How much will that college cost you? Good luck figuring it out

“Financial aid offer letters are supposed to tell families how much they will have to pay for college, which can be the deciding factor in where — or even whether — students go to college. But too often, the letters leave out important information and use terms that make it confusing to figure out the final cost. Some student advocates say the letters are downright deceptive. Others believe the lack of consistent language causes confusion; each college has its own format with its own vocabulary. This can make it difficult to answer the critical question: How much will this cost me? For over a decade, college access groups have been lobbying for a bill in Congress that would require all colleges to use the same, clearly labeled, standard form — kind of like nutrition labels on food — so families could accurately compare offers. But college associations and others have worked to block it. Below are several actual offer letters received last year, with names redacted to protect the privacy of the students. Some financial aid offer letters don’t include the most important information — how much a student will have to pay. This letter shows grants and loans … … but what’s the cost to the student? Nowhere do these letters give any information about the college’s cost. Some letters list more than one cost. See if you can figure out how much this student will owe in total. This letter includes three different numbers for expenses. Let’s zoom in … Here we have the total estimated amount due at $48,816 … But in another part of the letter, that amount changes to $38,316 … In fact, the amount the student will owe is in this box, in a much smaller font and labeled estimated net price — it’s $43,864. Advocates say letters shouldn’t list grants and loans together, because applicants often don’t understand the difference. The loans will have to be repaid and will accrue interest. That’s different from grants, which actually reduce the cost of tuition. Even more confusing, not all loans are the same. Parent PLUS loans are included here, even though the family may not be eligible. Also, interest for these loans accrues while a student is in school, which is not mentioned. Nothing here indicates that repaying $19,072 in Parent PLUS loans would exceed $29,000 with a standard 10-year repayment plan — and that’s just for one year of college. This letter doesn’t break out what portion of the $33,175 in loans is a private versus a Parent PLUS loan, but combines them as a lump sum. And it doesn’t say anywhere that both loans would likely have a higher interest rate than a federal student loan. Many colleges list “work study” as if it’s guaranteed income, but that can depend on whether a student can find a job that pays what the college estimates. In this case, the offer letter says the student will earn $3,180, but if they don’t find a job, they still have to come up with that amount. This one lists federal work-study but doesn’t explain that the job isn’t guaranteed. When colleges use different terms and formats for how they present the final cost to students, it’s difficult to compare them. This one uses the term “remaining direct and indirect costs” for the final amount a family owes, but other colleges use those terms to mean different things. This one uses “estimated net price” for the final cost … … while this one calls it “estimated outstanding costs” … … and here we have “costs after gifts and loans.” Finally, this letter uses both “direct costs” and “net costs” — and even ends with a negative cost. With colleges using so many different formats and terms, it’s not surprising that families get confused. You can see why some people want colleges to use a standardized form. What do you think? TELL US WHAT YOU THINK The post How much will that college cost you? Good luck figuring it out appeared first on The Hechinger Report .

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