Financial Fit is a Thing: Ignoring it Won’t Help Your Students

Word choice matters

We may not want to admit it, but we’re not always as careful with our language as we ought to be.

Exhibit A: Irregardless.

Exhibit B: Misunderestimated.

Exhibit C: Fit.

Yes, you read that right: Fit. From the clothing we buy to whether a job applicant is a good match for a position, the word is used broadly across our personal and professional lives. The contextual ‘fit’ being discussed changes the perception, approach and meaning of the word.

For example, when we’re shopping for pants, the question of fit isn’t simply, “Can I get these things on?” Usually, fit extends to budget, fabric, color, freedom of movement, silhouette and quality of the pants. It’s important to note that my determination of ‘fit’ is quite different if I am looking for casual jeans versus dress pants, capris versus straight leg, and so on.

What’s more, what if someone says, “Those pants didn’t fit: I could not get them zipped,” or “They were too baggy and need to be hemmed.” All legitimate reasons to leave them at the store; all perfectly understandable iterations of ‘fit’.

“Finding the perfect fit” seems to be a very fundamental (and sought after) part of daily life, which is why I am always surprised by higher ed’s overall reluctance to talk about fit when it comes to the college search process.

We talk candidly about academic fit: We use test scores, GPAs and class rankings to measure the fit of a student’s academic ability to the rigor of the university. We talk about personal fit when looking at campus location and environment. But we often ignore the most relevant (and important) conversation about financial fit.

Ignoring financial fit won’t make it go away

There are limited conversations about the ability to pay for a given school, and there are absolutely no tools to determine a sustainable funding plan across the entire degree. When affordability conversations do happen, they typically occur well after a student has been sold on the unique college and academic experience of a given school.

Students have already fallen in love with and envisioned themselves as part of the college community before we send out offer letters and introduce them to their funding options. Most often, aid offices are not empowered to initiate financial fit conversations, which lends to the fact that finances are the number one reason why students are forced to leave school every year.

With more financial aid offices reporting to enrollment management, one would assume a more holistic view and emphasis on balancing enrollment and retention. Only 55% of four-year students report they know how they would pay for the next semester. This is a tragedy that can be decimated if we openly embraced conversations about financial fit.

What is financial fit?

Financial fit is about much more than a price tag, debt incurred or wage metrics. Financial fit reflects a student’s ability to clearly understand how much school will cost and if they have a sustainable way to pay.

This plan should align with the student’s appetite and perceived value of the funding options available compared to the potential return on investment for the education they will receive. As part of financial fit for the college investment, it is crucial to understand the appetite for risk and fund accordingly. For example, employment and wage outcomes for previous graduates may impact the decision about how much debt a student is willing to take.

Nearly one in three students who do not enroll in college say they thought they couldn’t afford that school. How are they reaching that conclusion? With a growing misperception about college funding, it is highly likely that many of these students do have funding options, they just do not know or understand them.

I have counseled countless students who walked into my office and said, “I am not eligible for financial aid.” Upon closer inspection, the student did not receive a Pell grant, but they had funding options available to them.

For those who make it past initial affordability perceptions, an additional 20% of students who leave school say it was due to finances. This aligns with the fact that 57% of four-year college students say they would have difficulty accessing $500 should it be needed. This forms a chasm for students, especially those from low-income families. Causes could be as simple as non-renewable funding, a missed state grant deadline, an increase in incidental expenses or a minor financial hiccup that impeded the student’s ability to stay in school. If we really want to move the needle on degree completion, we need to stop being afraid of conversations that would help us do just that.

How do we change our mindset?

There are two reasons why financial aid pros often shy away from conversations about financial fit. The first is the inevitable fact that colleges are in the business of enrolling and graduating students. And when too much weight is placed on enrollment and not enough on graduation, traction to address these issues can be difficult.

Often, leadership is wary of introducing any conversation that may dissuade a student from enrolling. Some view enrollment goals and conversations about financial fit as forces that work against each other. But in the current system, we ignore the single greatest conversation that impacts retention, stress and even academic success — finances. Instead, we create a reactionary force against students in crisis.

Why not flip the narrative and show a true commitment to student completion by proactively discussing holistic financing with students and families?. That way, we’re doing our part to ensure they have a sustainable plan that will lead to completion.

The second barrier to these conversations is fear of perception.

Education should form a bridge out of poverty for students. No one wants to be seen as the institution or the counselor who tells a student they cannot afford to attend their dream school.

There is a line of thinking that suggests talking about cost and affordability discourages low-income students from enrolling. That’s absolutely not the case.: It is the most financially inexperienced and needy students who benefit the most from these conversations.

The discussion about financial fit does not mean only wealthy students need to apply: Instead, having thoughtful discussions about financial fit provides resources and opportunities to students who may not otherwise have them. As part of these conversations, there should be education about funding options and renewal criteria, discussions about loans and repayment plans, scholarships, state grants and work-study.

Funding a college degree can be every bit as complex as creating a sustainable retirement plan. There is a reason behind the popularity of financial planners when making life-long investment decisions. This planner considers how much someone must invest, their age, and the risk profile of the investor — much the same way we need to think about the financing of college.

Future conversations may become even more complicated as new funding options, like income share agreements, are in play. But students who are already overwhelmed by a complex funding process may be better served by a proactive, guided conversation led by a seasoned funding professional.

So start the conversation: You, your students and your college will be better off because of it.

Amy Glynn is the VP of Student Financial Success at CampusLogic where she works to eliminate the challenges students face financing college.

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