The Chronicle of Higher Education on November 14, 2012
by Caitlin Peterkin
With college affordability a national issue, students overwhelmingly support an overhaul of the federal financial-aid system, according to Young Invincibles, a youth advocacy group. At a briefing on Capitol Hill on Wednesday, the group presented findings from a recent survey and held a panel discussion to explore potential reforms.
“Students are trying to figure their way through a process that’s incredibly confusing and, because of that, support a simplification of the financial-aid process,” said Jen M. Mishory, deputy director of Young Invincibles. What students want is more information and better guidance to graduate with manageable debt, the group said.
In the survey, of some 27,000 students and recent graduates, 98 percent of those with federal loans and 87 percent of grant recipients said obtaining financial aid had allowed them to attend college. But many respondents said they had received inadequate information and counseling on their aid options. About two-thirds of private-loan borrowers said they didn’t understand the differences between private and federal loans. And among high-debt borrowers, 40 percent reported never having received loan counseling. (Young Invincibles and the firm NERA Economic Consulting released some survey findings about heavily indebted borrowers last month.)
Colleges are required to give any borrowers they enroll both entrance and exit counseling, but how institutions offer that guidance varies. “Students don’t consider clicking through pages of information online ‘counseling,'” Ms. Mishory said.
‘You’ll Sign Anything’
At the briefing, the group and its panelists called for extensive changes in how students get information and counseling on loans. The consensus was that the process should begin even before students decide whether and where to enroll.
Kevin Opoku-Gyamfi, a senior political-science major at Northeastern University, said that counseling on financial aid and borrowing should come at the beginning of the college search. He suggested mandatory presentations in class from guidance counselors in students’ junior or senior years of high school.
J. Domenic Giandomenico, director of education and work-force programs in the U.S. Chamber of Commerce’s Institute for a Competitive Workforce, agreed that counseling needed to be done earlier than the end of students’ senior year of high school.
“Once you’re ready to go to college,” he said, “you’ll sign anything.”
In the survey, students recommended making counseling more personal, and expanding or clarifying information on estimated monthly payments, interest rates, and repayment and consolidation options.
“I have so many different loans, with different interest rates,” said a survey respondent identified as Jacqueece M. “They are all on different schedules, and it’s a lot to keep up with.”
As for financial-aid award letters, more than 90 percent of respondents favored a standard format. Federal officials have proposed a uniform Financial Aid Shopping Sheet, but for now colleges are not required to use it.
Many colleges’ letters include such difficult language that they’re a challenge to decipher, said Julie M. Morgan, associate director for postsecondary education at the Center for American Progress, and a panelist here on Wednesday. She is a lawyer, she said, and still finds the letters complicated.
Bolstering Pell Grants
Beyond regulation, a majority of students would like to see greater federal spending on financial aid, Young Invincibles said. Three-quarters of respondents to the survey, for example, opposed cutting Pell Grants.
The group has proposed several reforms for the Pell Grant program, including two new components it calls PellWorks and PellPlus.
The first program would convert Federal Work-Study dollars into Pell funds for community colleges and other institutions that could demonstrate their ability to place students in high-need skills areas. Rather than giving more Federal Work-Study money to colleges that stay in the program, PellWorks would ensure allocations to institutions where students have greater need, the group said.
PellPlus, meanwhile, would reserve the Federal Supplemental Educational Opportunity Grant for colleges that enroll more Pell recipients and graduate the highest percentage of high-risk students. That proposal is somewhat similar to a plan President Obama laid out in his 2012 budget request.
In addition to those recommendations, Young Invincibles called for greater transparency around financial aid and loans. The group also lobbied for a single federal loan program, as well as borrowers’ automatic entry into the federal income-based repayment program.
While the advocates acknowledged that such reforms may take years to realize, they argued that legislators and federal officials must listen to students, as policies made without their input could be ineffective or even detrimental.
“We’re at a turning point in our country in higher education,” said Aaron Smith, co-founder and executive director of Young Invincibles. “Congress should be more deliberate in reaching out to students. If we are engaged early, we can be powerful allies.”