after a prestigious-sounding $10,000 scholarship to a private school, they’d still have to cough up almost $40,000 a year — well many would run the other way.
Students often end up burrowing through catalogues or web pages to try to find prices for tuition, fees, room and board. But many schools conveniently forget to tell their students to budget another $3,500 or so for textbooks, travel and miscellaneous expenses.
University officials like to say a college education is so special that it shouldn’t be treated like shopping for a car. They’re right: It’s more expensive, and more important. So at the very least, students and parents should be told the sticker price.
RYSSDAL: Kim Clark is a Kiplinger Fellow at The Ohio State University this semester. She’s on leave as a senior writer at U.S. News and World Report.
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