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Why the Student Loan Shopping Sheet Doesn’t Help Much

Posted on Jun 13, 2012 - 06:00 AM | Financial Aid | Comments (0)

Last week, the White House and college presidents finally agreed on a proposal President Obama put forth last February – to create a student “shopping sheet” that will make financial aid offers easier to understand.

The problem is that it really doesn’t make college any more affordable. It just lets you realize how deep in debt you’re going to be.

How the Shopping Sheet Works

The shopping sheet goes into effect next spring for the 2013-14 school year. Its provisions mandate that colleges:

· Use standardized financial aid terms.

· Clearly state a student’s total cost of college after grants and scholarships are awarded.

· Provide an estimate of a student’s monthly loan payments after graduation.

Problems with the Student Shopping Sheet

No college-cost estimate. It might explain your net cost before you accept a college’s financial aid offer, but it doesn’t help you know if you can afford the college before you apply. You could invest tremendous effort into impressing a college only to find you still can’t pay for it. Get accurate college cost estimates before you apply.
No financial aid plan. Knowing what you’re likely to pay in student loans every month isn’t the same as reducing or eliminating them. That takes careful planning. You must maximize your need-based and merit-based aid in order to reduce your dependency on student loans.
Standardized terms aren’t all you need to know. Even standardized terms on the shopping sheet don’t mean you won’t encounter unfamiliar terms or phrases while talking with admissions or financial aid officers. There are dozens of buzzwords used in this process that won’t appear on the shopping sheet, but you’ll still need to know them.
Doesn’t change gapping. The average student owes $12,000 after financial aid is awarded. The shopping sheet may clearly delineate what you owe in addition to your expected family contribution (EFC), but it doesn’t end the common practice of “gapping.” Not by a long shot. To get more aid, you might need to conduct a proper appeal.
Doesn’t create an appeals letter. Understanding your offer is not the same as appealing for more financial aid or building a case to defend your position. The shopping sheet merely provides a conclusion without improving your financial position.

Student Debt Remains

Ultimately, the shopping sheet clears up the small print on your financial aid offers, but does little to deter students from taking on huge debts. After all, students knew they were taking out sizable loans when they signed the paperwork. They just didn’t understand how big they were or how difficult they would be to pay off. The best way to reduce student loan debt isn’t to point how much they’ll owe just weeks or months before they need the money, it’s to reduce or eliminate their need for student loans in the first place.

And that’s done by increasing your need-based and merit-based aid.

The shopping sheet is a step in the right direction, but so much more needs to be done to lower student debt. Families need to map out a plan to maximize their aid. The shopping sheet just doesn’t do that. It’s a Band-Aid on a gaping wound.

Visit our Financial Aid page to see how RSC can improve your financial aid picture!

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