Six Experts Help To Demystify the Financial Aid Process

Posted on | April 13, 2010 | No Comments

The Wall Street Journal recently held a panel discussion titled “Paying for College:  What You Need To Know.  Here are the highlights from the transcript that I had prepared (Download Six Experts Demystify the Financial Aid Process):

• On why college has gotten so expensive:

• • Mark Kantrowitz of FinAid and FastWeb:  “Colleges have a different mix of expenses.  They’re much more heavily weighted towards facilities, energy costs, staffing costs, all of which tend to go up faster than the consumer price index.”
  • James Boyle of College Parents of America:  “…there is a relatively fixed supply of seats available at four-year colleges and universities in the United States and there is a tremendous demand for those seats.  More people want to go to college…And so this pressure for a relatively fixed number of seats creates an upward pressure on prices.”

• On the importance of income vs. assets when calculating expected family contribution:

• • Kantrowitz:  “…less than 4% of dependent students have any contribution from parent assets.  That’s because parents who have income under $50,000 have their assets excluded.  even when the parent assets are counted, it’s at a maximum rate of 5.64%.  Income weighs much more heavily in the formula.  The one caveat is that child assets are assessed much more heavily than parent assets.  Child assets are treated as 20%…”

• On role of financial aid offices:
  • Lynn Higinbotham (NYU):  We have about 45 financial aid staff members, and we also spend the majority of our time answering students’ and parents’ questions.  Financial aid process is inherently complex.  We try to simplify that for people.  And everyone’s financial aid package looks different so there’s not one answer that suffices for everyone.So, a lot of our job is about communicating.  It’s about making sure people are proactive.  It’s about making sure people follow up with that the types of aid have been offered.  We want to make sure that we help them get through the process.  And we also want to help them not only in the financial aid aspects, but we also want to help them through the billing piece of it too.  So, the thing is that it doesn’t stop at the financial aid office.  There’s a whole process that’s involved.  And so, there’s a lot of time that is spent with students who reach out to us.

    But as Melissa had mentioned, ideally, people can get the information themselves via various sources.  Our website has a lot of information on it.  And hopefully, our processes are set up so that people can navigate that system fairly easily themselves.  And there are a lot of changes that are going on right now so people do have a lot of questions.  And we encourage people to ask questions.  We always do because we know it’s a complex process.

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