June, 2016
Washington -- The New York Times recently offered readers what appeared simply to be good financial advice in an article "The Best Way to Help A Grandchild with College." But in a quick rejoinder a college president said he was stunned that the article appeared, claiming it was shameful to try to hide potential tuition-paying resources from colleges. He said his college was doing its best to help students pay for college with institutional aid based on merit and need, and that grandparents and parents should not try to game the system.
A college admissions officer was even more blunt: "I will not help you hide your money when you apply for financial aid."
College officials would have more credibility if only they were transparent about their own financial aid gaming. Colleges routinely siphon off federal aid aimed at needy students. The trend of financial aid is unmistakably toward those who don't need it, at the expense of those who do. So much for the argument that grandparents who read financial advice columns are responsible for the lack of aid to needy students. Colleges even mislead charities willfully, falsely telling them that the funds they raise will help needy students pay for college. These are not isolated examples. Colleges are engaged in widespread, systematic gaming of students, families, charities, and taxpayers.
A pox on all of the gamers, including those in Congress who perpetuate such a diabolically difficult student financial aid system. Let's add a pox on the U.S. Department of Education, too, for not cracking down on those who undermine the purpose and mission of federal programs.
There is an opportunity coming up to change things: the reauthorization of the Higher Education Act, which is being drafted in Congress. But don't get your hopes up. There is little evidence that we are in for anything but six more years of financial aid gaming by whichever parties are clever enough to do it or, to put it another way, naive enough not to.
