Supporting Students Through COVID-19 Towards College and Career

Things are changing in real time as colleges decide whether they will serve students on campus or virtually this coming fall. Likewise, students are considering a range of issues such as how far from home they can realistically go, if they need to work sooner than later, and if college expenses are even wise right now. As allies and college financial advisors, our intention is to ensure that all students have the tools and resources they need to make informed and affordable college decisions — ultimately helping them reach their college and career goals. As such, it’s important we know the circumstances students face if we are to strike the balance between giving expert guidance and affirmation as they make this important decision in their young lives.

While more low-income students are attending college, fewer students are graduating on time.

According to the 2020 Indicators of Higher Education Equity in the United States report, for every 100 low-income and first-generation dependent students entering college, only 26 will have earned a bachelor’s degree six years later compared with 69 of students who are not low-income and first-generation. While more low-income students are attending college, fewer students are graduating on time.

We know that students enrolling in a college with sustainable financial planning is critical for their success — both in college and beyond. Deciding what college to attend, however, is rife with financial risk. Colleges may offer a student dramatically different financial packages, but full cost information can be difficult to obtain, hard to compare, and challenging to interpret.

Why is financial aid so difficult?

In Moneythink’s Financial Need and Ownership Report, we reveal two driving factors of students’ financial vulnerability based on our interviews:

1. Unmet Need — the amount that is left to be paid after financial aid is awarded (not including loans).
2. A Sense of Ownership — students who view themselves as responsible for their financial situation have an internal sense of ownership over their financial situation.

Unmet need is rarely clear. Financial aid award letters are difficult for students, families, and academic counselors to interpret.

Unfortunately, financial aid award letters are a major source of inequity, confusion, and misinterpretation. This is easy to grasp when we consider that most award letters:

1. Include confusing jargon and terminology.
2. Omit the complete cost of attendance.
3. Fail to differentiate types of aid.
4. Mislead packaging of parent plus loans.
5. Provide vague definitions of work-study.
6. Show inconsistent bottom line calculations.
7. Do not provide clear next steps.

The financial aid clarity challenge is not a partisan one. According to Senator Lamar Alexander on NPR:

“We consistently hear from students, parents, and administrators that students looking for federal financial aid to go to college need a much simpler system for the $30 billion in grants, roughly $100 billion in new loans, and the repayment plans for those loans.”

In the article The Financial Aid Conundrum, we see that this issue affects all students, but it disproportionately impacts low-income students of color who tend to have a lower sense of ownership of their financial realities. To no fault of their own, when students lack basic financial literacy skills, they make important decisions, such as college matriculation, that are based more on the influences of others than their own needs and those tend to be fueled more by opinions rather than critical information.

The shorter and longer term consequences are dire:

• 70% of college dropouts leave school due to pressing financial concerns.
• Pell grant recipients, most of whom have family incomes under $40,000, are 5x more likely to end up in default as their higher income peers.
• First-generation students are more likely to end up in default than students whose parents had attended college.
• African-American students are more likely to default on their loans than students of other races and ethnicities.
• And, while 60% of white students borrow money, 87% of minorities borrow to attend college.
• In large part, the combination of opaque college pricing and unnecessary financial stressors has led to the nation’s ever-growing $1.6 trillion student debt amount — and growing.

As an ecosystem, how can we ensure that all students have the opportunity to successfully enter and complete college with little to no debt while also bringing greater transparency to college costs?

Moneythink is on the case

Since our inception, Moneythink has been a leader in youth-focused financial education, empowering students from traditionally underserved communities. From 2008–2016, we mentored 30,000 HS seniors and college freshmen nationwide using our proprietary financial capability curricula — garnering accolades along the way, such as the White House Champions of Change Award.

Learning from our direct experiences and getting valuable insights from students, themselves, we honed in on one of the most decisive moments in a young person’s life: the opportunity to enroll and eventually graduate from college with minimal financial burden. With an acute understanding of the obstacles in the ecosystem, it was clear that a successful Moneythink college-affordability program could provide real-time, in-demand financial empowerment tools through virtual college financial advising, while also driving long-term behavioral change and financial wellness habits. Between 2017–2019, we provided financial college coaching to over 2,500 students in Illinois and California.

Along the way, it became clear that we could actually help students and simultaneously help build capacity for the college access field. As a student-first, human-centered design focused organization, we did a lot of listening, researching, and learning about the acute partner needs. We quickly confirmed our own experience and research that college affordability, cost transparency, and financial aid award simplification were a widely acknowledged — and huge, interrelated — challenge. We began convening advisors and organizations already doing great work with the aim of optimizing learning more about how we might advance their financial aid coaching and affordability work through our tools, content, and training.

In Meredith’s interview with Next Gen Personal Finance Co-Founder Tim Ranzetta of the “Tim Talks To…” Podcast, she reminds the field:

“It’s not because there isn’t a standard format. The Department of Education has suggested a financial aid award template to help clarify and systematize the information across different colleges. But it’s really up to colleges to decide how to format the information, the language they use. And we’re really seeing a lot of variance between college financial aid award letters.”

We know that students, families, and educators need to have accessible resources and tools at their fingertips to make sense of the imprecise information they can get, in the confusing format it’s in, to make a truly informed choice that keeps students’ goals at the center.

This is where Moneythink’s new affordability tool, DecidED, comes in.

What Moneythink’s DecidED does for students and for the college advising space

Moneythink is setting out to tackle the affordability problem at the scale and urgency at which it exists. Our new public-facing tool, DecidED, scheduled for full release this fall, completely removes the guesswork out of college affordability for students and their families, as well as enables counselors and advisors in the space to have productive conversations with their students about the tradeoffs of college options.

DecidED helps students and their families:

• Make highly informed enrollment decisions grounded in an accurate and complete understanding of college costs;
• Compare true apples-to-apples affordability levels, quality, and fit across multiple college options;
• Consider how graduation rate and future salaries outcomes might influence their enrollment decision;
• Weigh the tradeoffs of their college choices;
• Create a data-driven financial plan to responsibly pay for their college years.

DecidED is positioned to support educators and institutions during, throughout, and after the financial aid application process for students.

• Practitioners will be able to use DecidED for relevant, accurate financial aid guidance and advising so that they can navigate the “next normal” as education systems re-invent themselves. Advisors and counselors can feel more confident using clear guidelines and tested methodology when supporting students.
• Administrators and Advocates can use DecidED for training, research, stories, and data that can fuel reform efforts in light of lessons learned this year. Our tool helps schools, districts, and college access organizations extend and deepen the reach and impact of their own services by scaling financial aid literacy and reporting.

Using optical character recognition (OCR) and machine learning technology, DecidED clarifies the difference between gift aid (what students don’t have to pay back such as grants and scholarships) and self-help (what students have to pay back or earn such as loans and work-study), and makes clear what the total costs of attendance are.

Only with all of these pieces can students and families fully understand 1) what college will cost, especially for the first year, 2) how much outside aid they will get to go there, 3) what is left for the family to cover, and 4) how to gauge other important fit factors in the enrollment decision. By helping students make affordability-informed enrollment decisions upfront, we’re creating clearer pathways for students to successfully enter college and be on the road to obtaining a bachelor’s degree within their expected time to completion — all with little to no debt.

Partner with Moneythink to scale success

Whether you are a high school counselor, an ed-tech representative, a school administrator, a district director, an education advocate, or a college access program lead, we want to help you scale your and your students’ success.

Here are the different ways you can engage with Moneythink to enhance your services and extend your impact.

• Sign up for a DecidED Demo this summer and learn how the tool can be used by you and your partners to improve your student outcomes and increase your team’s capacity to advise and affirm.
• Sign up for a Moneythink Financial Aid Training for the fall and let our content experts update your staff on financial aid policy, financial aid applications, and best practices in the field.
• Sign up for the DecidED Pilot Partnership for the fall so that we can offer your organization the collaboration, data, tools, and resources to help your students succeed.
• Sign up for a Moneythink API Info Session if you’d like to learn more about how our data, reporting, and API resources can complement and improve your existing tools and reports.

DecidED comes at a critical time when K-12 systems are still waiting to understand how the coronavirus will impact school plans for the 2020–2021 academic year. Moneythink is here to support education leaders in designing a new normal for graduating high school seniors, incoming college freshmen, and incoming college transfers so that we can all help even more students in making well-informed and affordable college decisions.

Together, we can help our students not just survive but thrive. Not just complete, but succeed. Our students can achieve #lessdebtmoredegrees while we design a pathway towards an economically sustainable future for themselves and their families.

About the authors:

Joshua Lachs serves as the CEO at Moneythink, a national ed-tech nonprofit that aims to bring college cost transparency to scale while helping all students have the opportunity to earn a college degree with little to no debt.

Meredith Curry is a Senior Advisor at Moneythink. Meredith has served as the Founding Director of Operations at California College Guidance Initiative and the Executive Director at South Central Scholars.

As former first-gen college students, Josh and Meredith each know firsthand that the financial side of college can be daunting and are both inspired to ensure that students have access to the opportunities they deserve.