Paul on February 17th, 2015

mortimer snerdUsing any standard of rational thinking, the college financial aid system in 2015 is right up there with the most ridiculous creations known to humanity.  For now, we won’t even discuss the colossal folly of the $1.1+ Trillion in outstanding student loan debt so let me begin to count some other indicators of stupidity in the ascendant:

1.     The FAFSA  (Free Application for Federal Student Aid) is completed to determine something called the EFC (Expected Family Contribution).  Once upon a time the EFC represented the dollar amount a family would be expected to pay for one year of college.  That isn’t what it means in 2015.  Today it is described as “…not (the U.S. Department of Education’s bold font) a dollar amount but rather, a number that is used to calculate eligibility for federal financial aid.”  Since the EFC is no longer a dollar amount what is it?  What does the “number” mean?  No one knows and because of that no reasonable family can determine whether they receive sufficient financial aid now that colleges can simply say the EFC is just an undefined number.  It is like being arrested for speeding even though you were well below the posted speed limit.  But when you politely challenged the arresting officer by claiming that you had not exceeded the limit, he responded, “Oh that’s just a number not an actual miles-per-hour speed.”  When numbers don’t mean anything, neither does the system.

2.    Since the U.S. Department of Education’s definition declares that the EFC somehow “determines eligibility for federal aid”, there apparently is no compulsion for either the state or the campus to honor any need-based gaps that may remain after the federal aid is “maxed” out.  Thus the EFC as a number fades away as a relevant factor to be ultimately replaced by the real dollars families have to pony up because of the utterly unreliable, ill-defined and badly-policed system of need-based aid.  At the end of the day, a family with an EFC of 30000 (which apparently means nothing) and an adjusted gross income of just over $100,000 might have to spend a real $46,000 at a $60,000 per year college or an amount (using the government’s own formula) appropriate for a family making in excess of $160,000 if the EFC actually meant something like hard dollars.

3.    Because of the denial of a known, definitive standard of financial need, along with a zero compulsion or statutory requirement for colleges to fill the entire demonstrated need of families, they don’t.  More often than not this results in colleges with lower price tags but fewer campus-based financial resources to be more expensive than very high-end colleges who have enough money to fill the entire demonstrated need of its students.  For needy students across the board, Stanford, Harvard and a few other financially elite colleges are likely to cost a lot less than state colleges and other low-sticker-priced schools.  The latter group is often filled beyond capacity with bargain-seeking students, a condition that typically is manifested in large gaps or shortfalls in their financial aid packages along with a fifth or sixth year needed to get all of the required courses for a specific major.  It is neither unusual nor unexpected that a four-year degree from a state college or university could cost significantly more than a degree from a financially secure college or university particularly if one folds “opportunity costs” into the already toxic mixture.  That’s what happens when a program is created and administered devoid of any standard or measure of accountability for the providers of the benefits.

4.    The crowning evidence that the so-called college financial aid system was created and is now managed by people inhabiting a kind of parallel universe is that the wording of both the FAFSA and the absurd, privacy-invading CSS Profile expect the STUDENT to complete the financial aid form as though it is the student and not the parent who actually pays for college.  Imagine your student grappling with this question as written on the FAFSA:  OK, kiddies….“enter the amounts for your parents’ IRA deductions and payments to self-employed SEP, SIMPLE, Keogh and other qualified plans from IRS Form 1040-line 28 + line 32 or 1040A-line 17.”  Or, how about this one boys and girls?  Enter “Other untaxed income not reported in items 94a through 94h, such as workers’ compensation disability, etc.  Also include the untaxed portions of health savings accounts from IRS Form 1040-line 25. Don’t Include extended foster care benefits, student aid, earned income credit, additional child tax credit, welfare payments, untaxed social security benefits, Supplemental Security Income, Workforce Investment Act educational benefits, on-base military training or a military housing allowance, combat pay, benefits from flexible spending arrangements (e.g., cafeteria plans), foreign income exclusion or credit for federal tax on special fuels.”  And we scratch our heads and wonder why more low income families fail to apply for financial aid.

The sad thing is that while this piece sounds like there are legions of villains out there that conclusion would be both a mistake and unfair.  There are a few villains but there are lots of victims.  Our colleges, our kids, our families, and our economy are all casualties of a tragically outdated and underfunded paradigm for college financial aid.  The real bad guys are now just starting to appear in the form of leaders who either fail to take note of the mess and/or if they do they elect to do nothing to create something better and more in concert with the economy, the economic challenges facing colleges and the realities confronted by hard-working, ordinary Americans across the political and economic spectra.  After all, people created the model and thus people can change it if they choose to do so. The emerging, growing cadre of  bad guys are those in a position to create change but who elect for whatever reason not to act. They are the willful violators of a sacred public trust.  We might also add to the list of “perps”, the astonishing number of us who know the system’s shortfalls and who have not spoken out in ways to motivate our elected and appointed officials to treat college financial aid reform as a national imperative.  After all, an educated citizenry is and always will be the life blood of any functioning democracy.   It is that old definition of sound that haunts us today.  If a tree falls in a forest and nobody hears it was there a sound?  Similarly, if no one voices outrage over the pathetic construct we call college financial aid then there is no apparent reason to change it.  Our inexplicable silence as a citizenry is part of the problem.

Meanwhile, we watch our leaders chatting about student loan interest rates or free community colleges.  Both discussions have no direct bearing on the real issue.  They just provide a fleeting, diversionary illusion of purposeful activity.  If you are in search of real courage in the face of bad odds, it should be noted that college financial aid administrators and their staffs across this nation are card-carrying members of a pantheon of heroes.  They are asked to deal with a system not of their own making and they, more than anyone, have to bear the scars of battle much like well-meaning, patriotic, boots-on-the-ground GI’s engaged in a painful, unpopular and costly twilight struggle.  Their parent organization, NASFAA (National Association of Student College Financial Aid Administrators) is one of the best and most supportive professional groups on the planet.  Yet they too have been reluctant to serve as voices of reform even though their constituency more than anyone knows first-hand the existing problems with the current state of the financial aid system.  That reluctance is probably caused by fear of job loss for their membership if there is a major change.  In this somewhat tenuous economy, such fears are understandable but their lack of meaningful engagement is not pardonable.

So we are where we are….trying to be the good shepherds of a fatally-flawed and endlessly damaging system that has all sorts of creative, visionary solutions but neither the human will nor courage to pursue any of them.  Just making it easier to apply for aid is not a cure when the delivery system is so vague, unreliable and unenforceable.  At some point we will have to answer to history when it stands in judgement of our generation.  In the look-back assessment of how we managed the way we paid for higher education, the conclusion is not likely to be flattering.

The suggestion that stupidity is the root cause of the folly of financial aid may sound harsh and certainly judgmental.  But there is a built-in innocence about it.  To claim that the current state of college financial aid was the product of anything else, implies deliberate intent which is a far more pointed accusation, one that includes careful planning and poor judgement and their bedfellows, malfeasance and culpability.  So we’ll let it go at innocent stupidity, a common, universal condition that all of us have to deal with from time to time.

Whenever I hear an often self-serving educator, legislator or functionary in the U.S. Department of Education proudly extol the virtues of our system of college financial aid, I am tempted to paraphrase a remark attributed by some to the late Molly Ivins in reference to a certain former Texas governor on his way to higher office:  “When ignorance rises to $40 a barrel, I want drilling rights to that person’s head!”


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