As far as major life purchases go—home, car and college education—former financial aid administrator Amy Glynn can’t help but notice that only two out of three have revamped the experience to be highly personalized and relatively easy, with the monthly payment made clear. And when those two are taken off the list, college is the one still standing.
Families have access to financial aid calculators and other tools but don’t necessarily have the know-how to interpret the information. “We have an incredibly complex, bureaucratic financing process, and we have teams of individuals [in financial aid offices] who are underresourced,” says Glynn, who is now vice president for student financial success at financial aid software company CampusLogic. While she doesn’t quite know how it could be done, in her ideal world, students would have four-year financing for college, with locking in tuition as a step in the right direction.
“If we want students to be making good financial decisions, we need to show them what their cumulative decisions represent. We need to show them what the impact can be,” Glynn adds.
But the fact is, eight out of 10 students surveyed by Inside Higher Ed and College Pulse who have applied for financial aid did not have a one-on-one meeting with a financial aid office administrator to help in that process. Nearly one-third of students on financial aid have never personally interacted with the financial aid office in any capacity.
The Student Voice survey of 2,000 students, conducted Jan. 31 to Feb. 7 with support from Kaplan, also found that:
- Three out of 10 students with student loan debt (n=1,550) think it’s somewhat or very likely that some or all of the debt they incur in college will be canceled or forgiven.
- Only 30 percent of students in the full sample agree strongly or somewhat that their university has adequate support in place for students facing a financial crisis.
- Fewer than one in 10 disagree that colleges “should be responsible for assisting students during a financial crisis.”
Here’s more on student perspectives about student loans, the financial aid process, what resources and supports they are aware of, and what they expect.
Student Loan Situations and Hopes
About three in four students surveyed say they will have student loan debt after graduation—but half of them either don’t know how much or aren’t aware of what the monthly payment will look like.
Since that information is accessible—from the campus financial aid office or by using a variety of online tools, including the Federal Student Aid Loan Simulator—it’s probably safe to assume they don’t want to think about it. “It appears that most are keeping their heads down about the consequences of that loan debt—sort of see no evil, hear no evil,” says Justin Draeger, president of the National Association of Student Financial Aid Administrators.
As one respondent from a public university in Massachusetts noted, “For the average student, it’s quick money up front, convenient and almost free in the sense that payments are so far off in the future, who cares.”
Research from Trellis Company in the report “Student Financial Wellness Survey Results: Fall 2020” showed a lack of confidence in being able to pay off college student loan debt. That was the case for 28 percent of community college borrowers, 31 percent of public four-year institution borrowers and 35 percent of private institution borrowers.
The Student Voice survey sought perspective on loan forgiveness, with the results indicating that some students are either not reading beyond the headlines to learn exactly who is getting their loans canceled or forgiven, or they are thinking that new debt forgiveness action will be taken after they graduate. Thirty percent think it’s very or somewhat likely their debt will be erased, with Black students being the most likely racial group to think it’s very likely. Three-quarters of students surveyed think it’s not too or not at all likely, with those who identify as being part of the lower socioeconomic class being the income group least anticipating a break on their debt.
A similar question was asked this winter of a group of 1,000 student loan borrowers in the repayment stage by ConsumerAffairs, a for-profit company offering news, reviews and buying guides for consumers on various topics. More than half of those respondents believed their student loans will be forgiven. The survey focused on COVID-triggered emergency forbearance on federal student loan debt, which is ending next month. More than one-third of borrowers had not made a single payment during the pause, and about the same percentage said they were likely to miss a payment when the freeze is lifted.
Financial Aid Process Points
Ninety-four percent of Student Voice respondents have applied for financial aid at some point, with four in 10 finding the process very difficult (8 percent) or somewhat difficult (32 percent). Forty-one percent found it not too difficult, and 13 percent not at all difficult.
“It is true that applying for financial aid is a tedious process,” says Ganesh M. Pandit, an associate professor of accounting at Adelphi University, who teaches a series of two-hour financial literacy workshops for students, faculty and staff, as well as a 15-session financial literacy academy for students with autism. Keeping the process time-consuming but not difficult, he added, depends on the support that’s available to and sought out by students.
Students at private colleges report having struggled most with the financial aid process, with about half of those at private institutions saying it was at least somewhat difficult, compared to 39 percent of public college students. Latinx and Asian students had the most difficulty compared to other racial groups, and Black students were the most likely to say it was not difficult. Black students are also the most likely racial group to have interacted in some way with the financial aid office.
Over all, are students turning to the experts for help? Not exactly. They’re most likely to have gotten advice from family and friends when applying for financial aid. And that, says Draeger, “will give the financial aid community some heartburn.” Online tools from the government and information available to all students on the college’s website are the next two most common sources of application help.
Why are so few students meeting directly with a financial aid office administrator? “These students have been traumatized financially over and over again in their life,” says Glynn, noting the 2008 recession, the housing bubble and pandemic-related job loss and underemployment as examples. “It takes more for students to have trust and to be willing to reach out to those professionals because of how personal these conversations are. We need to do more to build that trust in the relationships.”
Turning (or Not) to Aid Experts
“The formula for college success today only has two elements—grades and money.” Paul Goebel, director of the Student Money Management Center at University of North Texas, tells students this so much, he’s sure it will become his epitaph. An advocate for students having both academic plans and financial plans, every semester from first to last, Goebel will coach students one on one through the basic skills of money management—planning, reviewing and observing.
While a growing number of higher ed institutions have financial literacy programs and departments, financial aid offices are increasingly getting involved beyond transactionally. “There’s been a push about being more hands-on as it relates to conversations about financial aid,” says Phil Schuman, executive director of financial wellness and education at Indiana University at Bloomington. However, to staff in that office, “financial literacy” generally refers to student loan literacy, including effective borrowing practices, adds Schuman, whose office runs the national Higher Education Financial Wellness Alliance.
Of the 70 percent of Student Voice respondents who have interacted in some way with the financial aid office and its staff, email is the most popular means of interaction, followed by phone or video calls.
Black students are especially utilizing online chats via the aid office website, with twice as many in this group taking advantage of that option than the full survey sample. First-generation college students who are also Black are even more likely to use them, about twice as often as other first-gen students.
Over all, students at private institutions are interacting personally with the aid office more than their public college peers.
To Draeger, the responses to this question are clear evidence that “a good number of students are looking for virtual, synchronous and asynchronous options to interact with their aid office.” The data could be an argument against all office staff needing to be on campus full-time.
Rating the Aid Office
“Good” and “fair” are the most common ratings students would give their financial aid office, based on their overall experiences with the department.
Less likely to assign a negative rating are students at two-year colleges; 23 percent of this group rated the office as fair or poor, compared to 44 percent of students at four-year institutions.
Draeger says that finding was notable, given that financial aid offices at community colleges are more likely to be short-staffed. Perhaps these students are relying more on and are satisfied with communications coming out of the office.
Or, as Glynn sees it, maybe staff members at these offices at community colleges are more aware of all the factors that can lead this population to not matriculate. “They’ve had to address the financial concerns and barriers or they will lose their students,” she says.
Draeger has seen more financial aid offices paying attention to metrics such as average wait times. In addition, “surveying students about financial aid services is more prevalent today than it’s ever been,” he says.
A big challenge is that, because aid programs are complex, students may look negatively on the staff in this office in general. “They bear the brunt of a lot of frustration with programmatic rules,” Draeger notes.
Also, staffing levels are down and employees are feeling burned out, Glynn says, adding that being short-staffed would make it “difficult to provide a positive student experience in a highly regulated field.”
The Student Voice survey asked how much students agree that the aid office makes an effort to ensure students have the knowledge they need, with nearly half agreeing strongly (16 percent) or somewhat (31 percent), one-third feeling neutral, and about one in five disagreeing somewhat (15 percent) or strongly (7 percent). Students at public colleges or community colleges (compared to those at private colleges or four-year colleges) are most likely to feel their aid office makes an effort.
Still, all colleges could strive for better. The results could indicate that “colleges have to be more proactive, sympathetic, encouraging and responsive, especially with respect to those students whose family backgrounds are not favorable enough to help them through the process,” Pandit says.
This is where other student-facing departments—e.g., student affairs, career services, housing—could also be involved in improving student experiences. “Financial wellness and financial literacy has a bit of a home in every department,” Glynn said. That includes academic areas, where faculty and staff may be the people students turn to when facing financial difficulties.
Applying the one-stop concept to student financial services areas is a direction Goebel can envision. “I think we’ll see that at the forefront and maybe the new model,” he says.
Institutions with financial literacy programs could also get a wellness-focused staff member on the team. Schuman’s department, which hired a MoneySmarts program well-being consultant, may be the first in the country to do just that. “We see the impact that finances have on a person,” he says. “Sometimes people don’t want to talk about financial skills. They want that cathartic moment to release stress about their financial lives.” The consultant—who holds degrees in learning sciences, educational psychology, counseling, student affairs and criminal justice—will listen to students who need to vent about finances and teach them stress-reducing techniques.
When Crisis Hits
Goebel’s Student Money Management Center shares a communications platform with the financial aid office. “We can see each other’s notes,” he explains, which opens the door to helping a student in crisis more quickly.
Sometimes providing financial help is like picking low-hanging fruit. In one recent session with a student who was short $2,500 on his account, Goebel was able to see the problem through that system. “I said, ‘You do understand you have a grant sitting here that you haven’t completed the application for? It’s been approved. All they’re waiting for is your application. Not only will it wipe out your gap, but give you a refund, which I’m sure will help you.’”
He will also hear from students who are missing what should be obvious that they were never informed about needing to take action. “I can pull up communications and say, ‘Actually, you’ve gotten 12 messages on this,’” he says. “Often students don’t understand that they could have easily kept an issue from escalating into a problem and a problem turning into a crisis.”
As one private Virginia university survey respondent advised, it helps to “get acquainted with resources and support early on, especially in case of emergency needs. The financial aid office is there for you, but you have to put in the extra effort to get what you need.”
The survey asked about a variety of financial resources to see what students report as available and which they have personally used. Thirty-five percent of respondents had not used any of the supports.
Although they aren’t using what’s there, some students want more. They are split pretty evenly on whether or not their institution has adequate support in place for students facing a financial crisis. But the greatest group of students is either neutral (23 percent) or not sure (24 percent) about that—which might indicate a lack of awareness and need to do more outreach about services and session options.
“It would fall back to how big or small a college is, says James Zugg of Texas Tech University, the graduate student assistant in the Red to Black Peer Financial Coaching office. “Small colleges have lesser manpower to help a student, as sad as that sounds. Larger universities have more resources and funding, but even then students can fall through gaps at a larger university.”
In terms of whether colleges “should be responsible” for helping students going through a financial crisis, students are much more likely to agree, strongly (36 percent) or somewhat (34 percent). Only 9 percent disagree that this is an obligation for higher ed institutions.
Among racial groups, Latinx students are most likely to strongly agree (47 percent) that colleges should be responsible for helping, which is about 10 percentage points higher than Asian and Black students, and 15 percentage points higher than white students.
This finding “really scared me,” says Glynn. “I don’t know how you reset that expectation. It is the responsibility of the institution to educate students about resources that are available.”
Perhaps respondents’ definition of helping in a crisis varies, Zugg suggests. “It might just be like pointing to the right resources, or to the emergency fund.”
High student expectations of colleges to help solve a financial crisis could also be attributed to colleges serving in loco parentis. “Colleges have become their own little world,” says Schuman. “The students are the citizens, and they rely on you for these things.”
Yet, in Goebel’s experience, students can take that reliance too far. Several years ago, a student came in at the end of the semester with his father in need of additional funds to pay their bill so the student could enter finals week.
Reaching out to the financial aid office, Goebel was able to resolve the issue and wipe out the aid-package gap—so long as the student went into his online account and clicked “yes” on the package by noon on Friday, when the offer would expire. “I made it very clear,” Goebel recalls. “But on Monday, guess who’s standing in my office? He said he went into the system and the money’s not there.” When did he log in to handle the task? Saturday.
“You have to hold students accountable for their inactions,” Goebel says, adding that some students are highly responsible and proactive about money matters. “They understand how they can advocate for themselves.”
But no matter where students are in their motivation and ability related to money management, higher ed institutions are focused on assisting, especially when it comes to ensuring basic needs are met. “When we see significant financial stress, it impacts our mental well-being as well as our physical well-being,” says Glynn. “It’s impossible for us to expect students to be at their best academically when they’re undergoing financial stress.”
Read additional coverage from the Student Voice survey on financial wellness, including a look at the need for more financial literacy education.