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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 timemy new time.

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Presentation on theme: "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 timemy new time."— Presentation transcript:

1 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 timemy new time. Rachel Fishman, New America Foundation Kevin Fudge, American Student Assistance PRESENTED BY: Follow the conversation at #NCANAdventure

2 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

3 What Drives College Choice? Gut feeling PriceLocationFriendsFamilyTeachers Online Tools College Admissions Officers Guidance Counselors The Rankings Mentors Theres 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

4 CYOA Case #1: Jane Student Sources: Bureau of Labor Statistics, 2012; Choy, 2012; Nord et al., 2011; Wyer, 2007 Average StudentJane 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 Janes parents have advanced degrees Average HS un-weighted GPA 3.0 Janes un-weighted GPA is 3.8 Average family income of college freshman: $74K Janes 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

5 What Are Results of Her Choice? AverageJane 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 Janes institution is 1% Median salary of bachelors 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. AND Because of stagnant wages she decides to go to get a masters 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 Janes adventure end? On the POSITIVE side, shes happily employed, and making a decent wage. On the NEGATIVE side, shes enrolled in Income Based Repayment because she cant 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, shes 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 havent already guessed:

7 Problems in the Pipeline Of 100 students that start 9 th 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

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 What do we have control over? Information! Students tend to have favorable outcomes if they attend the most selective institution for which theyre 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 dont 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

12 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$39,170 Financial Aid Award$34,150 Gap$5,500 College Stats 88% Accepted 55% Graduate 2% 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.

13 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.

14 Look beyond the gap TypeAmount Stafford5,500 Perkins5,500 PLUS reject*4,000 Total15,000 TypeAmount Stafford7,500 Perkins5,500 PLUS reject*5,000 Total18,000 First Year Third Year TypeAmount Stafford6,500 Perkins5,500 PLUS reject*4,000 Total16,000 TypeAmount Stafford7,500 Perkins5,500 PLUS reject*5,000 Total18,000 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

15 What Are Results of His Choice? AverageLouis 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 Louiss institution is 1% Median salary of bachelors 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

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 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

18 How might Louis adventure play out? AverageLouis Approximately 42% of transfers at community colleges, transfer to public four-year colleges Louis transfers to a local, public 4-year after his 2 nd year of community college with an associates 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 = $8,200 Average 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 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 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 Stats 71% Accepted 48% Graduate 4.4% Cohort Default Rate

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 TypeAmount Stafford5,500 Perkins3,500 Total9,000 TypeAmount Stafford7,500 Perkins3,500 Total11,000 First Year Third Year TypeAmount Stafford6,500 Perkins3,500 Total10,000 TypeAmount Stafford7,500 Perkins3,500 Total11,000 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

22 What Are Results of Her Choice? AverageFarah 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 Farahs institution is 4.4% Median salary of bachelors 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

23 Farah decides to try something different AlternativesBenefits Americorps www.americorps.gov Equivalent of full Pell grant for every year of service YearUp www.yearup.org Corporate internships; college credit; hands-on skill development Intentional gap yearReassess education goals & funding, while potentially taking CC classes on side Military serviceNew GI Bill

24 How might Farahs 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

25 Both Louis and Farahs 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? Inside Jobs Net Price Calculators College Navigator College Scorecard Shopping Sheet 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.

28 Federal Resources College Navigator (www.collagenavigator.gov)www.collagenavigator.gov A search engine of colleges College Affordability and Transparency Center (http://collegecost.ed.gov)http://collegecost.ed.gov A list by sector of most expensive/least expensive colleges Federal Student Aid website (www.studentaid.gov)www.studentaid.gov A one-stop shop for federal aid resources Financial Awareness Counseling Tool (FACT) (https://studentloans.gov/myDirectLoan/financialAwarenessCounselingLandin g.action)https://studentloans.gov/myDirectLoan/financialAwarenessCounselingLandin g.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)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)www.bls.gov/emp Employment projections and median salary information

29 Other Free Resources National College Finance Center (www.collegefinancecenter.org)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 Boards BigFuture (www.bigfuture.collegeboard.org)www.bigfuture.collegeboard.org College Boards 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)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)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!www.higheredwatch.org

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 masters 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.netfishmanr@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.orgkfudge@asa.org

32 References 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).http://trends.collegeboard.org/downloads/Student_Aid_2011.pdf 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).http://trends.collegeboard.org/downloads/College_Pricing_2011.pdf 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/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).http://nces.ed.gov/pubs2001/2001072_Essay.pdf 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).http://www.completecollege.org/docs/Time_Is_the_Enemy.pdf Complete College America, Remediation: Higher educations bridge to nowhere (Washington, DC, Complete College America, 2012), http://completecollege.org/docs/CCA- Remediation-final.pdf (accessed 9 September 2012).http://completecollege.org/docs/CCA- Remediation-final.pdf

33 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 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). http://www.nationalservice.gov/pdf/PERFREP/perfrep_acstate_full.pdf 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). http://www.ihep.org/assets/files/publications/a-f/Delinquency- The_Untold_Story_Final_March_2011.pdf 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). www.educationconservancy.org/InformationMattersResearchReportRV.pdf 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 http://febp.newamerica.net/background-analysis/federal-higher-education-grant-programs

34 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.htmlwww.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).http://projectonstudentdebt.org/fckfiles/Paving_the_Way.pdf 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).http://www.finaid.org/educators/20120801sixfiguredebt.pdf 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). http://www.nces.ed.gov/pubs2012/2012280.pdf

35 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).http://nces.ed.gov/pubs2012/2012156.pdf National Center for Education Statistics (2012). Fast facts: Income of young adults. Retrieved from http://nces.ed.gov/fastfacts/display.asp?id=77http://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_Rele ase.pdf (accessed 9 September 2012). http://www.educationsector.org/sites/default/files/publications/DegrelessDebt_CYCT_Rele ase.pdf Nord, C., Roey, S., Perkins, R., Lyons, M., Lemanski, N., Brown, J., & Schuknecht, J. The Nations report card: Americas high school graduates (Washington, DC: National Center for Education Statistics, 2011), http://nces.ed.gov/nationsreportcard/pdf/studies/2011462.pdf (accessed 9 September 2012). http://nces.ed.gov/nationsreportcard/pdf/studies/2011462.pdf 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). http://ticas.org/files/pub/High_Hopes_Big_Debts_2008.pdf Rosen, A. (2011). Change.edu: Rebooting for the new talent economy. New York, NY: Kaplan Publishing.

36 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). http://advocacy.collegeboard.org/sites/default/files/12b_6264_CollegeKeys_Brief_revise_ WEB_120719.pdf 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). http://www.whitehouse.gov/sites/default/files/college_completion_tool_kit.pdf Wyer, K. Todays 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). http://newsroom.ucla.edu/portal/ucla/Today-s-College-Freshmen-Have-Family-7831.aspx


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