Accountability meets the Ecosystem

Did y’all see this report from the Government Accountability Office?

Financial Aid Offers: Action Needed to Improve Information on College Costs and Student Aid

The title sounds… like action is needed; sure, but it doesn’t convey the urgency here. The fact is, the issue they are trying to solve is significant. It contributes to the student debt crisis and systemic inequalities, it makes it harder for students and families to make clear financial decisions when comparing colleges, and it erodes trust in our institutions.

You see, back in 2019, the Financial Literacy and Education Commission published a guide defining best practices that colleges should follow for communicating critical information to students in financial aid offers. This year, the Government Accountability Office (GAO for short) inventoried 176 institutions against those best practices for student financial aid offers and discovered not one of the 176 follows all 10 practices, and only 3% followed 9 of the 10. About 41% of colleges do not include a net price in their financial aid offer at all. And approximately 50% underestimate the cost of their institutions.

Here are the best practices they list:

1. Itemize key direct and indirect costs (think tuition versus books and food).
2. Provide a total cost of attendance (COA) that includes key costs.
3. Estimate the net price (by subtracting only gift aid from key costs).
4. Separate gift aid, loans, and work-study.
5. Do not include a parent PLUS Loan or, if included, separate and differentiate it from student loans.
6. Label types of aid.
7. Label sources of aid.
8. Include actionable next steps. (Students should be informed of their next steps to accept, decline, or adjust the aid in the offer and the college’s point of contact for additional assistance.)
9. Highlight key details and distinctions about loans, grants, and work-study. (E.g., many grants come with stipulations attached.)
10. Do not refer to the offer as an “award.”

Now, let’s talk about managing data systems #

Colleges and Universities need to manage a ton of records for many years. We need to track the courses students take, the degree plans those students and coursework are tethered to, the credit hours students spend throughout their program, and how those programs articulate with state standards and licensing. We need to manage transfer and articulation agreements, assessments, tuition payments, and degree progress - it’s a bit mind-boggling.

We also need sophisticated data systems to manage the financial aid and loan process.

You probably know there is a whole industry of student information systems to address these needs. You’re familiar with the names of the companies: Oracle (a.k.a. PeopleSoft), Ellucian, Jenzabar, and the like.

What you might not know is that these companies don’t make it easy or cheap for their clients to create clear user interfaces for students and their families. And they don’t even set up their products to default to the basic best practices set out by the federal government.

Default settings and their costs #

Let’s just look at one best practice - #10. Do not refer to the offer as an “award.” - and how these student information systems market themselves. Here are a few screenshots:

1. Oracle (PeopleSoft). Here’s a photo from their own website as an example of their product.

2. Ellucian. Same thing…

3. Let’s not forget Jenzabar. This is a screen capture from a demo of their product.

All of them use “Awards.” You would think that making a global change to the core product to make it easier for institutions would be a high priority for these companies. But it’s clearly not. Even when these companies are marketing themselves, they make NO ATTEMPT to show interest in conforming to these best practices.

This leaves institutions requesting changes to the core product and spending money on developers to change their institutions’ instances. This carries tech debt because each time one of these companies rolls out a new update, developers are called in to ensure none of their code breaks in the process.

Who really cares about the word “award”? #

This best practice is optional. It’s only recommended. What are the risks, really?

1. Students see the word “award” and don’t realize immediately that there are loans mixed in that they have to pay back with interest. Also, they often don’t realize that grant amounts can change year upon year due to changes in their parents’ salaries.

2. In a User Experience Focus Group last year, I heard from parents that they thought all financial aid offers were loans. They were just skipping over the possible grants their own students were offered. They looked at the FAFSA as a loan application. Meanwhile, institutions across the country use the FAFSA as a financial eligibility test. So, not only are students missing out on federal or state dollars, but they’re also missing out on institutional grants and scholarships because these funds are poorly understood and miscommunicated.

3. The students and families who are least likely to know how to interpret these systems are often first-generation college students and non-native English speakers.

The word “award” misrepresents what is in the student financial aid offer. It causes mistakes and mistrust. And this “Awards” issue is just one of ten.

Accountability is not just about what higher education institutions are doing, but about the whole business ecosystem that supports these institutions. The public relations blame here will be laid at higher education’s feet. But, with collective action on behalf of institutions and associations, we can put pressure on this ecosystem to support us with better products and services for the students’ benefit.

- Kristin Van Dorn

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Has Social Media felt less “social” recently? #

It didn’t use to be like this.

In the early aughts, people used Social Media for one-to-one communication with their friends, peers, and community members.

But eventually, brands and large companies were like, “hey, can we get in on that?” And honestly, it’s never been the same.

Despite efforts by brands to sound more “real,” most marketing always feels a little inauthentic because behind the messaging, there’s an action they’d like you to take. Buy a product, sign up for a service, enroll in a program, generate revenue, etc.

So what do we do? #

The most obvious solution is to focus less on being perceived as a “cool” brand and to seek out more opportunities for meaningful one-on-one conversations with your customers.

- Joel Goodman

Note: I expand on this in a video called "Social Media is Neither Social Nor Media." Consider subscribing to Bravery’s new YouTube channel.

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Happy Holidays and we’ll see you in 2023!