July 6th, 2010
by Mark H. Sklarow, Executive Director, IECA
A study conducted earlier this year, and recently published by the College Board and Art & Science Group LLC, indicated that students and parents are making decisions about college applications and matriculation based on financial aid information that is incorrect, incomplete, and inaccurate. In the survey, 59% of students indicated that they eliminated colleges after looking at the “sticker price” with no consideration given to possible financial aid and the “net cost” of attending. No wonder, as a quarter of all students said their parents were requiring them to attend the most affordable school and another 40% had parents insist they apply to ‘more affordable’ colleges. Of course, most of these determinations were based on published list prices. Only a small portion of the population had used any financial aid calculator to determine what sort of financial aid they might qualify for. Meaning most families were flying blind. Those who were thinking about financial aid were further off base. When asked to guess what sort of financial aid they expected to qualify for, most families significantly over-stated the amount of merit aid they thought they would qualify for, even for students with very low standardized test scores. While the national average for merit aid is about 15% of college costs, families estimated it would be one-third.
Even when faced with higher tuition than they felt they could afford, the survey found that families were willing to explore the possibility of a college. This was seen as a sign that under certain circumstances families are willing to stretch their definition of “affordability.” The qualities that get families to examine such out-of-their-budget schools: strong academics in their major, a place where students can fit in, a stellar reputation, and a solid record of placing graduates in good jobs or graduate programs.
It is clear that families need more and easier-to-comprehend information about college finances. With the cost of college rivaling only the cost of purchasing a home in a family’s financial history, clear and accurate financing information is an essential part of the college search process. Yet today, armed with faulty assumptions and bad information, and complicated by rules and regulations that confound rather than amplify, families are at a loss. Members of the Independent Educational Consultants Association (IECA), long seen as the most knowledgeable source of information about college selection, need to expand and enhance their services to provide students and parents with clear, accurate and understandable information on college affordability. We have asked our College Committee to develop materials for a new financial aid flyer for IECA members to provide to client families.
As an association we will post this basic information on our Web site to ensure it reaches everyone. We have also pledged to work with national organizations to assist in clarifying and simplifying the financial aid information available to families.
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College Tuition, Economy and Consultants, Financial Aid, IECA member consultants, college admissions, college applications, college consulting | 
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Tagged:admissions, Art & Science Group, college application trends, college applications, College Board, college committee, college consulting, economy, educational consulting, Financial Aid, financing information, IECA members, LLC, Mark Sklarow, merit aid
March 19th, 2010
by Mark Sklarow, Executive Director, Independent Educational Consultants Association
While all legislative eyes are focused on a vote on major Health Care legislation (addressed in a previous blog), there is speculation that the final reconciliation bill will have a major reform to the college loan industry attached. If this legislative path is followed—and all expectation is that it will be—this major change in how families and students will borrow funds may be passed by the House as early as Sunday and by the Senate soon after (requiring simple majorities in each House). The President has said he will sign the bill.
For more than 40 years, banks and other financial institutions have provided student loans. What most of the public is not aware of is that the federal government has assumed virtually all of the risk, allowing the tuition funds to be lent at a low rate of interest. This has also meant that these financial institutions have realized billions of dollars in profits with essentially no fear of loss. The proposed bill would put the government directly in charge of the loan process. Sallie-Mae and other financial institutions have been lobbying against the change on two fronts: that it will cost jobs and the system basically works—not needing any change. Recent scrutiny into kickbacks has raised some concerns in recent years.
The Obama administration has said that the change will essentially cut out the middleman, allowing the government to realize savings and surpluses of $61 billion over the next ten years. Thirty-six billion dollars of that would go directly into the Pell Grants, a program that is currently over-subscribed and under-funded. The change would bring the Pell Grants to solvency and raise the yearly maximum grant from $5,550 to $5,975 (a compromise figure that is less than proponents originally sought).
If the legislation passes, everyone needs to follow changes that could come about very quickly. The current Federal Family Education Loan Program—which uses private lenders—would end on July 1. After that dates all federal students loans would be issued by the federal government. There has been so much speculation that this legislation was coming that nearly half of loans this year on about half of college campuses were direct federal loans already, as schools began the shift away from private lenders.
It is worth also seeing where the rest of the savings would go, particularly in these very tough economic times. More than $2 billion each will be directed toward community colleges and historically black colleges and universities, with $10 billion going to reduce the federal budget deficit.
Changes are still possible, but with the impact of the passage (should it pass) likely to be felt so quickly, IECA will work to bring the latest information to educational consultants, counselors, and families.
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Tagged:college loans, educational consultants, Financial Aid
February 16th, 2010
by Emily Snyder, IECA Member (Virginia) and Chair, IECA College Committee
In “Inside the College Rankings” in Friday’s US News and World Report, Bob Morse (of the Morse Code), cites the recently released “UCLA Freshman Survey: Fall 2009″ as evidence that students are using a variety of factors—not just national rankings—when making a decision about where to go to college.
The survey asked 219,864 incoming freshman at 297 colleges to rate as many as 22 factors that they considered to be “very important” in influencing their decision to attend a particular college.
The survey results show that financial aid (#3) and cost of attendance (#4) are very important considerations—no surprise given the current economic climate. With other factors, such as campus visits (#5); size (#6); social climate (#7); and location (#9) receiving a higher rating than national rankings (#12—down from #11 last year), it is clear that the groundwork that IECA has laid for educating students and families on making a decision that is right for them has taken hold. Hopefully we won’t have to work as hard to dispel the myth that a university’s national ranking determines it worthiness.
In the data driven age of the 21st century, where statistical comparisons are used for making all kinds of decisions, national education rankings will continue to play a role in most families’ decision-making process. For what it’s worth, in my opinion, to assume otherwise would be shortsighted.
However, as the importance of national rankings shifts, so does our responsibility. Do we even need to continue to debate whether rankings are worthwhile? Can we use this survey as a conversation changer in how we counsel families?
When the conversation surfaces, why not say that rankings are out there, that each one represents one source’s results (and in some cases opinion), and that we would all be better served to focus on the factors that are the most important to each particular student’s situation; let’s be the ones to shift the conversation. The fact that US News is giving coverage to a survey that some could construe as “devaluing” the importance of the national rankings speaks for itself—the timing is right.
The results of the UCLA survey prove that students and families are heeding the advice we provide; something we should all be proud of. It also renews my faith in what we do for students—guide them as they utilize available resources to evaluate their options and make decisions that are right for them.
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Tagged:college consulting, College Rankings, economy, Finding the Right Fit, IECA members, US News and World Report
December 7th, 2009
by Mark Sklarow, Executive Director, IECA
A new national study by Education Trust reports the surprising figure that only 57% of college freshmen (in 1999, the class studied) nationwide has achieved their undergraduate degree within six years. That figure includes students who transferred and graduated elsewhere. Worse still were the numbers for low-income and underrepresented minorities whose six-year graduation rate was just 45%. If ever there was a number that begs for innovation on campus—and for better advising upfront—this is it.
The report also showed that community colleges may not be the answer. There, fewer than 24% of low-income and minority students completed their associates degree within four years.
Clearly we are failing these students. Whether it is not providing the tools they need academically, not enveloping them in the school community, or lack of support systems in place once they arrive, such figures speak clearly and alarmingly of a broken system.
In the field of educational consulting we know one thing: a student is more likely to succeed when there is a great match made between the students needs, interests, and abilities, and the institutions best suited to help them thrive. That’s what great counseling is all about and what the Independent Educational Consultants Association stands for.
Many have believed that the failure to graduate was directly related to the student’s ability to afford tuition. That is, a low-income or minority student has a more difficult time sustaining the cost of a college education over four, five or six years. However the study looked at those receiving Pell grants. Looking at two-year institutions, even those with grants completed their program at a rate of 32%—the same rate as other students.
Many have heard me say that we must end this focus on where “students get in,” which dominates the media and shift our focus to “where students thrive, succeed, and graduate.”
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Tagged:admissions, college consulting, community college, educational consulting, Pell Grants
July 22nd, 2009
by Emily Snyder, IECA (Virginia)
Today’s edition of Inside Higher Ed includes a partisan yet objective assessment of both the appreciation for and concerns with the Congressional bill to restructure student aid programs.
It may be somewhat of a long read for anyone not interested in the “how did this come about” politicking that goes on behind the passing of legislation, but it does cover the basics and explain the issues that are generating the most amount of concern.
Even for college consultants who don’t include financial aid counseling and advice as part of the services they offer, this article still provides a sense of the complexity of the issues and will help everyone better understand who will be most impacted and what all students in search of—and most importantly in need of—funding for college will be up against as more families than ever compete for an increasingly smaller pool of available federal and state money.
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Tagged:college consulting, Financial Aid
June 24th, 2009
Today’s announcement by the Obama administration to simplify the FAFSA application (Free Application for Federal Student Aid) is a most welcome admission that the form, with its 150+ questions, has become so complex and cumbersome that the very families the process should be helping has, instead, chased them away. Today’s announcement of minor changes for the coming year—eliminating as many as 20 duplicative questions—will help, but the real benefits will come in another year or two.
The goal is to feed financial information directly from a family’s tax return into the FAFSA form. This obvious move will improve accuracy and make the process far easier for families. In particular, this will greatly assist lower income families (and often those of first-generation college students) who have struggled with areas of the form dealing with net worth, investment portfolios, and the like.
The overall strategy is that this simplified process will bring increased numbers of students into the college search process by demonstrating that college is achievable and affordable. For consultants, this begins one more step in gaining greater expertise in understanding the broad range of financial aid possibilities, including need-based financial aid, merit aid, loans, work-study and 529 plans, among others. Anything that simplifies this process for families is a positive change for all.
Posted by Mark Sklarow, IECA Executive Director
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Tagged:college application trends, college applications, college consulting, FAFSA, Financial Aid
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