Blog: Bottom Line Above All Else
The National Association of Student Financial Aid Administrators (NASFAA) released ASA’s report Starting with Students: Findings from NASFAA’s Consumer Testing Study of the U.S. Department of Education’s College Financing Plan, along with a NASFAA report summarizing their member survey about the new U.S. Department of Education College Financing Plan (CFP). The purpose of this research is to determine whether the CFP meets the needs of students, families, and financial aid professionals in supporting the financial aid and college application process.
Our consumer research found that, not surprisingly, students and their parents want simplicity when making financial decisions about college: common terms, visual comparisons, sufficient explanations, and highlighting the bottom line. Students simply want to know: “How much do I owe the institution?”
Unfortunately, the CFP does not quite accomplish those goals. While focus group participants were able to correctly respond to comprehension questions about grants and scholarships, fewer responded correctly about loan amounts. They were also less likely to ascertain how much of the cost of college was covered by financial aid. Consumer ratings of the document were also fairly low, with less than half scoring the document highly.
Focus group respondents for the most part preferred the older Shopping Sheet over the newer CFP, while the NASFAA survey found the opposite was true among financial aid professionals. This may be due in part to different terminology being meaningful to the two different groups. Students and parents did not understand or find useful concepts such as Expected Financial Contribution, graduation rate, and median borrowing – concepts regularly used by professionals.
In addition, consistent with our previous consumer testing survey for NASFAA, students and parents do not consider loans or work-study to be “financial aid,” as professionals in the field do. Rather, consumers only count grants and scholarships – money that does not need to be paid back – as “aid.” Further, consumers are largely unfamiliar with the concept of work-study, how it differs from other campus jobs, and whether work-study earnings are paid directly to the student or to the institution.
The CFP is a starting point, but students still need direct, in-person contact with financial aid professionals. They would like to know more specifically the name of a real person they can contact, and how to contact them, for additional information. Likewise, this study is a starting point, and both ASA and NASFAA’s recommendations include the need for additional consumer testing to fine-tune a document of this importance in a family’s decisions and future finances. Loan debt in particular is something students and/or their parents would likely carry for years, even decades, and making an informed decision about something that critical requires sufficient, clear explanation and guidance.