Kai Ryssdal: As college kids go back to school, restaurants and shops around campus are getting a boost. But not all the money that’s being spent comes from students’ summer paychecks — or their parents’ pocketbooks, for that matter.
In the world of college financial aid world, the first couple weeks of class are known as refund time. Marketplace’s Eve Troeh explains.
Eve Troeh: Pierce College is a public, two-year school in suburban Los Angeles.
Anafe Robinson: We are definitely known for our nursing program. We also have a lot of students who transfer to four-year universities.
Anafe Robinson is financial aid director. Right now, students call her office every day, asking one question:
Robinson: Pretty much: ‘When do I get my money?’ That’s the phrase that we receive all the time. ‘When do I get my money?’
They mean their so-called refund from federal student aid. About half of Pierce’s 15,000 full-time students get Pell Grants, and many also take government loans. The school takes its share for tuition — at Pierce less than $600 a semester.
The rest goes directly to the student. Often thousands of dollars. What’s it for?
Robinson: Room and board, books and supplies, transportation and miscellaneous expenses.
Robinson says it’s clear that money is to help with education, though students can spend it however they want: a new stereo, video games, clothes. Some then show up distraught, out of funds by semester’s end. I may have been guilty of this myself…
But the real problem isn’t how students spend the money, it’s that financial aid offers are confusing, says Lauren Asher at the Project on Student Debt.
Lauren Asher: It’s not always clear in that letter what is a loan, what is a grant. Students might not see that they have a choice whether to borrow some or all or none of that amount.
Asher says most financial aid students don’t get enough help. They wind up working full-time, or enrolling in college part-time to save money. Both up the chances that a student won’t ever finish a degree. And that, she says, is the real waste.
I’m Eve Troeh for Marketplace.
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