Financial Transparency is Key for Families Applying to Colleges
Each year, FAFSA connects millions of students pursuing higher education with financial aid. Still, it’s far from a perfect system—just ask a student who has filled out FAFSA this year or a financial aid advisor who has fielded their questions.
Confusion related to FAFSA (and financial aid in general) presents huge problems. From a student and family perspective, FAFSA should be the first portal that advances their education opportunities… not a hurdle.
And from a university perspective, a lack of clarity when it comes to a school’s cost of attendance causes issues for admissions staff. A little confusion can go a long way in affecting enrollment outcomes—and even student retention.
So, how can enrollment managers and financial aid staff empower students who are interested in their schools? It all boils down to financial transparency. Here’s why.
Issue # 1: College Cost Drives Interest in a School
The goal of admissions staff is to connect with prospective students and their families. Students and families have questions; colleges have answers. Unsurprisingly, one of the biggest concerns is finances.
Before applying to a college or university, students and families want to understand what they’ll owe, which aid they’ll qualify for, and what their total cost of attendance will be. But it’s hard to finalize an estimate with so many moving pieces.
First, students and families are confused about how to submit FAFSA. SallieMae’s most recent report, ‘How America Pays for College’, found that only 25%of undergrad students know when FAFSA is due.
Second, in most cases, students don’t know which forms of aid they qualify for until they receive an offer letter. Many are misinformed about what types of non-federal scholarships are available to them. The same Sallie Mae report found that a staggering 45% of families feel that scholarships are only for exceptional students.
This means that confusion about what college actually costs can drive students and parents to make misinformed decisions when applying for schools.
Issue # 2: Financial Confusion Disempowers Prospective (and Especially Low-Income) Students
Clearly, college cost is one of the most important factors that inform where students apply. Sallie Mae’s report found that 81% of students said they eliminated colleges from consideration based on cost.
If that assumed (and often incorrect)tuition estimate is too high, students will cross a school’s name off their list—even if it was one of their top choices… and even if they would have had access to federal, state, and institutional scholarships and grants.
Once again, a lack of financial transparency is impacting where students apply for college across the US. But it runs much deeper than incorrect costs of attendance.
Even if they can find an accurate cost of attendance estimate, many students and families aren’t sure how to leverage the financial aid opportunities available to them. Most troubling of all, the less money a family has, the less research they’re likely to do into these opportunities.
Only 48% of families with a household income of less than $50,000 built out a plan to pay for college in 2022, compared to 79% of families with a median household income of $150,000 or more.
The Silver Lining: There’s a Tool for That
Students are more likely to apply to universities they think they can afford. One way for them to know whether a school is a realistic option is to have access to a full cost of attendance breakdown—financial aid included.
Here’s where net price calculators come in. Students input their financial information into the NPC, then the program cross-references this data with a school’s tuition and other costs. Unsurprisingly, NPCs are one of the best ways for higher education institutions to empower prospective students.
In fact, they’re so important that the Department of Education mandated all universities provide them on their websites back in 2011. But even though the standard government-issued NPC is a great idea, it doesn’t quite get the job done.
It’s Meadow’s mission to work with universities to create fully personalized NPCs that hit the mark every single time. By working closely with enrollment staff to include the latest tuition, aid, and other financial information, an NPC can be tailored to a school’s financial rulesets down to the penny.
If you’re interested in seeing how Meadow’s NPC can make a difference, try out our demo today.
Ready to get started?
Get in touch with our team today.