Editor?s Note: This post was written by Jeff Selingo, a member of Education Sector?s K20 Task Force. Selingo, editor at large of The Chronicle of Higher Education, will be blogging regularly on The Quick & the Ed.
Chalk up yet another way families are being tapped out to pay for college: parent loans.
The amount of money distributed by the federal government through its main loan program for parents, the Plus loan, has more than doubled to $10.6 billion since 2000. Nearly twice as many borrowers are also taking out loans, according to The Chronicle of Higher Education and ProPublica. The Parent PLUS Loan, with an interest rate close to 8 percent, is essentially the last choice for parents desperate to send their sons and daughters to their first-choice school.
Families are looking under the couch cushions for pennies to pay for college these days, and higher-education institutions are searching every corner of campus for new revenue sources to finance their rising costs. The situation meets the definition of an unsustainable model for the future?for students, parents, and colleges.
In debates over college affordability, much is made about the cost side of the equation. But even if we find a magic-bullet solution, it?s unlikely to cut tuition prices in half overnight. We?ll still need to figure out how to pay the annual tuition bills with financial aid.
But the financial-aid system we currently have in place is severely broken. State and federal governments continue to pour money into the system even though we know little about what students actually learn for those dollars, if they finish at all. Institutions, especially private colleges, waste money on merit aid in a prestige race to pursue top-ranked students who would probably be better off at more selective schools and would likely go to college no matter how much aid they get.
To some colleges, financial aid has become little more than a marketing tool to fill a class. I saw that on full display last spring when I met with a small group of high-school seniors and their parents at a high school in Florida. It was a little more than week before the May deadline when they had to commit to a college, and they had brought their financial-aid offers from colleges so they could review them with counselors.
As a counselor went through the offers with one student and his mother, he glanced at his own homemade cheat sheet, and I quickly discovered why. Deciphering financial aid letters is almost impossible. Each uses different formats, difficult-to-understand abbreviations or mixes together loans and grants, blurring the lines between the two and creating confusion. The worst offenders suggest students are getting a great deal.
But no one polices these practices. Unlike when we buy a car or a house or sign up for a credit card, there are no standardized disclosure forms schools are required to hand out. The Obama administration has proposed a shopping sheet that all colleges should be required to use when they notify students about their aid packages. Ten colleges and universities have already committed to the model format.
While a good start, the biggest problem with the financial-aid system is timing. The college search starts as early as middle school for some students these days. By the time they reach their junior year of high school they often have their hearts set on a particular campus.
Families know little about what they will actually pay for college and, more important, exactly how they will finance it until a few weeks before a final decision needs to be made. During this period?March and April of the senior year of high school?the sales rhetoric from colleges turns to cold-blooded financial reality. Under pressure, families sometimes make bad financial decisions: students because they don?t know any better and parents because they don?t want to disappoint their sons and daughters.
It?s clear to me that the needed reforms for student financial-aid are unfortunately not going to come from higher education. Many financial-aid officials remain opposed to the model letter, as well as many other regulations.
Last week, I spoke to the annual meeting of the New York State association of college financial-aid advisors last week and several of them told me that they already feel over-regulated. A few said that even if they feel students are over-borrowing or a bad financial fit for the institution they feel unable to say anything because they work for the institution, not the families. Instead of being resources for students and parents, financial-aid offices at colleges have become just another cog in the wheel that brings students in the door.
miss america lana del rey saturday night live focus on the family packers vs giants giants score 2012 golden globe nominations texans
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.