Just how much thought needs to be put into communicating with parents about financial aid options? Probably more than you thought. According to a survey conducted by global strategic branding firm Siegel+Gale, few parents understand the terms necessary to make fully informed financial aid decisions. In fact:
- more than three-quarters of survey respondents did not know the difference between cheaper government subsidized loans and unsubsidized loans, which are more expensive.
- 40 percent of working class families surveyed didn't realize that Pell Grants are not loans, but federal grants, which do not have to be repaid.
- 25 percent of parents do not know that grants in general do not have to be repaid
- Less than half of parents knew that not all student loans require a credit check.
- More than two-thirds of parents were unaware that work-study money is taxable income to the student.
One might think that it was parents of high school age students or younger who were surveyed. Not so. Siegel+Gale surveyed 202 parents of college-age children who have applied for financial aid in the past two years and who have evaluated financial aid award letters from schools. In other words, parents who have already been through the process have serious knowledge gaps in terms of financial aid.
Siegel+Gale simplification expert Irene Etzkorn argues the root of the problem stems from a unique environment in which colleges, the federal government, and state agencies each use their own jargon, acronyms, and definitions. Ultimately this leads to added confusion. Ask yourself this: Can my institution's financial aid award letters and related communications be comprehended easily, or do families need to decode them?
Siegel+Gale's Financial Award Letter Survey findings are based on June 2008 online responses of 202 parents, 40-60 years old.
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