Friday, April 12, 2024

GAO REPORT: Financial Aid Packages Deceive College Kids

Federal law does not require that college officials present clear and standard information in all their financial aid offers to prospective students, and that needs to change.

This is according to a report that members of the federal Government Accountability Office (GAO) published this month.

Congress, the GAO members wrote, must intervene.

“The ways colleges present cost and aid information in their financial aid offers vary,” according to the GAO.

“That makes it difficult for students to compare offers and assess college affordability.”

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Many colleges, GAO members went on to say, “exclude key costs and factor in loans that must be repaid.”

“Doing this makes a college appear less expensive than it is,” the GAO said.

According to best practices, colleges should estimate the net price—how much a student will pay to attend that college—by deducting only grants and scholarships from all key costs like tuition, books, housing, and meals, according to the GAO report.

Among the GAO’s other findings:

• An estimated 91 percent of colleges do not include or understate the net price in their aid offers.

• An estimated 41 percent of colleges do not include a net price.

• An estimated 50 percent of colleges understate the net price. 

• Nearly two-thirds of colleges follow half or fewer of the 10 best practices.

“Although a recent law requires colleges to provide standard financial aid information to certain student veterans, the lack of financial aid offer requirements could lead other students to make uninformed and costly decisions, such as enrolling in an unaffordable college,” the GAO report said.

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“Further congressional action would be necessary to ensure that all students receive the information they need in their financial aid offers to make informed education and financial choices.”

In compiling this report, GAO staff reviewed financial aid offers “from a nationally representative sample of colleges.”

The U.S. Department of Education, according to the GAO report, disbursed nearly $112 billion in financial aid to students through various grant and loan programs in fiscal year 2021.

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