Student Borrowers Lack Financial Aid Info – OnlineBusinessDegree.org
A significant amount of student borrowers lack adequate information about financial aid and student loan options, reveals a new report by NERA Economic Consulting and Young Invincible, a youth advocacy organization.
The report, titled Lost Without A Map: A Survey About Students’ Experiences Navigating the Financial Aid Process, includes survey responses from more than 13,000 students who received financial aid and who are current students or recent college graduates. The average debt amount of respondents is more than $75,000.
According to the report, only 60% of grant and federal loan recipients said they received accurate information about grants and loans, compared to only 40% of private loan borrowers. Students themselves were the ones most likely to apply for financial aid: 83% of federal loan borrowers, 80% of grant recipients, and 68% of private loan borrowers reported doing so. From these numbers, report authors deduced that strategies to increase understanding of financial aid must center on educating the students themselves.
The majority of students with grants or federal loans reported receiving information from their college’s financial aid office and/or a government website, and those were the preferred resources. The report also finds that across all three aid types—grants, federal loans, and private loans—between 13% and 20% more respondents preferred to receive information from their high school counselors than actually received information from that source, suggesting those aid recipients wanted early guidance and may have benefited from it.
Searchable grant/loan databases are the most preferred method to receive information across all financial aid types, with e-mail being the second most preferred method, and grant/loan-specific websites being the third most preferred method.
Additionally, more than 40% of respondents with federal loans reported they did not receive loan counseling – which may be attributed to colleges not adequately complying with the legal requirement to offer college counseling, lax standards that may allow schools to offer poor quality programs, or borrowers not remembering they even received counseling.
The report also reveals that students want loan counseling to provide better information, more personal contact, and simpler explanations. Additionally, many students find the federal financial aid forms confusing, and more than 90% of respondents are in favor of creating a standardized financial aid award letter with common definitions and clear terms.
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