Analysis Finds College Students Know Very Little About How Financial Aid Works
“The findings highlight an urgent need for more financial literacy–specific interventions”
This is one of the factors contributing to the massive and growing problem of student loan debt.
Bloomberg reports:
Aspiring College Students Know ‘Shockingly’ Little About Financial Aid
High school students know very little about how financial aid works, according to a new analysis.
An overwhelming majority of 11th and 12th graders (from 73% to 81%, depending on income group) were unaware that the government will subsidize their interest on qualifying existing loans while they are still in college, according to a new analysis of data by the ACT’s Center for Equity in Learning. From 67% to 70% didn’t know about a program that allows students to repay loans slower, based on how much money they make after college, the study found. Data were collected in April 2018 from approximately 1,200 students registered to take the ACT.
College debt can have lifelong financial effects, and students across all income levels said tuition was a “very important” factor in choosing a college. Of those surveyed, 27% of black students and 31% of those who are first in their family to go to college anticipate paying tuition without family help, compared to 20% overall.
“The findings highlight an urgent need for more financial literacy–specific interventions, especially in light of the economic stakes at hand,” said Jim Larimore, chief officer at the ACT’s Center for Equity in Learning. The center outlines steps for improvement, including tailoring information for different student groups and improved outreach by college representatives.
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Comments
I’m sorry but why would you expect high school or even college students to know very much about how ANYTHING works? What on Earth do they think school is for?
Yes, teaching them about the debt they are or soon will build up is a good idea. Teaching them to read something other than twitter, or maybe to listen respectfully would be really nice, too.
Duh!
To paraphrase a comic who I can’t remember exactly:
When I was in my teenaged years, my old man was an idiot, but by the time I hit twenty, it was amazing how much the old man had learned.
Do they know that the discounted interest only applies to federal student aid, which pays only $5500 per year for a freshman? Do they know that financial aid statements assume a family contribution that may not be forthcoming?
There’s a lot on the other side, things that are even more important that they also don’t know. The article is one-sided.
When I was going to school on my own in the 80’s, I used to look at that ‘expected family contribution’ and laugh. I swear, if I had been an unnamed orphan fished out of the ocean, the state would have expected the dolphins to cough up ten grand a year.
Still, if not for Federal student loans (and the grace of God, lots of luck, many hours washing dishes, etc…), I never would have made it through, and we eventually got them paid off, so win.
You could have cut that headline down a little and made your point: “”ANALYSIS FINDS COLLEGE STUDENTS KNOW VERY LITTLE””.
None of which has anything to do with the problem. And that is that college is shockingly expensive. All a student can do is try to see that what he’s buying is actually something worth paying for.
It’s not that students (high school or college) don’t know much about financial aid. They don’t know MATH. They can’t add, they don’t know what a percentage is, and they can’t even use calculators effectively.
I switched from a percentage grading system to a point-based one, and a student who has enough points for a C will e-mail me to discuss whether he’s going to get a B+ or an A-. (They don’t know math, but they do have high self-esteem!)
I may have to move to a color-based system.