If you have ever read an article or a column on financial aid for college students, you have undoubtedly come across the name Mark Kantrowitz. He’s a guru of financial aid and an often quoted media expert, who recently moved from the websites FinAid and Fastweb to take a new job with Edvisors Network.
A colleague of mine at The Chronicle of Higher Education, Beckie Supiano, recently wrote a fascinating profile of Kantrowitz and asked him to lay out the five things he would change about financial aid. Both are worth a read, if you have the time.
There were a few proposals Kantrowitz suggested that I think are worth repeating here.
Standardize financial aid award letters. Unlike when we buy a car or a house or sign up for a credit card, there are no standardized disclosure forms colleges are required to hand out when they award financial aid. Each college 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. No one polices these practices.
Switch to “prior-prior-year data” as the basis for financial aid awards. Before we start looking for a house, we often are pre-approved by a bank and know how much we can afford. Sure, many Americans stretch and pay more than they should for a house, but the system mostly prevents someone who can only afford a $250,000 home from buying a million-dollar home.
But unlike other major purchases in life—a home, a car—many 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. Right now, colleges hook prospective students on emotion, in hopes they will enroll at any cost. 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.
Using “prior-prior-year data” allows families to have a better idea about how much a particular college will cost them while they are looking, not while they are deciding where to go.
Simplify the federal loan and grant programs. Kantrowitz suggests subsidized interest should be eliminated, and the savings redirected into the Pell grant program. A commenter on the piece suggests that Pell grants be limited to use at in-state public colleges. “There is simply no good reason to do your B.A. in English outside of Ohio if Ohio is your home state,” the commenter wrote. What happens when you live in California and there’s no space at the public universities for you? Another idea to consider is using aid to encourage colleges to enroll and graduate more first-generation and low-income students. You can read more about that proposal here.
What changes would you make to the financial aid system?
Photo Credit: Moraine Valley Community College
