Post on 27-Mar-2015
transcript
How to Help Students and FamiliesChoose Their Own Adventure Successfully
If we help each other, I think we can find our way back to your time—my new time.
Rachel Fishman, New America FoundationKevin Fudge, American Student Assistance
PRESENTED BY:
Follow the conversation at #NCANAdventure
Who is the “Traditional” College Student?
Out of the 19 million students enrolled in undergraduate or graduate institutions, only 7 million fit the traditional profile.
43% of undergraduates attend community colleges, 70% of undergraduates attend public institutions
37% of students are 25 years or older. 61% of Pell Grant recipients are independent.
Our higher education student population is much more diverse than most of us perceive. “Non-traditional” students are now the majority.
Sources: Complete College America, 2011; Fishman, 2012; Knapp et al., 2012a; Rosen, 2011
What Drives College Choice?
Gut feeling
Price
Location
Friends
Family
Teachers
Online Tools
College Admissions Officers
Guidance Counselors
The RankingsMentors
There’s not a lot of research about how students choose colleges, but because the choice is often emotional, it can quickly become irrational.
Source: Education Conservancy, 2008
CYOA Case #1: Jane Student
Sources: Bureau of Labor Statistics, 2012; Choy, 2012; Nord et al., 2011; Wyer, 2007
Average Student Jane Student
68% of 2011 grads enrolled in postsecondary education
99% of students from her high school enrolled directly in postsecondary education
93% of students whose parents have a college degree enroll in college
Both of Jane’s parents have advanced degrees
Average HS un-weighted GPA 3.0
Jane’s un-weighted GPA is 3.8
Average family income of college freshman: $74K
Jane’s family income: $150K
Do you think Jane attended college? If so, what kind (public/private; 2-year/4-year)? • Jane decides to enroll directly as an out-of-state student at a Midwest
flagship• Bases decision on academics, beauty of campus, and study abroad
programs and pays less attention to costs
What Are Results of Her Choice?Average Jane
Average federal undergraduate debt $22K at public IHEs
Graduates with $28K in federal loan debt
38% of borrowers who graduated in 2005 were delinquent or in default by 2009
2-year cohort default rate of Jane’s institution is 1%
Median salary of bachelor’s degree recipients ages 25-34: $45K
Jane moves to Chicago and secures an entry-level job at $35K
Do you think Jane successfully repays her loans?She does, but is unable to save money or invest in her retirement.
ANDBecause of stagnant wages she decides to go to get a master’s degree and attends
an Ivy League institution. Her cumulative debt load grows to $63,000.
Source: Cunningham & Kienzel, 2011; NCES, 2012; School data from College Navigator
How does Jane’s adventure end?
On the POSITIVE side, she’s happily employed, and making a decent wage.
On the NEGATIVE side, she’s enrolled in Income Based Repayment because she can’t afford her standard repayments.
BONUS: She will qualify for Public Service Loan Forgiveness (PSLF) in ten years. She is planning to only work for a nonprofit or the government
OVERALL, she’s faring well, but she also came from an advantaged background. She got a lot of help with her decision-making process!
Jane = MeAnd if you haven’t already guessed:
Problems in the PipelineOf 100 students that start 9th grade…75 graduate from high school…51 enter college…38% need remediation…And only 29 graduate from college.
Source: U.S. Department of Education, 2011
Where do students go off course?
The Remediation Trap:
Source: Complete College America, 2012
The First Year is a Big Deal
Source: CIRP, 2012
What are some of the negative impacts of uninformed decision-making?
Ending up degreeless and in debt:There are some worrying trends happening and it could be disastrous for the most vulnerable students we serve.
Source: Nguyen, 2012
What do we have control over? Information!
Students tend to have favorable outcomes if they attend the most selective institution for which they’re academically (and arguably financially) qualified
Students should apply to an appropriate balance of public/private, safety/reach schools so they have options
Low-income students grossly overestimate the cost of college (net price), causing them to foreclose on options suited to them
Families often don’t understand how to fill the gap between financial aid and cost of attendance and the repercussions
Information is not a panacea, but it can help students make better decisions and match them with the college or university that will best meet their needs both academically and financially.
Sources: Smith et al., 2012; TICAS, 2008
CYOA Case #2 – Louis Minah Family size = 4
2011 family income = $12,887
Accepted to first choice school: Private, Catholic liberal arts college
Cost of Attendance $39,170Financial Aid Award $34,150
Gap $5,500
College Stats88% Accepted55% Graduate2% Cohort Default Rate
If you think Louis should go to his first choice school, say “Yes.”
If you think Louis should look elsewhere, say “No.”
Best Ways to Bridge the Gap?
New information?
Deadlines passed?
Spending money?
Feasibility?
Additional Stafford?
Community College?
Appeal letter
Scholarships
Summer job
Payment Plan
PLUS Loan
Lower cost school
There are methods to bridge the gap between a financial aid award and the remaining cost of attendance. Taking on a cautious amount of student loans can have a great payoff, but if the loan burden is large, the student should seriously consider other options.
Look beyond the gap
Type Amount
Stafford 5,500
Perkins 5,500
PLUS reject* 4,000
Total 15,000
Type Amount
Stafford 7,500
Perkins 5,500
PLUS reject* 5,000
Total 18,000
First Year
Third Year
Type Amount
Stafford 6,500
Perkins 5,500
PLUS reject* 4,000
Total 16,000
Type Amount
Stafford 7,500
Perkins 5,500
PLUS reject* 5,000
Total 18,000
Second Year
Fourth Year
*Parent(s) denied PLUS = additional unsubsidized Stafford Loan
Source: Kantowitz, n.d.
It is important to note that almost half of Louis’ financial aid award is in the form of loans
Regardless of how he manages to fill the gap, his federal loan debt may exceed $60,000 by the time he graduates
What Are Results of His Choice?Average Louis
Average federal undergraduate debt $28K at nonprofit IHEs
Graduates with $60K in federal loan debt
38% of borrowers who graduated in 2005 were delinquent or in default by 2009
2-year cohort default rate of Louis’s institution is 1%
Median salary of bachelor’s degree recipients ages 25-34: $45K
Currently unemployed
Do you think Louis will successfully repays his loans?Over a 10-year standard repayment period:
He will pay $690/month$22,858 in interest
Total = $82,858 Source: Baum & Ma, 2011; School data from College Navigator
How Louis Avoided the Gap
Applied to his local community college
Awarded full Pell Grant which covered all of his tuition and fees
Paid nothing out-of-pocket by living with his family
Received $1,500 refund check in October, helping to defray some of his living expenses
Pros and Cons of Community College
Overenrolled and under-resourced
Remediation Lack of academic
advising Non-residential,
transient Not all credits are
created equal in transfer
Less expensive
Transfer incentives and agreements
Close to home
Flexible class schedules allow for job
How might Louis’ adventure play out?Average Louis
Approximately 42% of transfers at community colleges, transfer to public four-year colleges
Louis transfers to a local, public 4-year after his 2nd year of community college with an associate’s degree
When students transfer, they inevitably lose credits along the way. In LA, for example, on average 21-24 credits were lost in transfer
Louis loses approximately 15 credits, causing him to have to take an extra semester
Average tuition and fees at public, 4-year = $8,200Average Pell = $4,000
Louis must take on $15,000 of debt
Do you think Louis successfully repays his loans?Even though it takes Louis an extra semester to finish his degree, he finds a good entry-
level job and can handle his $170/month loan paymentSource: Baum & Ma, 2011; FEBP, 2012
CYOA Case #3 – Farah Hill Family size = 5
2011 family income = $30,000
Accepted to public, four-year non-flagship
Cost of Attendance $18,493
Financial Aid Award $11,050
Gap $7,443
If you think she should accept the award, say “Yes.”
If you think she should look some place else, say “No.”
College Stats71% Accepted48% Graduate4.4% Cohort Default Rate
In theory, public universities are the safer financial route
Average price before financial aid for a 4-year private college $33,969
Average Net Price: $19,770
Average in-state price before financial aid for a 4-year public college $17,563
Average Net Price: $10,971
Source: Knapp et al., 2012b
Though sometimes, it is almost as expensive as private college
Type Amount
Stafford 5,500
Perkins 3,500
Total 9,000
Type Amount
Stafford 7,500
Perkins 3,500
Total 11,000
First Year
Third Year
Type Amount
Stafford 6,500
Perkins 3,500
Total 10,000
Type Amount
Stafford 7,500
Perkins 3,500
Total 11,000
Second Year
Fourth Year
Source: Kantrowitz, n.d.
Even though she attends a public university that is significantly less cost than a private college, her federal loan debt may exceed $40,000 by the time she graduates
What Are Results of Her Choice?Average Farah
Average federal undergraduate debt $22K at public IHEs
Graduates with $40K in federal loan debt
45% of borrowers who graduated in 2005 were delinquent or in default by 2009
2-year cohort default rate at Farah’s institution is 4.4%
Median salary of bachelor’s degree recipients ages 25-34: $45K
Currently employed
Do you think Farah will successfully repay her loans?
Over a 10 year standard repayment period, she will pay $460/month$15,238 in interest
Total = $55,238
Source: Baum & Ma, 2011; School data from College Navigator
Farah decides to try something different
Alternatives Benefits
Americorpswww.americorps.gov
Equivalent of full Pell grant for every year of service
YearUpwww.yearup.org
Corporate internships; college credit; hands-on skill development
Intentional gap year Reassess education goals & funding, while potentially taking CC classes on side
Military service New GI Bill
How might Farah’s adventure play out?
Source: CNCS, 2006
Use of this grant would have reduced her debt by approximately $5K-20K depending on how many years she serves
But, as you can see, the usage rate of the grant varies
Both Louis’ and Farah’s cases reflect current trends
25% of borrowers in 2008 graduated from 4-year colleges with at least $30,526 in student loan debt
10% of borrowers graduated with at least $44,668 in student loan debt
1.5% of borrowers graduated with at least $100,000 in student loan debt
What will the percentage be in 2018?
What can you do to help?
Source: Project on Student Debt, 2010; Kantrowitz, n.d.; Kantrowitz, 2012
You are the “Keeper of the Keys”
The information is out there to help students make informed decisions, but they need someone to help them find the keys that will unlock the door.
REMEMBER: “Dream U” may not be the best academic, social, and/or financial choice for a student.
We need to help students make rational decisions based on independent information sources
Image Source: Warner Brothers
What Drives College Choice?
Inside Jobs
Net PriceCalculators
College Navigator
CollegeScorecard
ShoppingSheet
Finaid.org
FACT
Bureau of Labor Statistics
BigFuture
NCFCSALT
We need to curate resources that students can freely use to get relatively emotion-free data on colleges and jobs.
Federal Resources College Navigator (www.collagenavigator.gov)
A search engine of colleges College Affordability and Transparency Center (http://collegecost.ed.gov)
A list by sector of most expensive/least expensive colleges Federal Student Aid website (www.studentaid.gov)
A one-stop shop for federal aid resources Financial Awareness Counseling Tool (FACT) (
https://studentloans.gov/myDirectLoan/financialAwarenessCounselingLanding.action)
Counseling tool for students who have or will have federal loans College Scorecard (needs legislation)
An info-sheet with important statistics about each college Financial Aid Shopping Sheet (voluntary by school) (
http://collegecost.ed.gov/shopping_sheet.pdf)A standard coversheet for financial aid packages that disaggregates loans from grants and allows students to cross compare packages
Employment Projections by BLS (www.bls.gov/emp) Employment projections and median salary information
Other Free Resources National College Finance Center (www.collegefinancecenter.org)
An independent resource that helps students learn how to pay for college and repay loans. Great state-by-state aid guide.
College Board’s BigFuture (www.bigfuture.collegeboard.org) College Board’s college search engine and comparison tool, much more user-friendly than College Navigator.
Finaid.orgIndependent information about how to finance college. Like a trusted wikipedia for financial aid.
SALT (www.saltmoney.org) A website that helps students learn more about their loans and budgets in an interactive way.
Fastweb.comA scholarship search engine from the makers of finaid.org
Inside Jobs (www.insidejobs.com) A resource to discover a variety of careers and the education to go along with it
How Will These Adventures End?
Adventures are never choose path A or B, though they may seem that way, especially to students.
Our goal should be not only to get students into college, but also across the finish line and to give them a toolkit of resources that they will become familiar with before they have questions.
Stayed tuned to www.higheredwatch.org for reviews of free resources!
About Us:Rachel Fishman is a policy analyst for the Education Policy Program at the New America Foundation. She provides research and analysis on policies related to higher education including college affordability, financial aid, and access and success of nontraditional students. She also contributes frequently to the blog Higher Ed Watch. Fishman graduated from Harvard University with a master’s degree in higher education. While at Harvard, she worked as an education advisor for a TRiO Educational Opportunity Center where she provided guidance to students and families on how to make planning and paying for college possible.
She can be reached at fishmanr@newamerica.netFollow her @higheredrachel
Kevin Fudge is an education/financial aid advisor at American Student Assistance. He counsels students, parents, and nonprofit professionals on postsecondary education financing and career planning. Since 2005, Kevin has offered families assistance with planning and paying for college at branches of the Boston Public Library and at Massachusetts Educational Opportunity Centers. He also provides consultation to a variety of nonprofit and state organizations which provide their clients with tools for college success and economic independence. Prior to his current position, he served as the Assistant Director of Admissions and College Access Coordinator at College of the Holy Cross for three years.
He can be reached at kfudge@asa.org
ReferencesBaum, S., & Payea, K., Trends in student aid, 2011 (Washington, DC: The College
Board, 2011), http://trends.collegeboard.org/downloads/Student_Aid_2011.pdf (accessed 9 September 2012).
Baum, S., & Ma, J., Trends in college pricing, 2011 (Washington, DC: The College Board, 2011), http://trends.collegeboard.org/downloads/College_Pricing_2011.pdf (accessed 9 September 2012).
Bureau of Labor Statistics (2012, April 19). College enrollment and work activity of 2011 high school graduates. Retrieved from http://www.bls.gov/news.release/hsgec.nr0.htm/
Choy, S. P., Students whose parents did not go to college: Postsecondary access, persistence, and attainment (Washington, DC: National Center of Education Statistics, 2001), http://nces.ed.gov/pubs2001/2001072_Essay.pdf (accessed 9 September 2012).
Complete College America, Time is the Enemy (Washington, DC: Complete College America, 2011), http://www.completecollege.org/docs/Time_Is_the_Enemy.pdf (accessed 9 September 2012).
Complete College America, Remediation: Higher education’s bridge to nowhere (Washington, DC, Complete College America, 2012), http://completecollege.org/docs/CCA-Remediation-final.pdf (accessed 9 September 2012).
References (cont.)Cooperative Institutional Research Program. (2012). [Infographic from CIRP Freshman
Survey and Your First College Year Survey]. The First year is a big deal. Retrieved from http://heri.ucla.edu/PDFs/Infographics/YFCY_infographic.pdf
Corporation for National and Community Service, Americorps: State commission performance report (Washington, DC: Office of Research and Policy Development, AmeriCorps State Commission, 2006), http://www.nationalservice.gov/pdf/PERFREP/perfrep_acstate_full.pdf (accessed 10 September 2012).
Cunningham, A. F., & Kienzl, G. S., Delinquency: The Untold story of student loan borrowing (Washington, DC: Institute for Higher Education Policy, 2011), http://www.ihep.org/assets/files/publications/a-f/Delinquency-The_Untold_Story_Final_March_2011.pdf (accessed 9 September, 2012).
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Federal Education Budget Project (2012, March 26). Background & analysis: Other federal higher education grant programs. Retrieved from http://febp.newamerica.net/background-analysis/federal-higher-education-grant-programs
References (cont.)Fishman, R. (2012, January 19). Three truths about students in higher education.
Retrieved from www.quickanded.com/2012/01/three-truths-about-students-in-higher-education.html
The Institute for College Access & Success, Paving the way: How financial aid awareness affects college access and success (Berkeley, CA: The Institute for College Access and Success, 2008) http://projectonstudentdebt.org/fckfiles/Paving_the_Way.pdf (accessed 10 September 2012).
Kantrowitz, M. (n.d.). Student Loans. In FinAid.org. Retrieved September 10, 2012, from http://www.finaid.org/loans/
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Knapp, L. G., Kelly-Reid, J.E., & Ginder, S. A., Enrollment in postsecondary institutions, fall 2010; financial statistics, fiscal year 2010; and graduation rates, selected cohorts, 2002-07: First Look (Washington, DC: National Center for Education Statistics, 2012a), http://www.nces.ed.gov/pubs2012/2012280.pdf (accessed 9 September 2012).
References (cont.)Knapp, L.G., Kelly-Reid, J.E., & Ginder, S.A., Employees in postsecondary institutions,
Fall 2011 and student financial aid, academic year 2010-11 (Washington, DC: National Center for Education Statistics, 2012b), http://nces.ed.gov/pubs2012/2012156.pdf (accessed 10 September 2012).
National Center for Education Statistics (2012). Fast facts: Income of young adults. Retrieved from http://nces.ed.gov/fastfacts/display.asp?id=77
Nguyen, M. Degreeless in debt: What happens to borrowers who drop out (Washington, DC: Education Sector, 2012), http://www.educationsector.org/sites/default/files/publications/DegrelessDebt_CYCT_Release.pdf (accessed 9 September 2012).
Nord, C., Roey, S., Perkins, R., Lyons, M., Lemanski, N., Brown, J., & Schuknecht, J. The Nation’s report card: America’s high school graduates (Washington, DC: National Center for Education Statistics, 2011), http://nces.ed.gov/nationsreportcard/pdf/studies/2011462.pdf (accessed 9 September 2012).
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Rosen, A. (2011). Change.edu: Rebooting for the new talent economy. New York, NY: Kaplan Publishing.
References (cont.)Smith, J., Pender, M., Howell, J., & Hurwitz, M., Getting into college: Postsecondary
academic undermatch (Washington, DC: College Board, 2012), http://advocacy.collegeboard.org/sites/default/files/12b_6264_CollegeKeys_Brief_revise_WEB_120719.pdf (accessed 10 September 2012).
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Wyer, K. Today’s college freshmen have family income 60% above national average, UCLA survey reveals (Los Angeles, CA: UCLA Newsroom, 2007), http://newsroom.ucla.edu/portal/ucla/Today-s-College-Freshmen-Have-Family-7831.aspx (accessed 9 September 2012).