What Millennials Need to Know About Financial Aid

Millions of students’ abilities to pay for college hinge on their understanding of the federal financial aid process; how it works, what options they have to pay for college, and how it will work after they graduate.

The Young Invincibles, a non-partisan non-profit organization that seeks to amplify the voices of the Millennial generation who Campus Progress has worked with on student debt issues, released a report analyzing the student side of financial aid. After they surveyed 40,000 high-debt Millennial borrowers, traveled the nation on a 20-state bus tour, and collected 35 in-depth student interviews, YI came to a few important conclusions about: the government's role in higher education, Millennials' level of general federal financial aid know-how, and policy preferences to reform the current college aid system. Here are the findings:

Millennial opinions on higher education

• 84 percent of Millennials polled said that making college more affordable should be a priority for Congress, second only to creating more jobs.
• 73 of respondents don’t support cutting Pell Grants in order to reduce the federal deficit.
• 1 in 3 high debt borrowers did not receive enough financial aid to fund their education, and instead had to work, take out private loans, borrow from parents, use credit cards, or use other means of financing their college experience.

What students already know and what they need to know when going to college

• 2/3 of students surveyed did not understand the difference between federal and private student loans.
• 40 percent of respondents said they did not receive loan counseling from their high schools, as mandated by federal law. This is not to say that 40% of high schools do not give this counseling, but rather that many students forget this important information not long after they learn it.

Policy changes that Millennials support to reform the federal aid system

• 90 percent of respondents support a standardization of all financial aid award letters.
• 89 percent of students surveyed are in favor of automatic enrollment in income-based repayment on their loans, in which one pays a fixed percentage (usually 10 percent) of their income to pay off their student loans.
• 87 percent of Millennials polled are in favor of giving a reduced rate of tuition to students who graduate on time.

The Young Invincibles conclude their report by acknowledging that "[t]hese reforms take bold action on the part of all actors: President Obama, Congress, the Department of Education, schools, and importantly, students. But such action is necessary if we are to provide the same economic opportunities to this generation as we have to every previous one."

Sydney Hofferth is a Communications Intern for Campus Progress. You can follow her on twitter at @squidhoff10.

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