July 10, 2024 • 40 mins
How has the value of the Pell Grant evolved from a crucial lifeline to a mere drop in the bucket when it comes to covering today's skyrocketing tuition fees? Join us on Make the Leap as we uncover the historical shifts and present-day challenges faced by low-income students navigating the financial aid landscape. We'll take you back to 1972, when the Pell Grant was introduced, and contrast its purchasing power then versus now. Through real-life examples from Michigan's public and private colleges, we illustrate how the gap between financial aid and actual tuition has widened, leaving students with overwhelming financial burdens.
Ever wondered why the financial aid process feels like an uphill battle for so many? This episode dives deep into the systemic hurdles that underrepresented groups face, from complex FAFSA requirements to the often inaccessible documentation needed for tax filings. We emphasize the critical role of financial aid administrators and the importance of exercising professional judgment to foster a more empathetic and comprehensive approach. By addressing these multifaceted challenges, we advocate for policies that genuinely understand and alleviate the struggles of low-income students.
Technology has the potential to revolutionize the student financial aid experience, but is it a double-edged sword? We explore how digital tools can both simplify and complicate the process, offering self-paced resources and targeted support while also increasing complexity. This episode sheds light on the recent overhaul of FAFSA aimed at simplification and discusses the paradox of choice in educational decision-making. From exploring the shift from grants to loans to personal anecdotes highlighting the financial instability caused by student debt, we offer a compelling discussion on the evolving financial aid landscape. Tune in for insights that could change the way we support our future scholars.
We’d love to hear from! Send us a message or topic idea.
Stay up to date on Make the Leap by following us on our website, rosspodcast.com, Facebook and LinkedIn.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:10):
Welcome to Make the Leap, a podcast focused on the
many economic hurdles facingcollege students, lower income
individuals and those strivingto move up the social ladder.
I'm Brad Constant here withGeorge Graeb and Kristen Biel.
(00:32):
George, let's start with you.
What is our topic for today?
Speaker 2 (00:36):
All right, thank you, brad.
Our podcast for today dealswith issues in relationship to
financial aid and in issuesrelating to students with
limited income trying tonavigate the financial aid
process as they attempt to go tocollege or a post-secondary
institution.
I'm going to deal with it froma couple of points of views.
(00:56):
One is we'll talk throughtuition over time and the impact
of Pell, and then we'll talk alittle bit about the way the
model is set up right now, onhow punitive sometimes it can be
to students who have limitedincome.
Pell Grant, which is thefoundation of the financial aid
process, is at least.
(01:17):
We'll go back to the origins ofthe Pell Grant, which is the
foundation of the financial aidprocess, and then take that
through the years in comparisonto what tuition used to be and
what it is today.
I'm going to walk through threecomparisons.
We're going to talk about aleading public institution in
(01:38):
Michigan which is considered asthe number one public state
university.
We will talk about one that ismore of a private, nonprofit,
more liberal art institution,and then we'll use Ross also as
a mechanism to compare.
The Pell Grant has been aroundsince 1972.
It was part of a bill that wassponsored by Senator Pell and
(02:01):
therefore it's been called thePell Grant.
It's now 52, 53 years thatwe've had the Pell and therefore
it's been called the Pell Grant.
It's now 52, 53 years thatwe've had the Pell Grant.
If you went to college in 1972,the Pell Grant would have been
$500.
So the minimum you would havegotten would have been $50 and
the max you would have gottenwould have been $500.
So let's kind of take this incontext in terms of what was the
(02:24):
tuition then at a couple ofinstitutions and how the Pell
Grant would have played out forsomebody that is coming to a
school with limited resources.
The premise of the Pell Grantis that if your household income
is about 150% of the povertyline you will get the full Pell.
So in 1972, the poverty linewas roughly for a household of
(02:47):
one, roughly $4,500 for anannual income.
The Pell Grant looks at it moreon a household basis.
So if there's two or threepeople, obviously the amount of
annual income you would have andstill be considered poor would
be higher.
But if you were at 150% of thepoverty line in 1972, you would
have gotten 500 bucks in termsof Pell Grant.
(03:09):
The state university we're goingto use.
Their tuition in 1972 was $350per term.
So for a full year to go at theleading public state
institution in Michigan wouldhave cost you roughly $700.
So if you are poor, you qualifyfor the PAL.
Your out-of-pocket costs orpotentially covered by state
(03:32):
grants or other mechanism wouldhave been $200.
So if we move over to a privateschool also in the state of
Michigan, if we look at theirtuition in 1972, it was $2,600.
None of these numbers includeroom and board.
This is direct tuition, doesnot include fees, does not
(03:56):
include books, does not includesupplies.
This is simply direct tuition.
So that private institution was$2,600 to go to that school for
one academic year.
So let's fast forward to today.
So the Pell Grant has gone from$500 to $7,395.
(04:17):
So basically, over the last 52years, if you are poor and you
rely on the Pell Grant to go toschool, you will get $6,895 more
than you would versus somebodywho went there in 1972.
Now the argument sometimes willcome is the value of the dollar
in 1972 versus the value of thedollar today, and I will touch
(04:43):
on that here in a bit, but justto make my point.
So the Pell Grant's additionalmoney is $6,895.
That State University's tuitiontoday that was basically $700
per academic year is roughly alittle bit over $18,000.
So let's play the math If youare poor, if you are poor in 72,
(05:07):
your out-of-pocket cost isabout 200 bucks.
If you are poor today and youwant to go to the same
university, your out-of-pocketcost now is almost $10,000.
So I titled this podcast asPunishing the Poor.
So, as you could see, that $200shortage is now $10,000 per
(05:31):
academic year.
That is going to cost you to goto the same school Now if you
decide.
But I want to go to a privateschool, liberal arts school that
is also in Michigan.
Their tuition today, againwithout room and board, is
$41,500.
So the Pell Grant in 1972 wouldhave covered $500 of the $2,600
(05:55):
.
So their cost would have beenabout $2,100 out of pocket.
Today, if they decide to go tothe same school, it would cost
them almost $34,000 more peracademic year.
So the argument is what aboutthe purchasing, the value of the
dollar?
So to keep this into context,you could have gone to that same
(06:16):
university for four years inthe early days of the Pell Grant
for about $6,000 in total.
For about $6,000 in total, thepurchasing power of $6,000 in
1972 versus today is roughly$44,000 to $45,000.
It costs you almost.
You pay that much almost in onefull year, especially when you
(06:37):
add up the room and board versuswhat you would have had to do
in 1972.
In the 1970s it would not havebeen unheard of to have a
part-time job, work duringschool and pay for college
without having to go on intodebt or having to take out
student loans.
That option obviously does notexist anymore.
(06:57):
So that's the first part of thepodcast, which is how much
tuition has come versus how muchgrants are now available to the
student.
In the late 1970s, early 1980s,universities began to expand.
They began to expand locations.
They began to add buildings,buy land.
They become incredibly moreexpensive.
(07:19):
The dorms some of them becamemore of a state of the art, and
that has continued over time.
Dorms Some of them became moreof a state of the art, and that
has continued over time.
Athletic programs are beingadded and the notion was and
still is in many of theseinstitutions.
They called it kind of the newfinancial aid model for poor
students is high cost, highfinancial aid.
The argument was being madethat if you charge a lot, then
(07:42):
you could use the money that youget from the student that can
afford to pay to finance thestudents who cannot pay.
So basically, if you get a cashpay for an $18,000 or somebody
mom or dad are going to write acheck they're going to be able
to subsidize a student that maynot be able to afford to go to
(08:03):
that school.
That argument has been reallydifficult to see today, just
because the financial aid amountdid not increase.
So, even though in concept youcould make the argument, if more
people pay into the system,some of that money can be used
to help students who come fromlimited resources.
But as you can see with bothexamples the cost for somebody
(08:26):
with limited income or livingaround a poverty line that model
no longer works.
And then there's a second pieceto why that model no longer
works.
The pressure to recruit thestudents who can pay is so high
that universities and maybe notas much in the public sector,
but definitely the privateschools have introduced a whole
(08:47):
new concept which is calleddiscounting.
So they are competing so hardfor the student that can afford
to pay, that does not need theneed-based grants or the
need-based funding, that nowthey are basically for lack of a
better word, and this is myterm but they are discounting
their tuition.
The discounting rate at privatenonprofit is almost 56%, so
(09:12):
that's how fierce thecompetition is for the student
that can afford to go to school.
So the model of high tuition,high financial aid, is really
not even doable anymore becausethe schools have abandoned it as
they try to chase additionaldollars from the student that
can pay.
So on the podcast today we willwalk through some elements of
(09:36):
this in terms of what thestudents can do, what are the
things that are available tothem, but also to really present
that the financial aid processthat was built in 1972 is really
no longer feasible and is nolonger helpful to students who
have limited income.
It's becoming even moredifficult to go to school today
(10:00):
versus even back in 1972.
So to be fair in that process.
So let's talk a little bit aboutRoss, and I've been here for a
little over 13 years.
When I started at Ross, thePell Grant was $5,500.
Ross's tuition was $14,950.
(10:21):
13 years later, the tuition forRoss is $15,950.
So we raised the tuition by$1,000.
On the flip side of that, thePell Grant has increased by
$1,850.
So to attend Ross 13 years agoversus today, our current
(10:42):
students will borrow almost$1,000 less 13 years later than
students in 1972.
That's really ultimately howfinancial aid needs to work.
It needs to continue to makeattending college, attending
post-secondary, attending aschool more reasonable within
(11:02):
the resources that the studentshave.
Student loans are becoming sucha big piece of financial aid
and it's hard for, I think, ifyou're not in the industry or
you don't work in higher ed.
It's hard sometimes to graspthe challenge that our students
go through.
72% of all undergraduates needfinancial aid, some type of
(11:24):
financial aid, whether it'sinstitutional, whether it's
state or whether it's federal,and loans now play a much bigger
role than grants In most cases.
Difficult proposition to askstudents to go and take on loans
to go to school knowing thatthey ultimately need the skills,
(11:52):
they need, the training to geton to the next chapter in their
life and whatever that careermay be.
But the road now that wassupposed to be driven by grants,
by ability to pay for it, maybethrough work, study, through
taking another job, is nowtotally dependent on how much
loans you have to take or youare willing to take.
Speaker 1 (12:14):
Thanks, George.
This is going to be a greatepisode.
There is so much to talk aboutregarding financial aid, loans
and all that stuff, but it'stime to meet our guests Kristen,
who do we have the pleasure ofchatting with today?
Speaker 3 (12:28):
Well, we are lucky to be joined by Ross's Liz Lee.
Liz has been the Director ofFinancial Aid at Ross for nearly
three years now.
She earned her bachelor'sdegree in business from
Davenport University, followedby two master's earned at Grand
Valley in education and schoolcounseling.
Throughout her career, liz hasbeen a school counselor, held
(12:51):
multiple financial roles,overseen student services
departments and even has her ownconsulting practice.
She's also a current boardmember for the Ross College
Foundation.
Regardless of the role, lizstrives to help students and
colleagues step into the bestversion of themselves.
Liz, thanks for joining ustoday.
Speaker 4 (13:13):
Good afternoon.
Thanks, Kristen.
I'm really thrilled to be here.
This is not a light topic, butI'm really excited to dive in
with y'all.
Speaker 2 (13:22):
You begin about the financial aid process, both in
terms of setup in terms ofaccess.
Many of our students tend to bepromised a system that they can
access easily.
Many of our students are lowincome.
Sometimes they lack theresources, they lack the
technology.
The process seems incrediblydifficult, so the question is
(13:43):
why is it so hard?
The process seems incrediblydifficult, so the question is
why is it so hard?
And as we continue to rely ontechnology, is that a help or a
hindrance to their ability toaccess financial aid?
Speaker 4 (13:53):
Yeah, it's an interesting question and a
loaded question.
I don't really pretend to knowall of the different parts that
come into play in terms of, youknow, the government has
negotiated rulemaking when wemake decisions about the
financial aid process or justthe bureaucratic process in
general commonalities over theyears as it relates to some of
(14:19):
those barriers and justaccessing financial aid in
general.
I think the first one is justthat college educated people are
really the ones making thesedecisions.
They've already navigated theprocess.
They're used to a lot ofassumptions that people can just
do that I don't think are avery common thing for
(14:41):
underrepresented groups orlow-income families.
So, like an example of thatmight be, I file my taxes every
year.
I understand that there aredifferent parts of my life with
different application processesthat might require me to access
those taxes right.
So I know that I have to followthe IRS guidelines.
I know what those deadlines arebecause my family has always
(15:05):
done that.
They've modeled that, theyteach me how to do that, and so
I keep a copy of those records.
I, like I said, file on timeyear over year.
I know where they're at, I keepthem in the same spot and so
it's easy for me.
That's not a burden for me Ifsomebody says Liz, I need a copy
of your taxes from 2021.
And so I think, like there's alot of assumptions in that that
(15:28):
students and families do thatsame thing, and I think that is
one of the big barriers.
As you can imagine, with theFAFSA and the financial aid
process, taxes are a huge partof that process and so if
there's something in flux withtheir taxes, or they didn't
understand that, or they justeven don't, they're not
(15:49):
organized to realize they needit again after it's done, that
in and of itself can be abarrier.
That's a good example.
When I say there'scommonalities that I think are
just assumed and it's a big dealthen for a lot of families
because a lot of complexity cancome into that.
Speaker 2 (16:08):
As we think of financial aid.
Sometimes we focus on FAFSAright, but there are a lot more
components to it.
Fafsa is one part.
Institutional grant is anotherpart.
State grants is another part.
You know different resourcesthat are available.
The process seems to be fixatedon kind of the traditional
environment where parents andkids work together on completing
(16:30):
a FAFSA and you talk aboutfinding the taxes, finding the
resources.
Sometimes our students don'treally that, may potentially be
a dependent student, but havereally no access to their
parents or have no access totheir taxes.
The government sometimes mayeven know more about their
parents than they do.
Many of our students live inwhat I would call
(16:51):
intergenerational poverty.
It just seems that the processis incredibly difficult.
It's like you have to provethat you are poor.
It's not enough that you arepoor, but you also got to come
up with a way to prove beyondreasonable doubt that you are
poor.
I mean, you do this day in andday out and you probably see
different scenarios of wherestudents have a tough time
(17:15):
getting what they need to getthe financial aid that they're
absolutely eligible for.
You know why do you think we dothis?
Speaker 4 (17:23):
Yeah, george, actually I think that's a huge
part of it.
So I started working infinancial aid in 2006.
And I worked in financial aidfor about 10 years and then I
went off and I did some otherthings and when I came back to
financial aid I said I only aminterested in this role if I can
bring back the people side ofthe process.
(17:45):
And what I meant by that wasthat these are the things that
you see a lot of times infinancial aid offices where
we're so fixated on.
This is the rule, this is theblack and white process, and so
we have to make the student dothis.
We have to do X, y and Z andactually the government and the
(18:09):
rules that are around that.
There's a lot of financial aidthat we call it professional
judgment.
As an aid administrator, ifyou're trained and you know the
regulations, you know where youdo have to, you know draw the
line to say, okay, I understandthis can be a challenge, but you
know I'll walk with you throughthat.
(18:30):
But then there are other timesthat you can exercise that
professional judgment to say,you know, we're really splitting
hairs here.
Or even if I make the studentgather all of this documentation
, it doesn't change what theiraid eligibility is.
So the government actuallygives us that exercise to be
(18:50):
able to do that.
And that's really what I focus alot of my time on with the team
is understanding deeply thereason why we're asking for
something and always connectingit back to the regulation,
because that allows us to serveour students better.
And I think, the more that youcan equip financial aid offices
to think more holistically likethat and not just setting out a
(19:14):
process and saying follow thisprocess because you have to.
And I will say I think thatover the years I don't have a
specific, you know, data metric,but I do think that there's
been a lot of evolution in termsof the work that we're doing,
especially here at Ross, withstudents who we can remove those
(19:34):
barriers to go back and askokay, why are we asking for this
?
Does it change aid eligibilityor are we just making them jump
through another hoop?
Speaker 3 (19:44):
Yesterday's training and admissions was focusing on
helping students overcomeobstacles before enrollment and
after enrollment, and, of course, financial considerations is
one that we work with studentson.
However, about 10 minutes of ourdiscussion yesterday focused on
the social pressures that mightbe exerted upon students to not
(20:10):
disclose that they are afraidor not, let you know that
they're not prepared or not, letyou know that they don't know
how to do something, and ourfocus in admissions was to say,
hey, just because someoneenrolls does not mean your job
is done.
This is just the beginning ofassisting them to get to
(20:30):
graduation ultimately and youhad touched on something that
really resonated with me andthat was talking about modeling
the behavior that you hadwitnessed, that behavior perhaps
from your family, and so we'reencouraging that in admissions
now to do the same.
Is that something that thecollaboration between financial
(20:52):
aid and admissions can benefitthe student?
By kind of looking at thepressures that someone might be
feeling and put ourselves intheir shoes and say, okay, we're
going to have to approach maybethat hard conversation in a
different way.
Yeah, what are your thoughts onthat?
Speaker 4 (21:10):
I'm really thinking two things come to mind, which
is the collaboration and thetechnology piece.
And so I mean, especially hereat Ross, we work really closely
with our admissions team on adaily basis.
We have constant communication.
It's not like working onprojects or different things
that are coming up in terms ofoverall, like organizational
goals.
We are working on studenttopics.
(21:34):
But I think the technology is apart of the solution, because
there are a lot of students whodon't need our help, right, they
need resources, they need shortvideos, they need, you know,
reminders.
But you can build thetechnology to offer those
students those pieces so thatthey can navigate the process
and, honestly, our students wantthat.
(21:55):
They're used to doing thingswhen they want to do it on their
phones at night, at aconvenient time for them, and
they can navigate it a lot ofthe time.
But you have another group ofstudents who really need more of
that hand-holding, and so if wecan leverage technology to be
(22:16):
able to assist and, you know,kind of move students through
that are a little bit moreself-paced and self-directed,
they can do that and they feelcomfortable with that, engaged
right.
How do we personally connectwith them?
How do we identify key dataelements that we know are the
(22:41):
barriers and specifically reachout to the right group of
students so that they're notmissed.
I think that's usually whathappens in, you know, a large
system is that students getmissed, they get lost in the
shuffle.
But that is where we can reallyutilize technology and the
advances to be able to identifythose students.
(23:04):
Pretty clearly.
We've got some good data pointsright.
We know the students thatstruggle.
We know answers to questions onapplications or FAFSA that are
good indicators for us that thatstudent is going to need a
little bit more support and wecan put them into different
groups and have people that arespecialized in that piece of it
(23:26):
to really help those students.
Then the student experience, Imean, in my opinion, goes up a
million percent because theyfeel like we see them, we hear
them, because they feel like wesee them, we hear them and we're
there to support them.
Speaker 1 (23:45):
We've mentioned FAFSA .
That's the Free Application forFederal Student Aid.
It's been in the news a lotlately Delays, mistakes,
reprocessing we could spend awhole episode talking about just
that.
The form is so many questions.
If it could be reduced down, itcould fit on a postcard, to use
George's terms.
If the IRS is alreadycollecting all of this income
information through taxes,through other things like, what
do they really need?
Speaker 4 (24:07):
Yeah, it's a great question and I'm glad that we
brought it up because I feellike I have an unpopular opinion
about it because there's beenso much negativity in the media,
even with financial aid offices, with the National Association.
I mean, I have a tendency toalways reframe to the positive.
(24:29):
It's just how I survive life,but I don't think things are.
I think it's been a hugeoverhaul right and with that
comes a lot of things we didn'tanticipate and things that the
government didn't anticipate,and technology barriers, just
like I was just saying out ofyou know, one side of my mouth.
Technology can be the answer,but if it's not done well and
(24:51):
you don't take the time andreally troubleshoot and build
out all of those differentscenarios to George's point,
like if you don't know who youraudience is, you don't know who
those students are and how theycould experience that, or you
know, have it on the user endthen there's bound to be errors
and delays and that's reallywhat we're experiencing right
(25:13):
now.
Is that just maybe that thewhole scope of the work maybe
wasn't fully there, but for thestudents who have done the FAFSA
for 24-25 and it's worked.
I know that's not been all thescenarios, there has been a ton
of feedback.
This is where I say it's anunpopular opinion, that it truly
(25:35):
is simplified.
So the idea of this overhaulwas called FASTA simplification
right, and it really did takethe 100 questions off of the
FASTA that it's been done forhow many ever years?
Down to about 35 questions.
So that in and of itself is anadjustment right.
It is a streamlined, moreefficient way to gather that
(25:58):
information.
Speaker 3 (26:00):
Filling out college applications, which one might
think would have become easierin the digital age, has become
time consuming, and studentsapply to more colleges now, and
elite colleges now even try todistinguish themselves with
essay requirements, for example.
They have multiple deadlinesand different types of
admissions, including earlyaction early decision one, early
(26:25):
decision two.
What are your thoughts, liz?
Does that defeat the FAFSAsimplification idea?
Speaker 4 (26:32):
Fascinating question, kristen.
I'm actually so bear with mehere.
A second, because several yearsago I read a study that was
talking about flavors of icecream and basically the outcome
your brain is wired that theless choices you have, the more
satisfied you are.
So if I have three choiceschocolate, strawberry and
(26:52):
vanilla I choose one of those.
I'm happy because I pretty muchknow I don't like chocolate or
vanilla.
Like I'm going to be happy withmy strawberry, but I have 99
flavors.
Odds are, after I choosewhatever flavor, I choose cookie
dough I'm going to feel like,hmm, did I make the right
(27:12):
decision?
And so I think some of thatcomes into play when there's so
many options.
Now I think about that withstudents and, like you said, I
have a little consulting piecethat I do and I help students
navigate this process, mostlyjust because I like to work with
students and it is.
It's really overwhelming andthere are so many good choices
(27:35):
in terms of trade school options, community college,
professional tracks or even likedirect workforce, and I think
they're all great options foreach individual.
Right, you have to make thatdecision as an individual, but
what students are doing, too isthey're looking at YouTube and
TikToks and all of these likelife hacks that are giving them
(28:00):
the answers to how they navigatethis process, and what they
should really be doing istalking to trusted people that
are in their circle circlethat's my opinion on it because
there's so many resources,whether that's your school
teacher or your school counselor, or you know college that you
(28:20):
visited that you just feltreally at home at, or you know a
trade school or somebody that'sin that field, maybe
electrician or medical assistant, like whatever that is.
You're talking to those peoplethat are in your circle to
really break down the rest ofthe noise, because it is a lot.
But once you can make thatdecision for yourself, then you
(28:43):
can navigate that process, Ithink, a little bit easier, and
even in financial aid officesthat's what I encourage my team
to do is be that trustedresource.
That's why we partner withadmissions.
Sometimes those admissions repsare a trusted resource for that
person because they've gottento know them through the
enrollment process and so theycan help connect that student to
(29:04):
what's going to be the bestoption for you at this school.
Speaker 2 (29:10):
So one part of financial aid Liz now is student
loans.
You know I highlighted as goingback to the original the Pell
Grant.
The majority of financial aidLiz now is student loans.
I highlight it as going back tothe original the Pell Grant.
The majority of financial aidused to be grants.
80% of all your financial aidused to be grants.
Today it's almost 60% of it isloans.
We rely heavily on loans, nowmore than ever, to have kids go
to school, especially kids thathave very limited resources and
(29:33):
no money at all.
How did we get here?
Speaker 4 (29:36):
Well, that's a good question.
I mean I don't know that I havethe answer to that.
Costs change over the years butinstitutions have also grown
and tuition charges atinstitutions have far surpassed
what standard inflation is.
But the Department of Ed can'tkeep up with it on the funding
(30:00):
side and families can't keep upwith it.
So it's almost like it's goingback to how it was when higher
ed was originally started, whereit was only for the elite.
There's been questions around.
Will that start to come backwhere our schools, but also to
move?
Speaker 3 (30:38):
them forward in economic status after they
graduate?
I wonder to myself I've seendata, but I don't have it at my
hand, about cultures and theirperception of loans, for example
.
And what about low-incomefamilies specifically?
Are you familiar with anyinformation that talks about
(31:00):
their willingness to take outloans or what the effect is on
those low-income families whoare forced to do that to take
more loans out?
Speaker 4 (31:11):
I think it really goes both ways and even for
myself personally, I was a firstcollege, first generation
college student and my mom'smessage was just you have to get
an education and whatever ittakes to get there, you kind of
worry about it later, and sosome of that is just that
(31:34):
blindly.
You know signing the forms, youknow filling out promissory
notes for the government andbecause you never exchange hands
, you know what I mean.
Like the government doesn'tgive the student that money and
then the student pays their bill, just happens all in the
backend process and so you don'tmake as many connections there
(31:56):
that like, oh, this is actuallynot money, that was free, but
that financial aid also includesloans, and so there's confusion
there after they graduate tosay, wait, no, I got financial
aid, what do you mean?
I owe this back Because of thatapproach.
I just have to get thiseducation to get out of my
current situation and I'll worryabout it later type thing.
(32:19):
And for me that worked out, youknow and I, but I don't think in
every situation is it as assuccessful, because you really
do have to understand whatyou're committing to.
But I think on the flip side ofthat, it's also a barrier where
they just say no to loansaltogether and they're not
really thinking about the factthat there are schools that you
(32:42):
can go to, that you're takingout minimal loans.
They just shut down the wholeidea of college because they
just say I can't afford it,without fully knowing, without
fully doing the research orapplying to multiple different
schools, that the aid might lookdifferent.
Aid can look very different atdifferent institutions.
Speaker 3 (33:03):
Do you think that those loans and that subsequent
debt affects low-income familiesin a disproportionate way?
Speaker 4 (33:12):
Yeah, I think, because when you're yes, I do
think it does because thethere's so much less room for
buffer right when you're, whenyou have a low income budget,
that income is fixed right.
Like you, you don't have a lotof room.
Even if it's a it's an extra$50 a month or a100 payment,
(33:36):
that can be huge for a family.
Speaker 2 (33:40):
I think the data for the most part, unless you're
going to be maybe an engineer ora computer science or certain
majors where the payoff is goingto be meaningful, I think the
data doesn't really support thenotion of getting somebody who
has no money to get them in debt.
It's the only way we canpresent it to them, but it's a
(34:02):
difficult proposition.
I think the one areas I'vealways wondered is if you're a
first-generation college kid,could we at least not have them
get into debt on their firstyear in college?
Could you at least get one tryat it to see if you're going to
be good at it, if it's what youwant, if it's going to be
successful?
As Liz said, you get thesupport, you get the academic.
(34:22):
You take advantage of theopportunity before you get into
debt.
Only 34% of Americans have acollege degree.
We have millions of Americanswho started college but never
finished and never completed.
A graduate who a college gradwho is white comes out with
$24,000 in debt.
A college grad who's blackcomes out with $54,000 in debt.
(34:44):
It's very punitive.
It's like the less you have,the more debt you've got to take
on to finish the same degreethat somebody else that maybe
just happened to be a little bitmore wealthier than you are.
So I would argue, you know thatloans are a really a significant
hurdle, but we rely on themright now so heavily.
(35:07):
I mean we've we flipped thescript it used to be grants, now
it's loans, and we call it aninvestment, like you know, but
it really isn't.
Like there is no method thatshows that $60,000 culinary
program pays off in the longterm.
Like there is no data thatsupports that, but nevertheless
we monetized it.
So we call it an investmentversus, you know, calling it a
(35:30):
public service or a public good.
You're doing the right thing bytraining students so they can
contribute, do well andhopefully move out of poverty.
Let's wrap this up and I knowwe've been all over the place on
this one what are one or twothings that you would recommend
for students who really comefrom backgrounds that may not
(35:52):
have been to college or anybodyin their family been to college,
have limited resources?
What are the one or two thingsyou would recommend that they do
as they plan potentially goingto a post-secondary institution,
whatever that might look like?
Speaker 4 (36:08):
For me, it's about using those resources.
It's about encouraging them toask the questions, even to
Kristen's point, even when youmight think that you're the only
one asking that question oryou're scared of what that
judgment might be or what theanswer might be.
Ask it anyway.
Those are the things thatyou're not the only one in the
(36:29):
room, and even as anadministrator, sometimes those
student questions that they askare some of the things that help
me really rethink my process,right when I get a new question
that I've never been askedbefore, a situation that's come
up that I didn't realize was asituation that a student might
be experiencing, and soquestions are so good to
(36:51):
continue to iterate on ourprocesses and provide resources
to students, and so I wouldreally just encourage them to
kind of shift their mindset inasking those questions, but also
shift their mindset instead ofsaying like I can't or this is
(37:13):
not going to work, it's likewhat if it did?
And that really, I think, isthe game changer in situations,
because when you start to askthose questions and if you do it
, you put yourself out thereonce and it provides you with an
outcome that is positive thenyou continue to do that and I
think that's a life skill, notjust in the, you know,
(37:36):
navigating college and thefinancial aid process, but
shifting your mindset to believethat there's something else
possible and continuing to askthose questions.
And I think, just startingwhere you're at you know we all
are, you know bring our lifeexperiences to different
(37:57):
situations.
And so wherever you are rightnow, just starting there and
connecting with your circle orutilizing those resources that
are around you, your action isgoing to be important and you
know we had.
We can have dreams and thinkabout things and wish for things
all the time, but if we're nottaking those actionable steps to
(38:20):
say I'm going to commit to thisand I'm going to, I'm going to
ask this question, I'm going tomeet with this admissions person
, and just continuing to do that, those small little actions
really add up over time.
Small little actions really addup over time and I think that
those are the game changers.
(38:40):
It's not about navigating thebureaucracy or taking out a loan
or not taking out a loan.
It's changing your mindsetaround.
What does this do for you andyour future?
Because I do believe that acollege education or a specific
credential into a high demandfield can completely change the
trajectory of a person's life,and so if they can just shift
(39:05):
their mindset around it, even ifthey've never seen it before,
and lean into that process andcommit to it if that's what they
want, that is probably the bestadvice that I could give.
Speaker 2 (39:18):
Well, it's proven right Education is the only way
only proven way out of poverty.
There's really not too manyother shortcuts that are going
to be available for folks whoare trying to do better for
themselves, and thereforefamilies, and financial aid
plays such a key part of that.
It's one of the tools thatwould make post-secondary
vocational college whatever youwant to call it trade schools,
(39:40):
make that a reality andhopefully over time we will
continue to make it moreaccessible, more reasonable,
hopefully less demanding, andgive our students more
opportunities to go to schoolwithout having to come out of it
with massive amount of debt.
Speaker 1 (40:10):
Liz, thank you so much for your time here today.
Thanks for listening to Makethe Leap.
Be sure to visit our site,rosspodcastcom or the podcast
platform of your choice, tolisten to past episodes as well
as subscribe, so you never missa future episode.
We hope you join us two weeksfrom now for our next episode,
(40:33):
closing the Gap.
Millions Count on Free MedicalClinics.
See you then.
Welcome to Make the Leap, a podcast focused on the
many economic hurdles facingcollege students, lower income
individuals and those strivingto move up the social ladder.
I'm Brad Constant here withGeorge Graeb and Kristen Biel.
(00:32):
George, let's start with you.
What is our topic for today?
Speaker 2 (00:36):
All right, thank you, brad.
Our podcast for today dealswith issues in relationship to
financial aid and in issuesrelating to students with
limited income trying tonavigate the financial aid
process as they attempt to go tocollege or a post-secondary
institution.
I'm going to deal with it froma couple of points of views.
(00:56):
One is we'll talk throughtuition over time and the impact
of Pell, and then we'll talk alittle bit about the way the
model is set up right now, onhow punitive sometimes it can be
to students who have limitedincome.
Pell Grant, which is thefoundation of the financial aid
process, is at least.
(01:17):
We'll go back to the origins ofthe Pell Grant, which is the
foundation of the financial aidprocess, and then take that
through the years in comparisonto what tuition used to be and
what it is today.
I'm going to walk through threecomparisons.
We're going to talk about aleading public institution in
(01:38):
Michigan which is considered asthe number one public state
university.
We will talk about one that ismore of a private, nonprofit,
more liberal art institution,and then we'll use Ross also as
a mechanism to compare.
The Pell Grant has been aroundsince 1972.
It was part of a bill that wassponsored by Senator Pell and
(02:01):
therefore it's been called thePell Grant.
It's now 52, 53 years thatwe've had the Pell and therefore
it's been called the Pell Grant.
It's now 52, 53 years thatwe've had the Pell Grant.
If you went to college in 1972,the Pell Grant would have been
$500.
So the minimum you would havegotten would have been $50 and
the max you would have gottenwould have been $500.
So let's kind of take this incontext in terms of what was the
(02:24):
tuition then at a couple ofinstitutions and how the Pell
Grant would have played out forsomebody that is coming to a
school with limited resources.
The premise of the Pell Grantis that if your household income
is about 150% of the povertyline you will get the full Pell.
So in 1972, the poverty linewas roughly for a household of
(02:47):
one, roughly $4,500 for anannual income.
The Pell Grant looks at it moreon a household basis.
So if there's two or threepeople, obviously the amount of
annual income you would have andstill be considered poor would
be higher.
But if you were at 150% of thepoverty line in 1972, you would
have gotten 500 bucks in termsof Pell Grant.
(03:09):
The state university we're goingto use.
Their tuition in 1972 was $350per term.
So for a full year to go at theleading public state
institution in Michigan wouldhave cost you roughly $700.
So if you are poor, you qualifyfor the PAL.
Your out-of-pocket costs orpotentially covered by state
(03:32):
grants or other mechanism wouldhave been $200.
So if we move over to a privateschool also in the state of
Michigan, if we look at theirtuition in 1972, it was $2,600.
None of these numbers includeroom and board.
This is direct tuition, doesnot include fees, does not
(03:56):
include books, does not includesupplies.
This is simply direct tuition.
So that private institution was$2,600 to go to that school for
one academic year.
So let's fast forward to today.
So the Pell Grant has gone from$500 to $7,395.
(04:17):
So basically, over the last 52years, if you are poor and you
rely on the Pell Grant to go toschool, you will get $6,895 more
than you would versus somebodywho went there in 1972.
Now the argument sometimes willcome is the value of the dollar
in 1972 versus the value of thedollar today, and I will touch
(04:43):
on that here in a bit, but justto make my point.
So the Pell Grant's additionalmoney is $6,895.
That State University's tuitiontoday that was basically $700
per academic year is roughly alittle bit over $18,000.
So let's play the math If youare poor, if you are poor in 72,
(05:07):
your out-of-pocket cost isabout 200 bucks.
If you are poor today and youwant to go to the same
university, your out-of-pocketcost now is almost $10,000.
So I titled this podcast asPunishing the Poor.
So, as you could see, that $200shortage is now $10,000 per
(05:31):
academic year.
That is going to cost you to goto the same school Now if you
decide.
But I want to go to a privateschool, liberal arts school that
is also in Michigan.
Their tuition today, againwithout room and board, is
$41,500.
So the Pell Grant in 1972 wouldhave covered $500 of the $2,600
(05:55):
.
So their cost would have beenabout $2,100 out of pocket.
Today, if they decide to go tothe same school, it would cost
them almost $34,000 more peracademic year.
So the argument is what aboutthe purchasing, the value of the
dollar?
So to keep this into context,you could have gone to that same
(06:16):
university for four years inthe early days of the Pell Grant
for about $6,000 in total.
For about $6,000 in total, thepurchasing power of $6,000 in
1972 versus today is roughly$44,000 to $45,000.
It costs you almost.
You pay that much almost in onefull year, especially when you
(06:37):
add up the room and board versuswhat you would have had to do
in 1972.
In the 1970s it would not havebeen unheard of to have a
part-time job, work duringschool and pay for college
without having to go on intodebt or having to take out
student loans.
That option obviously does notexist anymore.
(06:57):
So that's the first part of thepodcast, which is how much
tuition has come versus how muchgrants are now available to the
student.
In the late 1970s, early 1980s,universities began to expand.
They began to expand locations.
They began to add buildings,buy land.
They become incredibly moreexpensive.
(07:19):
The dorms some of them becamemore of a state of the art, and
that has continued over time.
Dorms Some of them became moreof a state of the art, and that
has continued over time.
Athletic programs are beingadded and the notion was and
still is in many of theseinstitutions.
They called it kind of the newfinancial aid model for poor
students is high cost, highfinancial aid.
The argument was being madethat if you charge a lot, then
(07:42):
you could use the money that youget from the student that can
afford to pay to finance thestudents who cannot pay.
So basically, if you get a cashpay for an $18,000 or somebody
mom or dad are going to write acheck they're going to be able
to subsidize a student that maynot be able to afford to go to
(08:03):
that school.
That argument has been reallydifficult to see today, just
because the financial aid amountdid not increase.
So, even though in concept youcould make the argument, if more
people pay into the system,some of that money can be used
to help students who come fromlimited resources.
But as you can see with bothexamples the cost for somebody
(08:26):
with limited income or livingaround a poverty line that model
no longer works.
And then there's a second pieceto why that model no longer
works.
The pressure to recruit thestudents who can pay is so high
that universities and maybe notas much in the public sector,
but definitely the privateschools have introduced a whole
(08:47):
new concept which is calleddiscounting.
So they are competing so hardfor the student that can afford
to pay, that does not need theneed-based grants or the
need-based funding, that nowthey are basically for lack of a
better word, and this is myterm but they are discounting
their tuition.
The discounting rate at privatenonprofit is almost 56%, so
(09:12):
that's how fierce thecompetition is for the student
that can afford to go to school.
So the model of high tuition,high financial aid, is really
not even doable anymore becausethe schools have abandoned it as
they try to chase additionaldollars from the student that
can pay.
So on the podcast today we willwalk through some elements of
(09:36):
this in terms of what thestudents can do, what are the
things that are available tothem, but also to really present
that the financial aid processthat was built in 1972 is really
no longer feasible and is nolonger helpful to students who
have limited income.
It's becoming even moredifficult to go to school today
(10:00):
versus even back in 1972.
So to be fair in that process.
So let's talk a little bit aboutRoss, and I've been here for a
little over 13 years.
When I started at Ross, thePell Grant was $5,500.
Ross's tuition was $14,950.
(10:21):
13 years later, the tuition forRoss is $15,950.
So we raised the tuition by$1,000.
On the flip side of that, thePell Grant has increased by
$1,850.
So to attend Ross 13 years agoversus today, our current
(10:42):
students will borrow almost$1,000 less 13 years later than
students in 1972.
That's really ultimately howfinancial aid needs to work.
It needs to continue to makeattending college, attending
post-secondary, attending aschool more reasonable within
(11:02):
the resources that the studentshave.
Student loans are becoming sucha big piece of financial aid
and it's hard for, I think, ifyou're not in the industry or
you don't work in higher ed.
It's hard sometimes to graspthe challenge that our students
go through.
72% of all undergraduates needfinancial aid, some type of
(11:24):
financial aid, whether it'sinstitutional, whether it's
state or whether it's federal,and loans now play a much bigger
role than grants In most cases.
Difficult proposition to askstudents to go and take on loans
to go to school knowing thatthey ultimately need the skills,
(11:52):
they need, the training to geton to the next chapter in their
life and whatever that careermay be.
But the road now that wassupposed to be driven by grants,
by ability to pay for it, maybethrough work, study, through
taking another job, is nowtotally dependent on how much
loans you have to take or youare willing to take.
Speaker 1 (12:14):
Thanks, George.
This is going to be a greatepisode.
There is so much to talk aboutregarding financial aid, loans
and all that stuff, but it'stime to meet our guests Kristen,
who do we have the pleasure ofchatting with today?
Speaker 3 (12:28):
Well, we are lucky to be joined by Ross's Liz Lee.
Liz has been the Director ofFinancial Aid at Ross for nearly
three years now.
She earned her bachelor'sdegree in business from
Davenport University, followedby two master's earned at Grand
Valley in education and schoolcounseling.
Throughout her career, liz hasbeen a school counselor, held
(12:51):
multiple financial roles,overseen student services
departments and even has her ownconsulting practice.
She's also a current boardmember for the Ross College
Foundation.
Regardless of the role, lizstrives to help students and
colleagues step into the bestversion of themselves.
Liz, thanks for joining ustoday.
Speaker 4 (13:13):
Good afternoon.
Thanks, Kristen.
I'm really thrilled to be here.
This is not a light topic, butI'm really excited to dive in
with y'all.
Speaker 2 (13:22):
You begin about the financial aid process, both in
terms of setup in terms ofaccess.
Many of our students tend to bepromised a system that they can
access easily.
Many of our students are lowincome.
Sometimes they lack theresources, they lack the
technology.
The process seems incrediblydifficult, so the question is
(13:43):
why is it so hard?
The process seems incrediblydifficult, so the question is
why is it so hard?
And as we continue to rely ontechnology, is that a help or a
hindrance to their ability toaccess financial aid?
Speaker 4 (13:53):
Yeah, it's an interesting question and a
loaded question.
I don't really pretend to knowall of the different parts that
come into play in terms of, youknow, the government has
negotiated rulemaking when wemake decisions about the
financial aid process or justthe bureaucratic process in
general commonalities over theyears as it relates to some of
(14:19):
those barriers and justaccessing financial aid in
general.
I think the first one is justthat college educated people are
really the ones making thesedecisions.
They've already navigated theprocess.
They're used to a lot ofassumptions that people can just
do that I don't think are avery common thing for
(14:41):
underrepresented groups orlow-income families.
So, like an example of thatmight be, I file my taxes every
year.
I understand that there aredifferent parts of my life with
different application processesthat might require me to access
those taxes right.
So I know that I have to followthe IRS guidelines.
I know what those deadlines arebecause my family has always
(15:05):
done that.
They've modeled that, theyteach me how to do that, and so
I keep a copy of those records.
I, like I said, file on timeyear over year.
I know where they're at, I keepthem in the same spot and so
it's easy for me.
That's not a burden for me Ifsomebody says Liz, I need a copy
of your taxes from 2021.
And so I think, like there's alot of assumptions in that that
(15:28):
students and families do thatsame thing, and I think that is
one of the big barriers.
As you can imagine, with theFAFSA and the financial aid
process, taxes are a huge partof that process and so if
there's something in flux withtheir taxes, or they didn't
understand that, or they justeven don't, they're not
(15:49):
organized to realize they needit again after it's done, that
in and of itself can be abarrier.
That's a good example.
When I say there'scommonalities that I think are
just assumed and it's a big dealthen for a lot of families
because a lot of complexity cancome into that.
Speaker 2 (16:08):
As we think of financial aid.
Sometimes we focus on FAFSAright, but there are a lot more
components to it.
Fafsa is one part.
Institutional grant is anotherpart.
State grants is another part.
You know different resourcesthat are available.
The process seems to be fixatedon kind of the traditional
environment where parents andkids work together on completing
(16:30):
a FAFSA and you talk aboutfinding the taxes, finding the
resources.
Sometimes our students don'treally that, may potentially be
a dependent student, but havereally no access to their
parents or have no access totheir taxes.
The government sometimes mayeven know more about their
parents than they do.
Many of our students live inwhat I would call
(16:51):
intergenerational poverty.
It just seems that the processis incredibly difficult.
It's like you have to provethat you are poor.
It's not enough that you arepoor, but you also got to come
up with a way to prove beyondreasonable doubt that you are
poor.
I mean, you do this day in andday out and you probably see
different scenarios of wherestudents have a tough time
(17:15):
getting what they need to getthe financial aid that they're
absolutely eligible for.
You know why do you think we dothis?
Speaker 4 (17:23):
Yeah, george, actually I think that's a huge
part of it.
So I started working infinancial aid in 2006.
And I worked in financial aidfor about 10 years and then I
went off and I did some otherthings and when I came back to
financial aid I said I only aminterested in this role if I can
bring back the people side ofthe process.
(17:45):
And what I meant by that wasthat these are the things that
you see a lot of times infinancial aid offices where
we're so fixated on.
This is the rule, this is theblack and white process, and so
we have to make the student dothis.
We have to do X, y and Z andactually the government and the
(18:09):
rules that are around that.
There's a lot of financial aidthat we call it professional
judgment.
As an aid administrator, ifyou're trained and you know the
regulations, you know where youdo have to, you know draw the
line to say, okay, I understandthis can be a challenge, but you
know I'll walk with you throughthat.
(18:30):
But then there are other timesthat you can exercise that
professional judgment to say,you know, we're really splitting
hairs here.
Or even if I make the studentgather all of this documentation
, it doesn't change what theiraid eligibility is.
So the government actuallygives us that exercise to be
(18:50):
able to do that.
And that's really what I focus alot of my time on with the team
is understanding deeply thereason why we're asking for
something and always connectingit back to the regulation,
because that allows us to serveour students better.
And I think, the more that youcan equip financial aid offices
to think more holistically likethat and not just setting out a
(19:14):
process and saying follow thisprocess because you have to.
And I will say I think thatover the years I don't have a
specific, you know, data metric,but I do think that there's
been a lot of evolution in termsof the work that we're doing,
especially here at Ross, withstudents who we can remove those
(19:34):
barriers to go back and askokay, why are we asking for this
?
Does it change aid eligibilityor are we just making them jump
through another hoop?
Speaker 3 (19:44):
Yesterday's training and admissions was focusing on
helping students overcomeobstacles before enrollment and
after enrollment, and, of course, financial considerations is
one that we work with studentson.
However, about 10 minutes of ourdiscussion yesterday focused on
the social pressures that mightbe exerted upon students to not
(20:10):
disclose that they are afraidor not, let you know that
they're not prepared or not, letyou know that they don't know
how to do something, and ourfocus in admissions was to say,
hey, just because someoneenrolls does not mean your job
is done.
This is just the beginning ofassisting them to get to
(20:30):
graduation ultimately and youhad touched on something that
really resonated with me andthat was talking about modeling
the behavior that you hadwitnessed, that behavior perhaps
from your family, and so we'reencouraging that in admissions
now to do the same.
Is that something that thecollaboration between financial
(20:52):
aid and admissions can benefitthe student?
By kind of looking at thepressures that someone might be
feeling and put ourselves intheir shoes and say, okay, we're
going to have to approach maybethat hard conversation in a
different way.
Yeah, what are your thoughts onthat?
Speaker 4 (21:10):
I'm really thinking two things come to mind, which
is the collaboration and thetechnology piece.
And so I mean, especially hereat Ross, we work really closely
with our admissions team on adaily basis.
We have constant communication.
It's not like working onprojects or different things
that are coming up in terms ofoverall, like organizational
goals.
We are working on studenttopics.
(21:34):
But I think the technology is apart of the solution, because
there are a lot of students whodon't need our help, right, they
need resources, they need shortvideos, they need, you know,
reminders.
But you can build thetechnology to offer those
students those pieces so thatthey can navigate the process
and, honestly, our students wantthat.
(21:55):
They're used to doing thingswhen they want to do it on their
phones at night, at aconvenient time for them, and
they can navigate it a lot ofthe time.
But you have another group ofstudents who really need more of
that hand-holding, and so if wecan leverage technology to be
(22:16):
able to assist and, you know,kind of move students through
that are a little bit moreself-paced and self-directed,
they can do that and they feelcomfortable with that, engaged
right.
How do we personally connectwith them?
How do we identify key dataelements that we know are the
(22:41):
barriers and specifically reachout to the right group of
students so that they're notmissed.
I think that's usually whathappens in, you know, a large
system is that students getmissed, they get lost in the
shuffle.
But that is where we can reallyutilize technology and the
advances to be able to identifythose students.
(23:04):
Pretty clearly.
We've got some good data pointsright.
We know the students thatstruggle.
We know answers to questions onapplications or FAFSA that are
good indicators for us that thatstudent is going to need a
little bit more support and wecan put them into different
groups and have people that arespecialized in that piece of it
(23:26):
to really help those students.
Then the student experience, Imean, in my opinion, goes up a
million percent because theyfeel like we see them, we hear
them, because they feel like wesee them, we hear them and we're
there to support them.
Speaker 1 (23:45):
We've mentioned FAFSA .
That's the Free Application forFederal Student Aid.
It's been in the news a lotlately Delays, mistakes,
reprocessing we could spend awhole episode talking about just
that.
The form is so many questions.
If it could be reduced down, itcould fit on a postcard, to use
George's terms.
If the IRS is alreadycollecting all of this income
information through taxes,through other things like, what
do they really need?
Speaker 4 (24:07):
Yeah, it's a great question and I'm glad that we
brought it up because I feellike I have an unpopular opinion
about it because there's beenso much negativity in the media,
even with financial aid offices, with the National Association.
I mean, I have a tendency toalways reframe to the positive.
(24:29):
It's just how I survive life,but I don't think things are.
I think it's been a hugeoverhaul right and with that
comes a lot of things we didn'tanticipate and things that the
government didn't anticipate,and technology barriers, just
like I was just saying out ofyou know, one side of my mouth.
Technology can be the answer,but if it's not done well and
(24:51):
you don't take the time andreally troubleshoot and build
out all of those differentscenarios to George's point,
like if you don't know who youraudience is, you don't know who
those students are and how theycould experience that, or you
know, have it on the user endthen there's bound to be errors
and delays and that's reallywhat we're experiencing right
(25:13):
now.
Is that just maybe that thewhole scope of the work maybe
wasn't fully there, but for thestudents who have done the FAFSA
for 24-25 and it's worked.
I know that's not been all thescenarios, there has been a ton
of feedback.
This is where I say it's anunpopular opinion, that it truly
(25:35):
is simplified.
So the idea of this overhaulwas called FASTA simplification
right, and it really did takethe 100 questions off of the
FASTA that it's been done forhow many ever years?
Down to about 35 questions.
So that in and of itself is anadjustment right.
It is a streamlined, moreefficient way to gather that
(25:58):
information.
Speaker 3 (26:00):
Filling out college applications, which one might
think would have become easierin the digital age, has become
time consuming, and studentsapply to more colleges now, and
elite colleges now even try todistinguish themselves with
essay requirements, for example.
They have multiple deadlinesand different types of
admissions, including earlyaction early decision one, early
(26:25):
decision two.
What are your thoughts, liz?
Does that defeat the FAFSAsimplification idea?
Speaker 4 (26:32):
Fascinating question, kristen.
I'm actually so bear with mehere.
A second, because several yearsago I read a study that was
talking about flavors of icecream and basically the outcome
your brain is wired that theless choices you have, the more
satisfied you are.
So if I have three choiceschocolate, strawberry and
(26:52):
vanilla I choose one of those.
I'm happy because I pretty muchknow I don't like chocolate or
vanilla.
Like I'm going to be happy withmy strawberry, but I have 99
flavors.
Odds are, after I choosewhatever flavor, I choose cookie
dough I'm going to feel like,hmm, did I make the right
(27:12):
decision?
And so I think some of thatcomes into play when there's so
many options.
Now I think about that withstudents and, like you said, I
have a little consulting piecethat I do and I help students
navigate this process, mostlyjust because I like to work with
students and it is.
It's really overwhelming andthere are so many good choices
(27:35):
in terms of trade school options, community college,
professional tracks or even likedirect workforce, and I think
they're all great options foreach individual.
Right, you have to make thatdecision as an individual, but
what students are doing, too isthey're looking at YouTube and
TikToks and all of these likelife hacks that are giving them
(28:00):
the answers to how they navigatethis process, and what they
should really be doing istalking to trusted people that
are in their circle circlethat's my opinion on it because
there's so many resources,whether that's your school
teacher or your school counselor, or you know college that you
(28:20):
visited that you just feltreally at home at, or you know a
trade school or somebody that'sin that field, maybe
electrician or medical assistant, like whatever that is.
You're talking to those peoplethat are in your circle to
really break down the rest ofthe noise, because it is a lot.
But once you can make thatdecision for yourself, then you
(28:43):
can navigate that process, Ithink, a little bit easier, and
even in financial aid officesthat's what I encourage my team
to do is be that trustedresource.
That's why we partner withadmissions.
Sometimes those admissions repsare a trusted resource for that
person because they've gottento know them through the
enrollment process and so theycan help connect that student to
(29:04):
what's going to be the bestoption for you at this school.
Speaker 2 (29:10):
So one part of financial aid Liz now is student
loans.
You know I highlighted as goingback to the original the Pell
Grant.
The majority of financial aidLiz now is student loans.
I highlight it as going back tothe original the Pell Grant.
The majority of financial aidused to be grants.
80% of all your financial aidused to be grants.
Today it's almost 60% of it isloans.
We rely heavily on loans, nowmore than ever, to have kids go
to school, especially kids thathave very limited resources and
(29:33):
no money at all.
How did we get here?
Speaker 4 (29:36):
Well, that's a good question.
I mean I don't know that I havethe answer to that.
Costs change over the years butinstitutions have also grown
and tuition charges atinstitutions have far surpassed
what standard inflation is.
But the Department of Ed can'tkeep up with it on the funding
(30:00):
side and families can't keep upwith it.
So it's almost like it's goingback to how it was when higher
ed was originally started, whereit was only for the elite.
There's been questions around.
Will that start to come backwhere our schools, but also to
move?
Speaker 3 (30:38):
them forward in economic status after they
graduate?
I wonder to myself I've seendata, but I don't have it at my
hand, about cultures and theirperception of loans, for example
.
And what about low-incomefamilies specifically?
Are you familiar with anyinformation that talks about
(31:00):
their willingness to take outloans or what the effect is on
those low-income families whoare forced to do that to take
more loans out?
Speaker 4 (31:11):
I think it really goes both ways and even for
myself personally, I was a firstcollege, first generation
college student and my mom'smessage was just you have to get
an education and whatever ittakes to get there, you kind of
worry about it later, and sosome of that is just that
(31:34):
blindly.
You know signing the forms, youknow filling out promissory
notes for the government andbecause you never exchange hands
, you know what I mean.
Like the government doesn'tgive the student that money and
then the student pays their bill, just happens all in the
backend process and so you don'tmake as many connections there
(31:56):
that like, oh, this is actuallynot money, that was free, but
that financial aid also includesloans, and so there's confusion
there after they graduate tosay, wait, no, I got financial
aid, what do you mean?
I owe this back Because of thatapproach.
I just have to get thiseducation to get out of my
current situation and I'll worryabout it later type thing.
(32:19):
And for me that worked out, youknow and I, but I don't think in
every situation is it as assuccessful, because you really
do have to understand whatyou're committing to.
But I think on the flip side ofthat, it's also a barrier where
they just say no to loansaltogether and they're not
really thinking about the factthat there are schools that you
(32:42):
can go to, that you're takingout minimal loans.
They just shut down the wholeidea of college because they
just say I can't afford it,without fully knowing, without
fully doing the research orapplying to multiple different
schools, that the aid might lookdifferent.
Aid can look very different atdifferent institutions.
Speaker 3 (33:03):
Do you think that those loans and that subsequent
debt affects low-income familiesin a disproportionate way?
Speaker 4 (33:12):
Yeah, I think, because when you're yes, I do
think it does because thethere's so much less room for
buffer right when you're, whenyou have a low income budget,
that income is fixed right.
Like you, you don't have a lotof room.
Even if it's a it's an extra$50 a month or a100 payment,
(33:36):
that can be huge for a family.
Speaker 2 (33:40):
I think the data for the most part, unless you're
going to be maybe an engineer ora computer science or certain
majors where the payoff is goingto be meaningful, I think the
data doesn't really support thenotion of getting somebody who
has no money to get them in debt.
It's the only way we canpresent it to them, but it's a
(34:02):
difficult proposition.
I think the one areas I'vealways wondered is if you're a
first-generation college kid,could we at least not have them
get into debt on their firstyear in college?
Could you at least get one tryat it to see if you're going to
be good at it, if it's what youwant, if it's going to be
successful?
As Liz said, you get thesupport, you get the academic.
(34:22):
You take advantage of theopportunity before you get into
debt.
Only 34% of Americans have acollege degree.
We have millions of Americanswho started college but never
finished and never completed.
A graduate who a college gradwho is white comes out with
$24,000 in debt.
A college grad who's blackcomes out with $54,000 in debt.
(34:44):
It's very punitive.
It's like the less you have,the more debt you've got to take
on to finish the same degreethat somebody else that maybe
just happened to be a little bitmore wealthier than you are.
So I would argue, you know thatloans are a really a significant
hurdle, but we rely on themright now so heavily.
(35:07):
I mean we've we flipped thescript it used to be grants, now
it's loans, and we call it aninvestment, like you know, but
it really isn't.
Like there is no method thatshows that $60,000 culinary
program pays off in the longterm.
Like there is no data thatsupports that, but nevertheless
we monetized it.
So we call it an investmentversus, you know, calling it a
(35:30):
public service or a public good.
You're doing the right thing bytraining students so they can
contribute, do well andhopefully move out of poverty.
Let's wrap this up and I knowwe've been all over the place on
this one what are one or twothings that you would recommend
for students who really comefrom backgrounds that may not
(35:52):
have been to college or anybodyin their family been to college,
have limited resources?
What are the one or two thingsyou would recommend that they do
as they plan potentially goingto a post-secondary institution,
whatever that might look like?
Speaker 4 (36:08):
For me, it's about using those resources.
It's about encouraging them toask the questions, even to
Kristen's point, even when youmight think that you're the only
one asking that question oryou're scared of what that
judgment might be or what theanswer might be.
Ask it anyway.
Those are the things thatyou're not the only one in the
(36:29):
room, and even as anadministrator, sometimes those
student questions that they askare some of the things that help
me really rethink my process,right when I get a new question
that I've never been askedbefore, a situation that's come
up that I didn't realize was asituation that a student might
be experiencing, and soquestions are so good to
(36:51):
continue to iterate on ourprocesses and provide resources
to students, and so I wouldreally just encourage them to
kind of shift their mindset inasking those questions, but also
shift their mindset instead ofsaying like I can't or this is
(37:13):
not going to work, it's likewhat if it did?
And that really, I think, isthe game changer in situations,
because when you start to askthose questions and if you do it
, you put yourself out thereonce and it provides you with an
outcome that is positive thenyou continue to do that and I
think that's a life skill, notjust in the, you know,
(37:36):
navigating college and thefinancial aid process, but
shifting your mindset to believethat there's something else
possible and continuing to askthose questions.
And I think, just startingwhere you're at you know we all
are, you know bring our lifeexperiences to different
(37:57):
situations.
And so wherever you are rightnow, just starting there and
connecting with your circle orutilizing those resources that
are around you, your action isgoing to be important and you
know we had.
We can have dreams and thinkabout things and wish for things
all the time, but if we're nottaking those actionable steps to
(38:20):
say I'm going to commit to thisand I'm going to, I'm going to
ask this question, I'm going tomeet with this admissions person
, and just continuing to do that, those small little actions
really add up over time.
Small little actions really addup over time and I think that
those are the game changers.
(38:40):
It's not about navigating thebureaucracy or taking out a loan
or not taking out a loan.
It's changing your mindsetaround.
What does this do for you andyour future?
Because I do believe that acollege education or a specific
credential into a high demandfield can completely change the
trajectory of a person's life,and so if they can just shift
(39:05):
their mindset around it, even ifthey've never seen it before,
and lean into that process andcommit to it if that's what they
want, that is probably the bestadvice that I could give.
Speaker 2 (39:18):
Well, it's proven right Education is the only way
only proven way out of poverty.
There's really not too manyother shortcuts that are going
to be available for folks whoare trying to do better for
themselves, and thereforefamilies, and financial aid
plays such a key part of that.
It's one of the tools thatwould make post-secondary
vocational college whatever youwant to call it trade schools,
(39:40):
make that a reality andhopefully over time we will
continue to make it moreaccessible, more reasonable,
hopefully less demanding, andgive our students more
opportunities to go to schoolwithout having to come out of it
with massive amount of debt.
Speaker 1 (40:10):
Liz, thank you so much for your time here today.
Thanks for listening to Makethe Leap.
Be sure to visit our site,rosspodcastcom or the podcast
platform of your choice, tolisten to past episodes as well
as subscribe, so you never missa future episode.
We hope you join us two weeksfrom now for our next episode,
(40:33):
closing the Gap.
Millions Count on Free MedicalClinics.
See you then.
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