Feb. 5 (Bloomberg) -- Yale University, the University of Pennsylvania and Sacred Heart University are among colleges clarifying the application process for federal financial aid after a congressman said some students are being misled into paying unnecessary fees.
Elijah Cummings, a Maryland Democrat, asked the Education Department to examine more than 100 colleges -- including most of the Ivy League -- for possible violations of U.S. law. He said some schools are failing to inform students applying for federal grants and loans that they only need to use a free form known as Fafsa.
More students are seeking financial aid as the cost of higher education continues to rise faster than the rate of inflation. Outstanding student-loan debt has climbed to $1.2 trillion. Besides federal aid, many colleges offer their own grants and hundreds of them require applicants to submit a fee-based form -- the CSS Profile -- to determine eligibility. That’s where the confusion lies.
“We’ve always been an advocate for students, never wanting them to pay for anything that is unnecessary,” said Julie Savino, executive director for financial aid at Sacred Heart, one of at least four colleges that made clarifications on its website this week. “All of us want to provide the best information we can, and we found places where we can update this and we did it to make it clearer.”
Sacred Heart, in Fairfield, Connecticut, was singled out in Cummings’s letter, because of a website reference that said applicants need to submit the CSS Profile for any type of aid.
Savino said that reference appeared on the school’s “net price calculator” page, which lets families input financial data to see what kind of scholarships a student might receive. The reference was meant to remind students that if they want to apply for a school award, they must submit the Fafsa and the CSS Profile, she said. The Web page now says that the free form is needed to determine federal and state aid, while the CSS Profile is for eligibility for institutional grants and scholarships.
The CSS Profile is a product of the College Board, a New York-based nonprofit group that also owns and administers the SAT test. It costs $25 to send the form to one school or scholarship program and additional reports are $16, according to the College Board, whose members include universities.
Cummings’s inquiry evolved over the past few months as Democratic staff on the House Oversight Committee, of which he is the ranking member, reviewed more than 200 colleges that use the CSS Profile.
“The intent of the Higher Education Act is to make it easier for students to apply for financial aid,” Cummings said in a statement. “But we have found that many colleges and universities are making this process more complicated and costly, and may be potentially violating the law.”
Colleges use the profile, which asks more detailed questions than the federal form, to get a fuller picture of a family’s financial situation including home equity and retirement funds.
Students can get fee waivers for the application and for reporting to as many as eight schools. Qualifying students must meet the guidelines of the Department of Agriculture Free and Reduced Price Lunch Program and have few major financial assets, according to the College Board.
For a family of four, that equates to annual parental income of about $40,000 or less, assets -- not including the home -- of about $30,000 or less, and a home equity value of less than $100,000, according to the College Board.
The University of Pennsylvania, one of eight northeastern schools that make up the Ivy League, says that students interested only in federal financial aid are encouraged to submit only the free Fafsa form, said Ron Ozio, a spokesman for the school in Philadelphia.
“To be certain there is no further misunderstanding, we have reworked the language on our website to make this more clear,” Ozio said in a statement. Penn requires additional documentation for direct aid from the university.
Bucknell University in Lewisburg, Pennsylvania, also made changes to its website to make clear that students don’t need the CSS Profile for federal financial aid, said Bill Conley, vice president for enrollment management.
Some of the wealthiest universities in the country are among the 111 colleges cited in Cummings’ letter, including Harvard, Yale and Northwestern.
Harvard, which waives the cost to use the Profile for low-income students, “will continue working to ensure that our students have the clear guidance they need to access the federal and Harvard-funded aid to which they are entitled,” said Jeff Neal, a spokesman for the Cambridge, Massachusetts-based school.
Yale, which also waives the cost, added language to its Web page to specify that students only need the Fafsa form to apply for federal aid, spokesman Tom Conroy said in an e-mail. Northwestern will review its site to see if additional language is needed, Alan Cubbage, a spokesman, said in an e-mail.
Princeton University, the only Ivy League school that wasn’t listed in Cummings’s letter, created its own free supplemental form in 2001 “to improve access and make it easier to apply,” Robin Moscato, director of undergraduate financial aid, said in an interview.
“Paying to apply for financial aid seemed to be counterintuitive,” she said.
To contact the reporter on this story: Janet Lorin in New York at email@example.com
To contact the editor responsible for this story: Lisa Wolfson at firstname.lastname@example.org