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Here's how to break down your college financial aid award letter

The following article is from CNBC

February 12, 2020

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Getting into college is one thing. Figuring out how to pay for it is another.

Price has become a growing consideration among students and parents. Now, financial concerns govern decision-making for nearly 8 in 10 families, according to education lender Sallie Mae, outweighing even academics when choosing a school.

At the same time, most students and their parents pay only a fraction of the total tab, even as college costs continue to rise.

In addition to income and savings, more than 8 in 10 families tap scholarships and grants — money that does not have to be repaid — to help cover costs. More than half of families borrow, with both parents and students taking out loans, Sallie Mae found. (See Sallie Mae's chart below.)

CNBC

That's why so much hinges on the financial aid award letter. However, it can be difficult to understand what that missive means to your bottom line.

To get a better sense of what you'll pay out of pocket for higher education, here are the do's and don'ts to deciphering college aid.

Don't compare apples to oranges

For starters, while it may seem obvious, some schools just cost more than others. Therefore, what may look like the largest offer might not be the best.

"One school might give you $5,000 more grant aid but their cost could be $8,000 more," said Kalman Chany, a financial aid consultant and author of the Princeton Review's "Paying for College."

Further, not all colleges include both direct and indirect expenses in the total "cost of attendance," or COA, said Jennifer Satalino, a financial aid expert with Educational Credit Management Corp., a nonprofit dedicated to helping student borrowers.

While most schools outline baseline tuition and fees, some might not include "indirect expenses" such as textbooks, meals and transportation. For each school, list out all the costs, including personal expenses, Satalino said, before deducting grants or scholarships.

"You have to look at the net net," Chany said.

Do differentiate free vs. borrowed money

In most award letters, there are often several financial aid options, including grants, scholarships, work-study opportunities and student loans.

If you're having trouble telling the difference between gift aid and loans that will need to be repaid, look for terms like "grant," "scholarship" and "fellowship." Anything else is most likely a loan, Satalino said.

"If you have questions, ask — don't make assumptions," she added.

Even with gift aid, there may be strings attached, such as whether a grant is renewable for all four years or a minimum grade point average that must be maintained. A school that seems more generous initially might offer less funding down the road, Chany said.

If student loans are listed, they will appear to reduce the total cost of attendance. But the reality is that loans always need to be repaid — plus interest.

Don't forget about interest

Studies show that more than half of millennials take on student loans without knowing the interest rate or what their monthly payments will be.

Before borrowing a dime, check whether the financial aid offer includes direct loans, which are need-based and interest-free while a student is in school, or unsubsidized loans, which accrue interest from the outset. "Subsidized is always better," Chany said.

Still, beyond differentiating between subsidized and unsubsidized loans, award letters rarely provide information about interest rates and repayment options.

If you'll need loans to pay for college, Satalino advises that you find out the full costs of your options and then borrow only what is absolutely necessary.

Don't take everything that's offered

To that end, schools will often offer more financial aid than you may need.

As a general rule of thumb, "don't borrow any more than you estimate your first-year earnings will be" once you graduate, Satalino said.

Many people make the mistake of borrowing too much and using student loans to pay for all their expenses, and then they struggle to repay what they owe, she cautioned.

"Only take the amount of financial aid necessary to get through college," Satalino said.

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Explore Career and Technical Education

Learn more about CTE career options and what it means to students.

February 3, 2020

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ECMC dispels financial aid myths as college-bound students receive award letters

February is financial aid awareness month

January 30, 2020

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Minneapolis, MN (January 30, 2020)—February is Financial Aid Awareness Month and also a time when many college-bound students will be receiving award letters outlining financial aid packages from prospective colleges. Educational Credit Management Corporation (ECMC) is dispelling myths for students and families who may need assistance navigating this process.

"Selecting a college is one of the largest financial commitments a person will make in their lifetime," said Paula Craw, vice president of student success and outreach at ECMC. "We want to do all we can to ensure students and families understand the information they receive and make informed decisions."

ECMC, which provides free training and resources focused on financial literacy and college preparedness, is providing insight for students and families to ensure they understand the various types of financial aid available.

Myth #1: My financial aid award letter will show me a clear picture of college costs.
Fact: The total costs of college aren't always clear from the outset. In financial aid award letters, not all colleges include both direct and indirect expenses in the total "Cost of Attendance" (COA). While most schools outline baseline tuition and fees, some might not include "indirect expenses" like room and board, textbooks, meals and transportation. Not knowing how much a full year of college will cost you makes it difficult to put an aid letter in context.

Myth #2: Loans and grants are easily discernible.
Fact: In most award letters, schools outline financial aid options such as grants, scholarships, work-study opportunities and student loans. If student loans are listed, they will appear to reduce the total cost of attendance. But the reality is that loans always need to be repaid—with interest. If you're having trouble telling the difference between gift aid and loans that will need to be repaid, look for terms like "grant," "scholarship" and "fellowship." Anything else is most likely a loan.

Myth #3: Interest on student loans will be included in my financial aid award letter.
Fact: Reports show more than half of millennials take on student loans without understanding what their monthly payments will be—and without understanding interest. However, award letters rarely provide information about interest rates and loan repayment options. If you'll need loans to pay for college, make sure you understand the full costs of your options and borrow only what is absolutely necessary.

Myth #4: I need to take out the full amount of money I'm offered in my financial aid letter.
Fact: Only take the amount of financial aid necessary to get through college. Many people make the mistake of borrowing too much and using student loans to pay for all their expenses, and they struggle to repay what they owe.

In addition to these tips, ECMC offers a free downloadable workbook that features a variety of worksheets and information to help students throughout the college planning process. Opportunities books are available in English and Spanish.

For more information, visit www.ecmc.org/students.

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ECMC Group introduces ECMC Education

New name reflects evolution of nonprofit provider of career and technical education

January 7, 2020

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MINNEAPOLIS—ECMC Group today announced that Zenith Education Group will become ECMC Education. The name change signifies an enhanced collaboration across the ECMC Group family of companies as well as future growth opportunities to support its mission of helping students succeed.

"Our work in the postsecondary education space, particularly in career and technical education, has become extremely robust within the various entities across our organization," said Jeremy Wheaton, president and CEO of ECMC Group. "Given our overall focus, it made sense to change the name to better reflect those synergies."

Zenith Education Group was formed when ECMC Group acquired a number of Corinthian College campuses in 2015, transitioning the schools to nonprofit and enhancing the program offerings to result in better student outcomes. The effort enabled more than 30,000 students to continue their education and resulted in savings for American taxpayers of an estimated $435 million in potential closed school losses. ECMC Group is the parent company to Educational Credit Management Corporation (ECMC) and ECMC Foundation, as well as ECMC Education.

ECMC Education provides oversight and guidance to three reimagined, innovative career and technical schools under the brand of Altierus Career College, where students receive a blended, hands-on and interactive educational experience with holistic support services throughout the student journey, such as integrated professional skills development and emergency financial resources. ECMC Education is also focused on expanding its delivery of educational solutions through employer-driven upskilling programs and technology-enabled learning in innovative school formats.

"We are extremely proud of the work being done on our campuses, particularly the impressive student outcomes that have been achieved," said Todd Steele, president of ECMC Education. "While we remain committed to our original goals of increasing affordability and connecting our students to well-paying careers, we also are extremely focused on increasing educational access by deepening our relationships with business owners, policymakers and community-based organizations so that together we can pioneer new educational delivery methods that benefit our students, their employers and the communities at large."

About ECMC Education
ECMC Education is a nonprofit provider of educational solutions rooted in innovation, employer collaboration and industry stewardship to generate superior learner outcomes. The organization operates schools under the Altierus Career College brand and offers a range of training solutions designed to help learners achieve their educational goals as well as assist employers in solving talent and skill gaps.

About ECMC Group
ECMC Group is a nonprofit corporation with a mission to help students succeed. Headquartered in Minneapolis, ECMC Group and its family of companies provide financial tools and services, nonprofit career education and funding for innovative programs to help students achieve their academic and professional goals. For more information, visit www.ecmcgroup.org.

About ECMC Foundation
ECMC Foundation is a Los Angeles-based, nationally focused foundation whose mission is to inspire and to facilitate improvements that affect educational outcomes—especially among underserved populations—through evidence-based innovation. It is one of several affiliates under the ECMC Group enterprise based in Minneapolis. ECMC Foundation makes investments in two focus areas: College Success and Career Readiness; and uses a spectrum of funding structures, including strategic grantmaking and program-related investments, to invest in both nonprofit and for-profit ventures. Working with grantees, partners and peers, ECMC Foundation's vision is for all learners to unlock their fullest potential. Learn more about ECMC Foundation by visiting www.ecmcfoundation.org and ECMC Group by visiting www.ecmcgroup.org.

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ECMC's Paula Craw appointed to Active Minds board of directors

December 9, 2019

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WASHINGTON D.C.—Paula Craw, vice president of student success and outreach for Educational Credit Management Corporation (ECMC), has been appointed to the board of directors for Active Minds. ECMC is a nonprofit organization focused on helping students succeed through training and resources focused on financial literacy and college preparedness.

"Active Minds is incredibly fortunate to have Paula on our board," said Steve Lerman, Chairman, Active Minds. "Her keen understanding of the intersection of student debt and mental health make her a fantastic addition to our team."

Active Minds, headquartered in Washington, D.C., is a national nonprofit dedicated to changing the conversation about mental health on college campuses. The organization aims to bring suicide and mental health out in the open so that no one struggles alone. Founded in 2003 by Alison Malmon, who lost her brother to suicide, Active Minds is operating on more than 500 college campuses. Campus chapters employ a peer-led approach with students serving as passionate advocates, stigma fighters and educators for mental health.

"The work done by Alison and the Active Minds team is critical, and their mission aligns with ECMC's efforts to help students succeed throughout college," Craw said. "I know firsthand what it's like to lose someone dear to you by suicide. Raising awareness and shining light in darkness for potentially vulnerable college students is incredibly important."

About Active Minds
Active Minds is the nation's premier nonprofit organization supporting mental health awareness and education for young adults. Active Minds has a presence on over 800 college, university, and high school campuses nationwide, and is powered by a robust Chapter Network, the nationally acclaimed Send Silence Packing® exhibit, and inspiring Active Minds Speakers. The organization is dedicated to ending the silence and changing the conversation about mental health for everyone. To learn more, visit www.activeminds.org.

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