The Language of Financial Aid - Broh

The Language of Financial Aid - Broh

The Language of Financial Aid College Board Forum New York City, NY October 27, 2011 The Language of Financial Aid C. Anthony Broh, Broh Consulting Services, LLC Alison Rabil, Asst. Vice Provost, Duke University Higher Eds Own Language 1. Cost Language 2. Price Language 3. Financial Aid Speak 4. Payment Language

Self Help Some Graphic Background Self Help Loans Job Some Graphic Background Self Help Loans Job

Some Graphic Background Equivalent Concepts Higher Eds Own Language 1. Cost Language 2. Price Language 3. Financial Aid Speak 4. Payment Language Institutional Costs

Cost of One Year of College Personal Cost Language Cost Language How much does it COST to provide one year of education for one person? Institutional Cost Trends Average Expenditure per FTE Student

$60,000 $50,000 T otal Education Instruction Student Services Research Net Scholarships $40,000 $30,000 $20,000

$10,000 $0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: Delta Cost Project, Trends in College Spending 1999-2009 Higher Eds Own Language 1. Cost Language 2. Price Language 3. Financial Aid Speak 4. Payment Language Institutional Costs

Cost of One Year of College Personal Cost Language Price Language What is the PRICE a student pays in a Comprehensive Fee of Tuition, Fees, Room, Board each year?

Price Trends Published Price of Tution, Fees, Room, and Board at Public and Private Four-year Institutions PublishedPrice at Priv ate 4-Year Published Price at Public 4-Year $40,000 $22,260 $30,000 $25,000 $15,210

$20,000 $8,380 $15,000 $10,000 $5,000 Source: College Board 2010 2009 2008

2007 2006 2005 2004 2003 2002 2001

2000 1999 1998 1997 1996 1995 1994

1993 1992 $0 1991 Constant (2007) Dollars $35,000 $35.640 Higher Eds Own Language

1. Cost Language 2. Price Language 3. Financial Aid Speak 4. Payment Language Institutional Costs Cost of One Year of College Personal Cost Language

Financial Aid Speak How much does this FINANCIAL AID package do to help a student pay for college this year? Financial Aid Speak Expected Family Contribution Student Budget Award Package Gap Merit-based Aid Need-based Aid

Need Need-blind Admissions Financial-Aid Speak Evolve from the work that Financial Aid Administrators do Are accurate for an earlier era Are Institution centered Are not consumer friendly Are often misunderstood Are sometimes misleading Higher Eds Own Language 1. Cost Language

2. Price Language 3. Financial Aid Speak 4. Payment Language Payment Language What is the PAYMENT a family will make for each year of college? Institutional Costs Cost of One Year of College Personal

Cost Language Payment Language Price of Attendance Net Price Scholarships Grants Family Resources Student Resources Parent Resources Past Resources Current Resources

Future Resources Payment Language Discussion 1: Jobs Hours of Work per Week to Pay for College 120 100 Priv ate 4-year Public 4-year Public 2-year

80 60 Full time Job 40 Half time Job 20 Source: Postsecondary Education Opportunity , July 19, 2009

2007 2004 2001 1998 1995 1992 1989

1986 1983 1980 1977 1974 1971 1968

- 1965 Hours per Week at Minimum Wage Rate 140 Discussion 2: Loans Amount of Interest Paid for 15-Year $20,000 Loan with Fees and Interest Rates from College Loan Programs Fixed Rate Massachusetts NIL

For Students from Low Income Families Perkins College Loan Subsidized Stafford Unsubsidized Stafford PLUS - FDSLP After Fed & M A T axes Before Fed & M A T axes PLUS - FFELP

MEFA, immediate payments MEFA, deferred payment Home Equity Unsecured Private Loan Variable Rate Home Equity Line of Credit Private, Alternative, or DTC Loan, Credit Union Private, Alternative, or DTC Loan, Private $0 $5 $10

$15 $20 $25 Thousands of Dollars $30 $35 $40

Discussion 3: Debt Average Debt at Graduation for Students with Stafford Loans (Constant 2007 Dollars) $25,000 75.0% $20,000 60.0% $15,000

45.0% $10,000 30.0% Private, 4-Year: Average Amount Public, 4-Year: Average Amount Private, 4-Year: Percentage Public, 4-Year: Percentage $5,000 15.0%

$0 0.0% 1989-90 1992-93 1995-96 1999-00 2003-04 2007-08

The Language of Financial Aid C. Anthony Broh, Broh Consulting Services, LLC Alison Rabil, Asst. Vice Provost, Duke University What can financial aid do? Provide translations: Net Price Calculator Disseminate information in a variety of ways Tailor information to different audiences. Standardize award letters What can guidance counselors do?

Learn how financial aid works Create partnerships with area colleges and universities Tell financial aid administrators what you need and how you need it Teach families how to navigate the system and manage the process. What should parents and students do?

Research which schools are the best fit Research financial aid policies Apply by the deadline Conduct family discussion about priorities in choosing a college and obligations in paying for a college What should parents and students do? Compare calculated parent contributions and loan amounts Discuss the financial aid package with the school you want to attend

Prepare to explain financial circumstances not represented in the forms you filled out. The Language of Financial Aid C. Anthony Broh, Broh Consulting Services [email protected] Alison Rabil, Asst. Vice Provost, Duke University [email protected]

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