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How to Help Students and Families Choose Their Own Adventure Successfully

If we help each other, I think we can find our way back to your time—my new time. Follow the conversation at #NCANAdventure. How to Help Students and Families Choose Their Own Adventure Successfully. Rachel Fishman, New America Foundation Kevin Fudge, American Student Assistance.

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How to Help Students and Families Choose Their Own Adventure Successfully

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  1. If we help each other, I think we can find our way back to your time—my new time. Follow the conversation at #NCANAdventure How to Help Students and FamiliesChoose Their Own Adventure Successfully Rachel Fishman, New America Foundation Kevin Fudge, American Student Assistance PRESENTED BY:

  2. 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. Who is the “Traditional” College Student? 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

  3. What Drives College Choice? Location Guidance Counselors Friends Online Tools Family Price Gut feeling Teachers College Admissions Officers There’s not a lot of research about how students choose colleges, but because the choice is often emotional, it can quickly become irrational. The Rankings Mentors Source: Education Conservancy, 2008

  4. CYOA Case #1: Jane Student 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 Sources: Bureau of Labor Statistics, 2012; Choy, 2012; Nord et al., 2011; Wyer, 2007

  5. What Are Results of Her Choice? Do you think Jane successfully repays her loans? She does, but is unable to save money or invest in her retirement. AND Because 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

  6. 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! And if you haven’t already guessed: Jane = Me

  7. Of 100 students that start 9th grade… 75 graduate from high school… 51 enter college… And only 29 graduate from college. 38% need remediation… Problems in the Pipeline Source: U.S. Department of Education, 2011

  8. Where do students go off course? The Remediation Trap: Source: Complete College America, 2012

  9. The First Year is a Big Deal Source: CIRP, 2012

  10. 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

  11. 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. 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 Sources: Smith et al., 2012; TICAS, 2008

  12. CYOA Case #2 – Louis Minah • Family size = 4 • 2011 family income = $12,887 • Accepted to first choice school: Private, Catholic liberal arts college If you think Louis should go to his first choice school, say “Yes.” If you think Louis should look elsewhere, say “No.”

  13. Best Ways to Bridge the Gap? • Appeal letter • Scholarships • Summer job • Payment Plan • PLUS Loan • Lower cost school • New information? • Deadlines passed? • Spending money? • Feasibility? • Additional Stafford? • Community College? 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.

  14. Look beyond the gap First Year Second Year 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 Third Year Fourth Year *Parent(s) denied PLUS = additional unsubsidized Stafford Loan Source: Kantowitz, n.d.

  15. What Are Results of His Choice? 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

  16. 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

  17. Pros and Cons of Community College • Less expensive • Transfer incentives and agreements • Close to home • Flexible class schedules allow for job • Overenrolled and under-resourced • Remediation • Lack of academic advising • Non-residential, transient • Not all credits are created equal in transfer

  18. How might Louis’ adventure play out? 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 payment Source: Baum & Ma, 2011; FEBP, 2012

  19. CYOA Case #3 – Farah Hill • Family size = 5 • 2011 family income = $30,000 • Accepted to public, four-year non-flagship If you think she should accept the award, say “Yes.” If you think she should look some place else, say “No.”

  20. 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

  21. Though sometimes, it is almost as expensive as private college First Year Second Year 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 Third Year Fourth Year Source: Kantrowitz, n.d.

  22. What Are Results of Her Choice? 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

  23. Farah decides to try something different

  24. How might Farah’s adventure play out? • 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 Source: CNCS, 2006

  25. 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

  26. 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

  27. What Drives College Choice? College Scorecard College Navigator BigFuture FACT Shopping Sheet Net Price Calculators Inside Jobs Finaid.org Bureau of Labor Statistics We need to curate resources that students can freely use to get relatively emotion-free data on colleges and jobs. NCFC SALT

  28. 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

  29. 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.org • Independent 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.com • A 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

  30. 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!

  31. 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.net Follow 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

  32. Baum, 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

  33. 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.)

  34. 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.)

  35. 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.)

  36. 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). References (cont.)

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