By Troy Miller, Senior Researcher and Policy Analyst, Florida College Access Network
Over 5,000 financial aid administrators across the country came to Orlando last week to attend the U.S. Department of Education’s annual Federal Student Aid Conference to get the latest on federal student aid policies, programs and procedures. Those in attendance represented thousands of colleges and universities across the nation, most of whom are responsible in some way for disbursing federal funds among their eligible students. Being as how I am a researcher and not a financial aid administrator, I got to put my “observer” hat on and experience the conference from a more objective seat.
There were a variety of sessions to choose from, but I decided to focus on those that were dedicated to student choice and information. The federal government now provides more than $150 billion dollars in grants, loans and work-study funds to students each year, but low college completion and rising student debt has triggered a demand for better data and information for college decision makers – a charge the Obama administration and the Office of Federal Student Aid has appeared to have taken seriously. To that end, a handful of new student-friendly resources have either been announced or made available to the public to help students and their families make decisions.1
Here are some of my takeaways from the conference related to making the financial aid process more “student-friendly”:
New Office of Federal Student Aid Website (www.studentaid.gov)
This past summer, the Office of Federal Student aid made public a new, streamlined and simplified website designed to help students and borrowers along every step of the financial aid process. Previously, the information presented to students was disjointed and spread across several different websites.2 The new website organizes content by commonly asked questions to help users find what they need. Two areas that caught my attention were the resource page and social media tools. The social media tools were especially significant, because institutions have historically been hesitant to engage their students and the public in their work.3 The FSA Office is now represented on Facebook, YouTube, Twitter, Storify and Visual.ly, which will hopefully encourage financial aid departments to assert their presence in engaging their students where they are, which is increasingly on the web and on smartphones and tablets. The presenters reported that traffic to the new FSA website had increased from previous years to an average of 70,000 visits per day. Here is an example of a student-friendly infographic on the financial aid process found on the FSA Office’s new visual.ly website.
Something else I got to cross of my list at the conference was my very first “Twitter Town Hall.” We video conferenced with the FSA team back in Washington, D.C., and got an inside look at how they use their monthly “#AskFAFSA Office Hours” to engage with students and parents. The monthly sessions are a team effort and they often have special guests to assist with responses, such as U.S. Secretary of Education Arne Duncan and Under Secretary Martha Kanter. The @FAFSA Twitter site was only formally introduced over the summer, but I was thoroughly impressed by the overall commitment the FSA Office has made to using social media platforms to reach the public. I predict in the coming years we will see more and more campus financial aid offices begin to experiment with Twitter and other sites with the success the Office of Federal Student Aid has experienced.
Improving Higher Education Transparency and Accountability
The Obama Administration has been responsible for the development of consumer choice tools to help navigate and improve financial decisions related to the college going process. Four resources that have been put forth to this effort are the College Scorecard, College Navigator, Net Price Calculator and Financial Aid Shopping Sheet, each of which are designed to help prospective students along different states of the college choice process. The College Scorecard has been developed to help students identify which postsecondary institution to apply to; College Navigator allows students to search and compare institutional characteristics like admissions requirements, programs and degrees offered, graduation rates and college costs;4 the Net Price Calculator is designed to allow students to estimate their net price of attendance at an institution based on what students similar to them paid in a previous year; and the Financial Aid Shopping Sheet combines student and institution information to help students discern what can be very complicated financial aid offers. There are strengths and weaknesses associated with each tool, which was openly acknowledged by the federal representatives at the conference. The suite of resources are either still in development or in a “1.0” release, meaning we should expect to see changes over time to reflect improvements that institutions, the public and analysts bring forward. Some financial aid officers in attendance voiced their concerns about the potential of misinforming their students, or misrepresenting their institutions. Much of the data provided on these tools represent the traditional first-time-in-college, degree earning students. The concerns about placing institutional data on a template or one-pager to students are valid; campus officials might not have the ability to communicate important caveats or limitations about the information provided on these new resources to students who will be left to make their own interpretations based on how the information is presented. Take for example the Financial Aid Shopping Sheet, with the exception of about a half-inch margin at the bottom of the page, all other information is provided on a sleek, but standardized single sheet.5 With the design of such resources being relatively new, there are sure to be some growing pains at colleges and universities while they get used to informing their students in a new way. Some changes in the near future to IPEDS reporting will also benefit these resources, as plans to include more student cohorts (part-time and non-first-time students) will only improve their reliability. I’m a fan of seeing these tools become more prevalent and useful to students as long as the financial aid community remains to be included in the design and implementation process.
The Feds Are Working on the Student Debt Problem
Student debt levels have reached unprecedented amounts and the conference dedicated a handful of sessions to helping students at different points of contact in the borrowing process. A session on financial literacy was designed to help institutions think about students who are most likely to default on their student loans and implement prevention and education programs at their schools.6 One of the most informative and content-heavy presentations was about income-driven repayment and public service loan forgiveness programs. A student with $50,000 in debt could pay as little as $69,000 or as much as $104,000 over the lifetime of the loan depending on the method of repayment chosen.7 Another session addressed new disclosure requirements for “career colleges” and for-profit institutions to post their completion rates, median loan debt, occupational information and program costs publicly. There were other sessions on loan servicing and processing I was not able to attend, but my overall impression of what I did see and hear was that the federal government sees climbing student debt levels as harmful for students, taxpayers and the economy by playing the role of student debt “watchdog.” Public comments from some this past year have asserted that $20-30,000 in student debt is reasonable, but the fact that students from low-income backgrounds (63%) are more than twice as likely to graduate with student loans than their peers (30%) is reason for the federal government to take a progressive role. It was refreshing to see and hear the federal government take on this issue and begin the process of holding institutions more accountable.
When federal student aid was first introduced in 1965, postsecondary enrollment was around 8 million nationwide and most people had never seen a phone that didn’t have a cord attached to it. A lot has changed since then. Last year, over 21 million students filled out the FAFSA (up 49% from two years earlier) and the phone I own today is only sparingly used to make actual phone calls. Federal student aid is now an indispensible component of American higher education and what makes it fascinating is the more it works (expands access) the more problems it presents. Students now have more than 6,000 colleges and career schools to choose from, which makes designing a system which monitors, regulates and delivers financial aid an inconceivable task. The conference was a constant reminder of this, as there were some uncomfortable moments during the question and answer sessions in which financial aid administrators went vocal about their frustrations about changes in policies. These troubles, however, are a necessary part of the overall process as changes to the financial aid system have been broadly called for. Even though there wasn’t a single student in attendance among the thousands that were at the conference in Orlando, I was pleased to see the needs of students receiving the level of consideration they did.
~Follow Troy Miller on Twitter @TroyMillerFCAN
1 Besides helping students compare institutions and make better decisions, another motivation behind increasing the visibility of financial aid and completion data is to increase the level of accountability of postsecondary institutions. For example, data on gainful employment released this past year has already impacted enrollment in the for-profit sector.
2 The presenters reported that redesigning the financial aid office’s online holdings will save U.S. taxpayers $1.5 million over two years.
3 There was an interesting dialogue among financial aid administrators taking place throughout the conference related to social media. The conference actually dedicated a session based solely on social media (found here). There was a genuine concern among financial aid professionals that students would use social media platforms such as Twitter and Facebook to simply complain about the service they received from their campus’ financial aid office. I thought the U.S. Department of Education’s social media “guru” Nicole Callahan did a fantastic job of explaining how institutions can use social media and search tools to “listen” to what students are saying about their campus’ financial aid services and better respond to their students’ needs.
4 College Navigator is the most popular U.S. Department of Education website with approximately 1.5 million page views each month. With over 20 million students applying for federal student aid this past year, I don’t know if that number sounds like a lot or a little!
5 Colleges have the option of adopting the Financial Aid Shopping Sheet this coming aid year, 300-400 higher education institutions have agreed to provide the sheet to their students. There are some requirements related to adoption of the sheet for institutions that have students who are eligible to receive Federal military and veterans educational benefits. The National Association of Student Financial Aid Administrators has a FAQ’s about the final version of the Shopping Sheet here.
6 I’ve got to give a quick plug for Dr. Michael Gutter from the University of Florida for his part of the presentation on student financial literacy. They seem to have accomplished a lot at UF in a short amount of time and limited resources.
7My advice for borrowers in, or approaching repayment is to speak directly with the Federal Student Aid Information Center (1-800-4-FED-AID) to go over your options. Take good notes and be patient, for student loan “beginners” this process can be overwhelming, frustrating, incredibly confusing, but completely worthwhile. Making the right selection could potentially save you thousands or tens of thousands of dollars. I am a Direct Loan borrower myself, and I have no problem admitting that I have been turned around in circles during my own attempts to learn about my options.
A complete listing of the 2012 FSA Conference Presentations can be found here.