Many of today’s students are frustrated and even dissuaded by the hoops they have to jump through to secure financial aid, but accessible and transparent information can change that.
“There are so many financing potholes in the financial aid process. It’s a wonder anybody gets through it unscathed,” said Dr. Carlo Salerno, author of a new report, “Leveling Up for Student Financial Success: Student Sentiment Regarding Financial Decisions in Higher Education.” An education economist, Salerno is vice president of research at CampusLogic, a software company that provides solutions to colleges and universities to help manage the financial aid process and make it less burdensome.
The report says that from the day a student fills in their Free Application for Federal Student Aid (FAFSA) forms to the day they complete paying off a student loan, they encounter stresses.
“[We wanted to examine] where in the process stresses people out,” said Salerno.
Dr. Carlo Salerno
CampusLogic partnered with Gallup to examine why today’s students find the financial aid process so frustrating and how changes can be made to create a smoother experience.
The data for the report came from two surveys. A custom survey posed questions to U.S. adults with some college exposure but no degree (1,146 people, referred to as non-completers), and 19,925 alumni answered questions from the Gallup Alumni Survey. The goal of the report was to use data to examine the barriers to accessing financial aid and then to present solutions to optimize student financial success.
Among non-completers, 72.3% reported that the stress of the process of funding their education hurt their academic performance. The report noted that clarifying costs to students through effective communication and the presentation of a broad range of funding opportunities will help students be more successful.
“When you buy something and you don’t realize it’s going to cost more, and then you have to struggle to manage that debt, that creates angst for people, bad feelings and frustration,” said Salerno.
The financial aid process impacted students’ choice of institution to some degree for 57% of the overall respondents. When broken down by race, 20.9% of White respondents, 35.1% of Black respondents, 22.5% of Asian respondents and 34.4% of Hispanic respondents said the aid process affected their choice of college. The percent of alumni who reported that the financial aid process affected their decision grew from 27.9% to 53.9% between the 1970s and the 2010s. The report said customizing the financial aid experience makes the whole process of applying for financial aid more convenient for students.
Another problem with the application process is that current technology doesn’t help cut through the red tape. And federal agencies are aware of that.
“Streamlining the FAFSA is a federal priority,” said Salerno. “We see the Department of Education trying to change the technological infrastructure to make it easier. There has been progress, but … when you deal with federal forms and federal bureaucracy, there’s a process that has to be followed. … Those things contribute to a slowing down of a process we would all like to see sped up.”
The report noted that two out of five alumni considered leaving their college or university due to family stress or cost concerns. A reason 45.4% cited was that they didn’t understand the true cost of attendance. In response, the report suggests that students pay attention to on-campus resources such as food pantries.
“By being able to present data like this, we get more institutions to focus on this,” said Salerno. “As we can layer more numbers into the conversation, our hope is that schools and institutional leaders and even state and federal policymakers will look at data like this and use that to prioritize the conversations. We should identify the acute stress points and figure out interventions that can help students better finance and alleviate some of the stress and concern.”
He said the recurring theme through their research was that the more informed and the better-informed someone is, the more able they are to make good decisions. This requires transparency and providing thorough information. For instance, only 36.1% of alumni said they had had access to timely information about relevant scholarships at their institution and only 33.3% for relevant scholarships outside the institution.
“There are a lot of technology tools that can be brought to bear to help people better understand award letters and maybe that accelerates their decision making. There are tools to help make sure that verification doesn’t have to be an onerous process. If you want to remove frictions, I think technology is probably the way to go,” said Salerno.
More than 95% of non-completers expressed some level of concern for affordability, but three out of five said they plan to return and finish their programs. The report said that high-need advising and providing these individuals with a thorough understanding of the financial landscape of returning to school would go a long way in ensuring students stay on and/or return to finish their degree.
“The challenge we have is when somebody makes a bad decision based on bad data,” Salerno said. “You give them more and better information on what the true total cost is going to be.”
Salerno said people want to understand the information, so they can budget and plan accordingly. He suggested using technology to handle rote tasks, which will free up personnel to give students personalized support.
“There are so many points where you can trip and stumble,” Salerno said. “We have to stop treating the financing process as this singular point. When we get beyond that, we can start building better policy discussions.”