Article

Giving Students the Gift of Time

Instituting a Financial Aid Waiting Period Before College Enrollment

Students need the right tools to make better decisions about their college options, writes Julie Margetta Morgan.

A student studies financial aid documents. Congress should require that colleges show students their estimated financial aid package at least 10 days before enrollment. (AP/Daniel Hulshizer)
A student studies financial aid documents. Congress should require that colleges show students their estimated financial aid package at least 10 days before enrollment. (AP/Daniel Hulshizer)

When it comes to decisions such as making a major purchase or whether to send an angry email to a co-worker, the best advice is always to take a little time to think about it. In fact, many states institute waiting periods for major decisions like buying a gun or getting a divorce. So when it comes to spending thousands of dollars on enrolling in college, shouldn’t students have time to consider their choices?

Policymakers are wrestling with how to solve the problems that emerged in recent investigations of the for-profit college industry, including high tuition for students and low salaries for graduates, significant student-loan default rates, and high-pressure sales tactics. We need solutions that take poor-performing programs out of the marketplace as well as ones that help students make better decisions about where to apply.

One simple way to get better outcomes from for-profit institutions is to foster good college decision making by giving students time to consider their financial aid packages and other information about the college before deciding to enroll. Congress should require that colleges show students their estimated financial aid package at least 10 days before enrollment.

The Government Accountability Office’s “secret shopper” investigation of for-profit colleges illustrates the importance of time in the college choice process. It turned up video footage of admissions counselors—essentially for-profit college sales reps—using high-pressure tactics to convince students to enroll. In two video clips, the GAO official posing as a student asked to speak to a financial aid officer about the expected costs of the education. In both instances, the admissions counselor said that the student could not consult about financial aid or see an estimate of their out-of-pocket costs until he “reserved a seat” by signing an enrollment agreement—a binding contract to pay the tuition.

The Department of Education is set to release a regulation that will create a baseline for the value of proprietary educational programs by ensuring that students’ debt-to-income ratios do not exceed a certain amount and that students are able to repay their loans. But students still need to choose among institution and program options that vary significantly in terms of quality and price.

CAP and other organizations advocate for giving students more information to make these choices, but the underlying notion in these policy proposals is that students will have time to consider that information. We propose a simple way for students to compare financial aid packages or that students in health care career programs need graduation rate, average salary, and job placement information before enrollment. These efforts must be coupled with an assurance that students will be able to consider the information and seek advice from parents, counselors, or nonprofit organizations.

Some traditional colleges have built this time into the admissions and enrollment process, but this is a convention rather than a requirement. In both for-profit college recruitment and not-for-profit college admissions, the schools retain much of the power over the process. Consumers are subject to application deadlines, competition for limited seats, and financial aid requirements, and all of this inhibits students making sound choices among institutions.

It is important to arm students with a few key things to make better decisions: comparable information about college options, opportunities to seek counsel, and time. A waiting period coupled with good information and access to unbiased advice is the most basic necessity for good college decision making.

Julie Margetta Morgan is a Policy Analyst with the Postsecondary Education Program at the Center for American Progress.

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Authors

Julie Margetta Morgan

Director of Postsecondary Access and Success