Parents: We can’t possibly afford $60,000 per year for our daughter to go to Medallion University.
College representative: But Medallion University provides financial aid based upon your family’s financial need.
Parents: Oh, that is interesting. Someone told me that Medallion University was need-blind, so I just figured you didn’t care if we couldn’t pay that much.
College representative: If your daughter is admitted to Medallion University, we will calculate your expected family contribution.
Parents: Well, we contribute to our church but we have never made a contribution to Medallion University, but someone told me this is expected in order to get in.
Should we laugh or cry about this exchange? While the conversation is written in English, the parents and college recruiter are not speaking the same language. The college representative is speaking the “Language of Financial Aid” while the parents are speaking a language about paying for college.
I call the former “Financial Aid Speak” and the latter “Payment Language.” To explain college pricing to the American public, higher education administrators must translate their rhetoric to Payment Language so families can make informed decisions about whether they can afford the price.
Actually, college administrators speak several languages in addition to Financial Aid Speak. Vice presidents for finance, for example, speak “Cost Language.” They engage in discussions about balance sheets and expenditures for producing a college education
Like Académie française for French, Cost Language has regulating boards that dictate the standards for word usage. The Government Accounting Standards Board (GASB) and the Financial Accounting Standards Board (FASB) regulate the meaning of words, phrases and concepts for finance administrators from the public and private sector, respectively. But administrators correctly hold no expectation that the public would know or even care about the wording of, say, FASB Rules 516 or 517 as a generally accepted accounting principle.
To balance a budget these same vice presidents for finance also estimate the income side of the ledger. Here the language follows not only GASB and FASB rules, but also the more public vernacular of “Tuition, Fees, Room, Board, Transportation, Books, and Other Expenses.” Vice presidents for enrollment management may use additional phrases like the “Cost of Attendance” or a “Comprehensive Fee” to explain the full price of going to college at an institution. They are using Price Language to explain the price of college.
“Ay, there’s the rub,” as the Bard reminds us. Price Language and Cost Language do not explain how much most families, and certainly not low-income families, will actually pay for college. Families must also understand Financial Aid Speak or be left with the impression that everyone pays $60,000 per year. Perhaps many families narrow their choices of where to apply because they are not multilingual, or maybe they speak Price Language and don’t understand Financial Aid Speak.
And why should they? Financial Aid Speak evolved from internal administrative activities at Medallion University -- procedures that now exceed half a century in age. “Expected Family Contribution,” for example, became the shorthand jargon of financial aid officers to explain how much a family would pay after the financial aid distribution to a student.
An “award,” (not to be confused some kind of “prize") has different components, i.e., the “package” is made up of “gift aid” and “self-help.” Ironically, these birthday sounding words reduce the family’s financial obligation, not only by the amount of money available to the family but also according to the admissions priorities of Medallion.
“Scholarships,” or “grants” – the so-called “gift aid” -- reduces the “net price” for a family, while a job or a loan – the so-called “self-help” -- requires labor and repayment. Who is “giving” this gift that requires payment of an unaffordable bill? And is the “help” really for the “self” or a down payment on the school’s operating budget? This language so familiar to the financial aid officers ignores the verbiage that an untrained family uses to consider college affordability.
Add the various proper nouns and one begins to think that Financial Aid Speak is a history exam. Pell, Stafford, Perkins, SEOG, Plus at the federal level, or Lindsay, Herter, Adams, Tsongas at the state level where I live in Massachusetts, are generous programs; but families often must find and recognize eligibility, and complete lengthy forms for these named programs, to receive the intended financial help.
“Net Price,” is the central concept for knowing how much a family pays for a college education. A consumer buying a car or a television or a computer would recognize the concept as the listed price minus any store discounts and rebates. The “Net Price” for a year of college is the price of attendance minus grants and scholarships from any and all sources.
Savings (past resources), wages (present resources), and loans (future resources) – both of student and parents -- describe the assets that a family will use to pay for all of these academic goods and services over time. This is the vocabulary of Payment Language; it is simple, direct, understandable and essential for general understanding of college prices. The public speaks Payment Language every day.
Recent research has shown that over half of the high-achieving students from low-income families never consider selective public and private colleges even though the price of attendance could actually be lower than the college they select.
Entitled “Boston’s Faces of Excellence,” the Boston Globe published the photographs and future plans for the valedictorian from each of the city’s 44 public high schools. The student destinations included selective private universities (Harvard, Boston University, Boston College, Northeastern), flagship state universities (the University of Massachusetts, the University of New Hampshire), state public colleges and universities (Westfield State and Bridgewater State), local colleges (Simmons, Mount Ida), community colleges (Bunker Hill), and undecided.
How many of these students made their choice of college knowing the financial options that were available from all sectors of higher education? Their preferred college could have depended on the best fit for each student, but one suspects that at least some of these students had a conversation that sounded like the one at the beginning of this essay. And for the valedictorians whose surnames are Lopez and Garcia, and who were born outside of the United States, one wonders how Financial Aid Speak translates into the parents’ native tongue.
Financial Aid Speak is a precise language; the verbiage describes what enrollment managers do when they decide about price discounts and eligibility for jobs and loans. Becoming articulate requires years of experience and training. When spoken well, it allows financial aid officers to compare pricing among a large number of college applicants from a variety of financial and academic backgrounds. It also produces an illusion of fairness by using standardized criteria applied equally and professionally to all applicants.
Financial Aid Speak, Cost Language, and Price Language, however, do not use words and phrases that provide adequate explanation to those that need pricing information the most – middle and high school students with low-income parents. Many education experiments indicate that simple, straightforward explanation about college pricing increases the college-going rate and available college options to low income families. Meaningful communication is a necessary condition for informed choice.
Payment Language uses words and concepts directed toward that objective. It can enlighten those who may have limited their college choice because they did not understand the available information about paying for college. Colleges must use words with universal meaning for financial transactions that explain the choices about what college to attend and how to pay the bill. We should adopt Payment Language, and follow these principles::
Payment Language adopts only words that are used in common financial transactions that are familiar to the public.
Payment Language produces comparable concepts about college pricing in all institutions from any sector of higher education, for all types of financial aid programs, and for all amounts of discounting and payment.
Payment Language uses “net price” – the amount of money that the family pays for one year of college -- calculated as the price of attendance minus grants and scholarships from all sources.
Payment Language separates financial obligation among the institution, student and parents.
Payment Language identifies the federal, state, institutional, and other programs and their associated eligibility requirements as a source of funding.
Payment Language identifies the expected timing for payment into past (savings), present (wages), and future (loan) financial obligations.
Payment Language includes the responsibilities for education loan repayment, including the interest rate, effect of compound interest, the total interest, monthly repayment, the possibilities for reduction and forgiveness as well as the incidence and consequences of default and bankruptcy.
Payment Language is as easily understood in Spanish as English and can be translated directly to other foreign languages.
These principles require testing. Conjecture about how people talk, the words they use, and what they understand is not enough to evaluate the benefits and the costs of a college education. Years of good intentions notwithstanding, our communications with the public about paying for college are confusing and often misunderstood outside of the academy.
C. Anthony Broh is the founder and principal of Broh Consulting Services and co-author of Paying for College. He has been constructing a universal “Language of Financial Aid” with financial aid officers for more than a decade.
Mark: President Eliot! I didn’t realize you’d be attending this alumni event. You know, given that you’ve been dead for almost a century.
Charles: Yes, it’s the strangest thing. Last I remember, I was skating on Fresh Pond….
M: Cryogenics are quite wonderful. Didn’t do much for Ted Williams, though.
M: Not important. I’ve read a lot about you. Harvard’s president for 40 years. You really were (air quotes) “Charles in Charge!”
M: Well, you’d never last that long today, especially spouting controversial views on education and society like you did. Didn’t work out so well for the last guy here.
C: Our positions demanded that we take leadership of the intellectual and moral issues of our day.
M: Now you’re just expected to raise money.
C: We did that as well.
M: Oh, it’s a different ballgame these days, a lot more complex. Higher expectations and greater accountability. But more perks and better pay, too. Some university presidents make over a million bucks a year. Can you believe it?
C: That’s preposterous.
M: You should ask President Faust about what today’s presidency entails.
C: Yes, I’ve been meaning to speak with him.
M: Her. President Faust is a woman.
C: (air quotes) “Drew” is a woman?
M: Oh, yeah. Harvard’s first female president.
C: A woman president. Astounding.
M: Not really. Half the Ivy League has had female presidents.
C: Half the what? What’s an Ivy League?
M: It’s an intercollegiate athletic conference with Harvard and its peers.
C: Harvard has no peers.
C: And that’s an idiotic name, Ivy League. Who coined it?
M: A sportswriter, I believe.
C: Figures. I detest collegiate sport, especially football. Barbaric. And the hooligans who play it. What a scourge on the academy. Have they done away with it yet?
M: Not exactly.
C: To me, exercising the intellect is far more important. I started the elective system, you know.
M: Yes, I know. And now we’ve taken that concept, a pragmatic extension of the curriculum, to a new level. Thanks to MOOCs, colleges are bringing courses to the masses, and often at no cost to the student.
C: Free courses? That’s truly preposterous. And who are these mooks you speak of?
M: MOOC stands for Massive Open Online Course.
C: Another idiotic name. Why not Free University Course Content? Oh… never mind. And I won’t bother to ask you what online means.
M: Just as well.
C: Surely no reputable institutions are in this business.
M: Princeton, Penn, MIT, Stanford…
C: That upstart out West?
M: That’s the one. And Harvard.
C: Heresy. Harvard cannot allow just anyone to feed from its trough. We must maintain impeccable academic standards and grant entry to only the brightest minds. Consider the possible damage to our…
M: That ship has sailed. These days anyone can say they’re studying at Harvard, even though for now they won’t be getting degrees. Or even course credits. Again, for now.
C: (gulping martini…)
M: Of course, employers know the difference. Saying “I attended Harvard” doesn’t always mean the same thing.
C: It did in my day.
M: A lot has changed, Mr. President. You need to catch up on the last 90 or so years. Higher education is a different world. It’s more democratic and inclusive, but at the same time it’s even more selective than in your day. You’ll be pleased to know that Harvard routinely places first or second in U.S. News, a magazine that purports to rank colleges based on quality.
M: It doesn’t mean much to those ranked near the top, but the wannabes make a big deal out of it.
C: You’ve lost me.
M: Places like Harvard don’t worry about attracting the best and brightest.
C: Except that these MOOCs will attract all form of cretins who wish to suckle from Harvard’s teat in a shameless attempt to profit from our good name.
M: I…um…wouldn’t exactly put it that way.
C: So you approve of these MOOCs, do you?
M: Let’s just say I’m in favor of expanding educational opportunity, and that I doubt the reputation of places like Harvard will suffer as a result. At least not yet. If elite institutions start making relatively cheap degrees available to anyone with a computer, I might change my mind.
C: Computer, MOOCs, online, women presidents. It is all very perplexing. I suppose you will next tell me that we no longer require literacy in Greek and Latin for college entrance.
M: Let’s get another drink, Mr. President. This might take a while.
Mark J. Drozdowski is director of university communications at the University of New Haven. This is the latest installment of an occasional humor column, Special Edification.