This month, the federal government switched off a tool that student financial aid applicants used to import their tax data into forms, adding laborious steps to a process that the tool was supposed to simplify. The possibility of identity theft was the stated reason, big enough to shut down the tool in the middle of the busy season for people seeking aid.
No big deal, right? Well, it is if you've been tracking this whole blasted system of paying for college for a while. If you are in the thick of it now, or if you and your family will be entering it in the next decade or so, pop a Xanax as we discuss how this event symbolizes the sadness that so many education experts feel for the frustrated families that have to navigate it all.
First, a few words about that process. It's not exactly a model of efficiency.
Retail prices for an undergraduate degree from public universities are high and can cross over into six-figure territory for tuition, room and board in some parts of the country. Price tags for private schools are much higher, approaching $300,000 all in.
The schools themselves will offer large grants to some, most or occasionally all students who can prove they cannot afford the list price. More than half of students qualify for this so-called need-based aid at some private institutions.
Other colleges will offer discounts (but refer to them as "merit aid") to students who do not need the money but have really good grades. The catch? You get the money if the school feels it needs to raise the quality of its freshman class in order to appear more attractive to future applicants who can (the hope is) afford to pay more. Or maybe it needs to discount just to fill enough beds to balance its budget for the year.
The federal government becomes involved through the dreaded Fafsa form. You fill this out in order to qualify for the Pell grants that go to needier students, loans of all sorts and other programs. Schools and states may use Fafsa data, too.
See what is going on here? Prices go to the moon, such that the rack rate for many private colleges is $100,000 more than the median home price in the United States. Then we cut the bill in various ways through utterly complex processes that involve a lot of spreadsheeting, algorithms and consultants for higher education administrators and begging and haggling for families.