New study calls on colleges to draw back curtain on indirect expenses

A new report reveals wide variation in how institutions of higher learning calculate and communicate indirect expenses, such as off-campus housing, transportation, school supplies, laptops, and food beyond college meal plans, to prospective and current students and their families. For the study, uAspire, a Boston-based nonprofit organization devoted to college affordability, examined cost information listed on 820 college and university websites across five states—California, Massachusetts, New York, Pennsylvania, and Texas. Researchers also collected accounts from 105 students and 20 higher education administrators, including financial aid specialists. 

UAspire researchers were unable to find indirect costs on 39 percent of the college and university websites. Of the websites that provided information on indirect costs, some offered extensively itemized lists while others supplied outdated or ambiguous terminology and wildly different estimates for indirect costs. “In Boston, New York City, and Philadelphia, colleges just a few miles apart provided indirect expense estimates that differed by $8,000 or more, whether for on-campus, off-campus, or commuting students,” the study notes. 

These gaps reflect inconsistency in the methods institutions use to gather cost information, Inside Higher Ed reports. Financial aid administrators who participated in the survey reported “receiv[ing] little guidance on how to make calculations” and pulling data from student surveys and local research to draw up estimates. The report also suggests that institutions may use low-end estimates to look more attractive to potential students. 

Inconsistencies complicating students’ budget planning

Students, meanwhile, reported being confused by the varying terms used to explain indirect costs—including “incidentals,” “board,” and “other.” For example, researchers found 61 different terms to describe housing and food, 31 for transportation, 30 for books and supplies, and 52 for personal expenses. One student from the survey openly shared, “I have no idea what supplies means.”

Without clear, accurate information, prospective and current students often struggle to create realistic budgets for college, make plans to borrow funds, or attend college at all. 

“I wanted to know what I was awarded and what it goes for,” one student said during a focus group when talking about the confusion around their financial aid package. “Is it my classes? My books? My computer? What is it covering? What specifically do I need to have?”

Overall, more than half of the students who participated in the survey reported spending more on indirect costs than they had originally expected. Nearly 90 percent of surveyed students said they were stressed at least once or twice every semester about affording these elusive costs. Ultimately, this stress compounds in ways that can compromise students’ ability to complete their degree. 

Moreover, unforeseen expenses further exacerbate issues such as food insecurity for students, who in turn, change their eating and food shopping habits to get by. Asked what they do when facing unexpected indirect expenses, more than 50 percent of students reported cutting back on social activities and food buying habits; more than 40 percent said they worked more hours and avoided purchasing some textbooks needed for their courses. 

Related: COVID-19 intensifying college students’ housing, food insecurity

Laura Keane, chief policy advisor at uAspire and co-author of the report, told Diverse Issues in Higher Education that students are looking for as much transparency as possible from their institutions. “They have more control to squish in a small apartment or commute differently or forgo, unfortunately, education materials or books for one class versus another. They want a sense of what’s being included in those estimates and in what ways.”

Rep. Ayanna Pressley (D-Mass) teamed up with uAspire to present the report’s findings and recommendations, which include increasing need-based and emergency aid, providing funding specifically for indirect expenses, establishing requirements for making information on indirect costs accessible and transparent, and using standardized terminology for non-tuition related costs. 

“For too long, so many students and their families have been forced to navigate confusing and often inaccessible financial aid in higher education systems, a system that too often leaves our most vulnerable students behind,” Pressley said, according to an article from the National Association of Student Financial Aid Administrators.

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