PHOENIX, AZ, OCTOBER 8, 2019— CampusLogic, higher education’s leading student financial success platform, today announced the release of an in-depth data report, “Clear Disparity,” which adds consumer voices to the debate surrounding financial aid award letter confusion. A key finding of the report is that students who are in the greatest need of financial assistance to pay for college—those coming from households earning incomes of less than $25,000 annually—are more likely to be confused by both terminology and amounts on award letters. Higher education stakeholders and policymakers have been raising awareness regarding award letter confusion for some time, but there has been limited input from students and parents regarding specific aspects that cause confusion—until now.
In a survey of 1,000 students, 750 parents, and 230 financial aid experts, CampusLogic asked participants to share exactly which terminology and dollar amounts on the U.S. Department of Education’s College Financing Plan they found unclear, as well as why they found those items to be unclear. The results show that almost 60% of students identified some amount on the award letter as being unclear, and almost 70% identified some wording or phrasing as unclear—making it difficult—if not impossible—to comprehend the long-term consequences of their college financing options.
Moreover, key learnings indicate that using a one-size-fits-all approach to advising students of financial aid offers and options does not take into account the significant disparities that exist between student and parent consumers. Specifically, survey respondents reported different aspects of award letters as unclear based on household income, age, and race. Currently, more than 3 million students drop out of school every year for reasons related to finances—taking with them debt without degrees. The importance of driving comprehension of financial decisions cannot be overstated.
“It is essential to have informed, thoughtful discussions at the institutional and policy level regarding the data in this report in order to initiate innovative solutions that address consumer confusion directly, so that students can make informed borrowing decisions and clearly understand the implications of their decisions,” said CampusLogic VP of Research, Carlo Salerno, PhD. “By working together to tailor messaging to unique consumer needs, we can ensure success for both institutions and students.”
More than $240 billion in federal and state aid is available annually to students to support their higher education pursuits—and financial aid award letters are the main way students and families receive crucial information about eligibility and access to this funding. Being able to understand this information is pivotal to students when it comes to making important decisions about where to attend, how much to borrow, and whether they can adequately fund their education for the full term required to obtain their degree.
“The data in this report paints a clear picture,” added Amy Glynn, VP of Student Financial Success at CampusLogic “What we are doing today is not good enough. Consumer confusion is the enemy of financial aid professionals, and right now, institutions, policymakers, and advocates for student financial success have the opportunity to step up and drive change. We need to work together to find new and better ways to present information to students and parents, including standard language and calculations, as well as highly personalized content.”
The data and technology required to remedy this situation and empower students and parents to make the best decisions for their financial success already exists, although many schools still rely on jargon-laden paper communications. The findings in this report show that the most effective way to drive comprehension—and in turn, student financial success—is to arm students with improved resources and highly personalized information based on their individual circumstances. Amy Glynn wraps up the findings of the in-depth data report by saying, “Higher education is likely one of the biggest expenses any individual will incur, and it has the potential to change the trajectory of an entire family. We owe students and parents an approach that enables them to make the best decisions for their financial success.”
Join this important discussion with CampusLogic’s Carlo Salerno, VP of Research, and Amy Glynn, VP of Student Financial Success, in a free webinar, “Clear Disparity: New Data Adds Consumer Voices to Award Letter Confusion Debate” on Tuesday, October 29. Sign up here.
CampusLogic helps schools change lives by delivering the first—and only—Student Financial Success platform that incorporates a net price calculator, complete scholarship management, personalized digital communications, simplified financial aid verification, 24x7 multilingual virtual advising, tuition and scholarship crowdfunding, and integrated data visualizations. Over 500 schools across the country use CampusLogic to provide their students with an easy, mobile and personalized experience to simplify the financial success journey, resulting in increased enrollment, better informed borrowing, and improved retention. CampusLogic annually hosts EmpowerED, a conference dedicated to providing student financial success professionals with access to industry trends, best practices, and networking opportunities with like-minded colleagues. For more information, visit campuslogic.com.