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).

Education Conservancy, Information matters: Addressing the information needs of prospective college students (Portland, OR: The Education Conservancy, 2008), www.educationconservancy.org/InformationMattersResearchReportRV.pdf (accessed 9 September 2012).

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/

Kantrowitz, M., Who graduates college with six-figure student loan debt? (Washington, DC: FinAid.org, 2012), http://www.finaid.org/educators/20120801sixfiguredebt.pdf (accessed 10 September 2012).

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).

The Project on Student Debt, High hopes, big debts (Washington, DC: The Institute for College Access and Success, 2010), http://ticas.org/files/pub/High_Hopes_Big_Debts_2008.pdf (accessed 10 September 2012).

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).

U.S. Department of Education, College completion toolkit (Washington, DC: U.S. Department of Education, 2011), http://www.whitehouse.gov/sites/default/files/college_completion_tool_kit.pdf (accessed 9 September 2012).

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).