Read the transcript of this video below:
Matt Carpenter, College Aid Pro and College Aid Professionals here, today we’re pointing out reason 5351 why you should always, as parents of students, be working with a professional as you’re navigating through this college financial aid process. Colleges make mistakes.
These mistakes happen all the time at a whole bunch of different colleges on a daily basis. UMass Amherst is one of the best public institutions in our country, for Massachusetts residents, especially for the middle class and upper-middle-class, and wealthy families. I think it’s the best of the best bang for your buck. So, in short, I’m a gigantic fan.
However, just like anybody or like any business, or any institution, they are not perfect. We’ve had a great example of that today.
Financial aid award letters were sent out to all accepted students in the Class of 2020, the graduate college class 2024. Those that were offered loans of $5500 that everybody that completes a FAFSA is entitled to, it is indicated that the rate for the unsubsidized loan is 6.08%.
Now, this is a fairly significant mistake, because, in fact, that rate is 4.53%. It’s about a one and a half-point difference, which is very significant for most families. When we followed up with the financial aid office, we got some responses back that was pretty surprising. It was indicated that it was a variable rate, which is simply incorrect. This rate will change again on July 1, for next year, but it’s very, very unlikely that it will approach 6.8%.
The second issue was stated that private loans were at 8%. Private loans ranged from about 4% to about 15%. Again, just an honest mistake but misleading.
My point is, it’s so important that you have the right information. As advisors and as families, we’ve got to make sure that we are working with people that know exactly what we’re talking about when these important decisions are being made. Now, again, we’re we’ve brought this to UMass’s attention and they’re getting it corrected.
They’ll let the families know that have already been awarded that this was a mistake and they’ll have it fixed for everybody that gets an award from this point forward.
Everyone is allowed honest mistakes, it is up to us to be sure they’re caught and that everyone is making the right decisions.