How Many Colleges Were Misleading Students About Financial Aid?

Trying to find enough money to pay for college is a challenge for many high school students. Along with the escalating cost of college, and the institutions’ much-publicized habit of obscuring their true costs, just finding where the money is available is a big challenge.

But the application for federal financial aid, the standard form every American college student fills out in order to take advantage money available for college, is free. Indeed, that’s in the name. It’s the Free Application for Federal Student Aid.

But some colleges seem to have been charging prospective students a fee to access their own government-provided financial aid. According to an article by Michael Stratford at Inside Higher Ed:

Representative Elijah E. Cummings of Maryland, the senior Democrat on the House Oversight Committee, said last week that his office had identified 111 cases of colleges either requiring students to submit fee-based forms for federal student aid or insinuating that such forms were needed to access that aid. He asked Education Secretary Arne Duncan to meet with him to “discuss how the department can address this issue by warning schools that this conduct may violate federal law.”

Colleges are allowed to require students to fill out the CSS PROFILE to be considered for their own institutional aid programs, but they can’t attach such a condition on students seeking only federal aid. Federal law requires institutions to accept and process the Free Application for Federal Student Aid at no charge.

CSS PROFILE, short for the College Scholarship Service Profile, is a separate, fee-based form distributed by the College Board to help institutions award their own financial aid packages to students applying for admission. It’s more detailed than FAFSA and costs a student $16 per school.

In response to the Congressional investigation, many colleges quickly changed the wording on their financial aid pages.

According to the article, Bucknell University, a school Cummings specifically mentioned, used to say that students had to fill out a fee-based form because “if you do not file the CSS PROFILE on time, we cannot guarantee that any aid can be awarded to you.”

But this isn’t really true. Federal grants and loans are dispersed based on FAFSA alone, the CSS PROFILE doesn’t have any impact on that aid.

Bucknell has since altered the website to indicate that FAFSA “will not change your eligibility for Bucknell need-based financial aid” and not filling out the CSS form merely disqualifies a student from “any Bucknell need-based aid.”

Why were colleges doing this? In practice it might be simply that all students who want to access financial aid have to fill out the CSS PROFILE anyway. It’s a little more straightforward, rather than giving every student a mini-lesson in the legal rules for college scholarships, to say: You want financial aid? You have to fill out these forms.

But as Rachel Fishman of the New America Foundation puts it, the real problem isn’t how colleges have smushed together the FAFSA and CSS PROFILE rules on their websites: “If you’re really looking out for students’ interest you wouldn’t have this application to begin with.”

The reality is that that $16 can serve as a barrier that leads poor students to avoid applying to certain colleges, especially reasonably wealthy colleges like Bucknell, that are in a position to give poor kids a lot of scholarship money.

Daniel Luzer

Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer