October 11, 2012
Major New Student Borrower Survey Shows Startling Lack of Consumer Information on Financial Aid
Colleges Often Fail to Provide Adequate Loan Counseling, Students Support Standardized Financial Aid Letter
[Washington, DC] – Young Invincibles and NERA Economic Consulting released a report today entitled “Lost Without a Map: A Survey About Student Experiences Navigating the Financial Aid Process” detailing the results from a survey of nearly 13,000 college students and recent graduates with high levels of student debt. Strikingly, over 40% of respondents with federal student loans reported that they had not received federally mandated student loan counseling. The results suggest that students across the country are not receiving adequate information about the financial aid process – particularly students who need it most.
“This survey sheds light on a key failing of our federal financial aid system. Too many students are confused by the FAFSA, lack adequate counseling, and do not understand basic student loan terms,” said Rory O’Sullivan, Policy Director at Young Invincibles and co-author of the report. “Clearly colleges are not doing enough to provide meaningful student loan counseling, as required by law. Our survey also shows broad student support for the Department of Education’s recent initiative to promote a standardized financial aid letter. Students badly need this information and see their schools as trusted sources.”
The report included these key findings from participants:
- Over 90 percent of federal financial aid recipients surveyed would support standardizing the format, terminology, and content of financial aid award letters.
- Over 40 percent of federal financial aid recipients reported that they either did not receive accurate information about grants and loans, or did not know whether they had received accurate information.
- Students identified college financial aid counselors and the federal government as the two most preferred sources of information. Private loan recipients in particular want more information about their loans from the government.
NERA, a global economic consulting firm, and Young Invincibles, a leading youth advocacy organization dedicated to expanding opportunity for 18- to 34-year olds, jointly designed the online survey. Harris Interactive programmed the questionnaire and hosted data collection on its servers.
The survey population was comprised of individuals with at least some higher education (i.e., any education beyond high school) since this is the group of people who are most likely to have had direct experience with financial aid in the form of loans and grants. Email invitations were sent to individuals on YI’s mailing list, as well as to the mailing list of one of YI’s partner organization, Student Debt Crisis. In total, the survey reached 1.5 million email addresses and received 27,000 responses.
The report can be viewed here: http://www.nera.com/nera-files/PUB_Student_Loan_Borrowers_1012.pdf
Young Invincibles is a national organization committed to mobilizing and expanding opportunities for all young Americans between 18 and 34 years of age.