College on a Dime: What exactly is financial aid? The answer will surprise you
US News & World Report's annual America's Best Colleges publication is extremely influential in the college decision process for many families -- and not entirely wrongly. It furnishes readers with rankings, information on up and coming colleges, and a detailed guide to loans and financial aid.
The directory provides information about financial aid for every major college in America. Villanova University, for example, determined that 45% of its undergrads "had financial need" with an average aid package of $23,433 per year.
But what exactly is financial aid? On page 130 of the 2009 edition, America's Best Colleges defines it as "grants, loans, and jobs."
Now hold on there just a minute. On what planet is pay for a job financial aid? I thought that fell under the broader heading of "work" -- an exchange of a service for money, no? Is selling kidneys financial aid too? I also can't figure out how a loan -- money to be paid back with interest -- qualifies as financial aid. Does that include private loans? It doesn't say.
US News & World Report lumps grants, loans, and work study together, making the figures essentially useless for students looking to see how much they will actually have to pay, whether that's tomorrow or over the next 20 years. But what's most troubling is that the metric is a reflection of the way too many families think about college: no regard for the the impact money to be paid back later will have on their children's lives.
To read more from Zac's 'College on a Dime' series, click here. Be sure to leave a comment if you have a question or topic you'd like him to cover in a future post.