3 new college finance studies point to 1 conclusion
If you’re like me (and you probably aren’t), you wake up every morning and scour the internet for fresh studies on college financing. Lately, I’ve felt like a kid in a bursar’s office: So many juicy stats and surveys! So many hotly anticipated annual reports!
Three of my favorite new studies—while coming from different angles and institutions—point to one conclusion (and a favorite talking point of mine): Fill out the FAFSA.
Let’s begin with the College Board, the same nonprofit organization that brought you the SAT. (Um…thanks?) It also conducts tons of sometimes-fascinating research on trends in higher education. Its latest annual blast of research, Trends in College Pricing, found something curious: After a decade of steady—and frankly scary—increases, the net price of college (that’s the amount people actually pay) has pretty much flatlined or, in the case of public four-year schools, declined ever so slightly. The reason? Institutions are giving away more in grants—money students don’t have to pay back.
The results square nicely with what Sallie Mae and Ipsos learned in their latest iteration of How America Pays for College. After a decade conducting this detailed study of college financing, the statisticians mixed things up a bit for 2018 by conducting surveys entirely online. That change in mode might account for some of the shifts from last year. But one observation rings true: More students are relying on grants and scholarships. And the bulk of that free money is coming from the colleges and universities themselves.
I’m puzzled, then, why fewer families are completing the Free Application for Federal Student Aid (FAFSA), the long—many would say grueling—form you need to fill out to qualify for low-cost federal student loans, work-study, and—wait for it—grants and scholarships. Sallie Mae found a drop in FAFSA filing of 11 percentage points compared to the previous year. My advice: If institutions are trying to take the edge off tuition by offering more free money—for FAFSA’s sake—apply for it by filling out the form!
Which brings me to the final report in this college finance trifecta: a new analysis from NerdWallet, giving us the depressing finding that way too many students are turning up their noses at all this free money. About 661,000 high school grads who qualified for Pell Grants didn’t get them. Why? Because (all together now) they didn’t fill out the FAFSA. Let’s break this down in dollars: On average, each of these students could have received $3,908 in Pell Grants. It takes about three hours to complete the FAFSA. That’s about $1,300 per hour for filling in blanks.
I don’t need a fancy finance study to tell me that it doesn’t matter what you major in, you’ll probably never get paid that much money for a few hours’ work.