Friday, March 29, 2013

Financial Aid Award Scandal

The obtuseness of financial aid award letters is a real scandal.  I've got all these kids who do not have a penny to their name getting packages with ten's of thousands in loans and unmet need.  

I did a presentation to about 75 of our kids who had not applied to college yet and were going to attend our on-site admissions event; filled with low endowment colleges with empty dorm rooms...just about the worst offenders.

I gave a speech telling that that they would be paying over $100 a month, sometimes a lot more, for every $10,000 they borrow.  I ask them what their life would be like if they wanted to be a social worker...$80,000 of undergraduate debt, $60,000 of graduate debt...Maybe $1600 a month loan payments.  How much do you think a social worker earns a month after taxes?  maybe $2500.  Can you pay for rent, food, phone, utilities, car payment with this?  No way.  You'll be living at your parents' house for the next 16 years, saving nothing, driving a beater car and never going out to dinner or clubbing.  A Pell grant will cover all the costs of community college.

This gets their attention.  And I know no one ever said this to them before.  They all look at me with this WOW look.  We give out all the wrong messages to our economically disadvantaged kids.  We should be telling then how to graduate college with the least amount of debt, about the value of community college and how the transfer college one graduates from does not write "community college transfer" on the diploma.  No.  Even parents that do not have a dime saved for college say "we will make it happen."  You are "selling short" any kid you recommend community college to.  That is my most blunt talk about college now with parents and students.  It used to be about hw they set their ambitions on something that has about 1/20 chance of succeeding with the very best students.  Now it is frank talk about HOW ARE YOU GOING TO PAY FOR THIS!

The parents put their  head in their hands and mumble that they know I am right, but still cannot  get the gumption up to tell their kids....until the kid gets accepted and is told you cannot afford it, or the kid attends for a year and the college will not let you register for courses because you had an unpaid bill.  So you cannot even get a transcript, you've got $20,000 in debt that cannot be discharged even in bankruptcy and nothing to show for it.  I keep hearing about this over and over again.

Maybe my next article should be "The Great Ripoff" about how students are drained and they and their parents indebted in what is a huge con job.  The hard sell marketing, college admissions tools (private counselors, SAT prep, etc.) but then the whole student loan debacle (don't get me started on the Student Signature Loans!), and the great mass of students who "go to college", as if this was an end unto itself.

Anyway, just some thoughts I had for the day.
In response to NY Times Op Ed

The Ivy League Was Another Planet

There are a few things that one might take from this article:
1) That good counseling is really important. The writer writes that he did not apply to colleges that did not accept the ACT, which is almost none, and that he signed up and took the wrong SAT II test, despite that fact that you can change this on the test day.
2) That if he "barely got through algebra", even if he was an elite student in Nevada, he would not be going to one of the nation's most selective colleges.
3) Why should this student aspire to go to the Ivy League? Because of the brand? Most of the schools in the Ivy League do not offer a superior education to quality public colleges and a great study showed that students who were accepted to the Ivy League and chose to go elsewhere did as well as those who chose to go to the Ivy League (disclosure- my son turned down this level college to go to Rutgers for free, something he says is the best decision he ever made).
4) Many well endowed colleges are reaching out to the rural poor, but often a lack of educational opportunities make many of these students not competitive in the pool (as is also true of the urban poor) of applicants.

5)  Even if a small number of mind-numbingly rich colleges did more to reach out to economically disadvantaged students, few others could match their largesse.  Most colleges now are really squeezed financially and few want to increase their costs and reduce their revenues.  There are a small number of colleges that could afford to make a real commitment to recruit and enroll more high need students, but in the great scheme of things, it would end up being more symbolic than substantive
6)  I have spoken with the Deans of some of the most selective colleges in the country and some are doing just this, but curiously, quietly.  I think the impression is that more resources dedicated to recruiting students who are economically disadvantaged might squeeze out other goals of recruiting and enrolling others who are also under-represented on the campuses.  These colleges are raising and dedicating funds for this purpose so as to not cut into recruiting and paying for other under-represented groups.