Financial Aid officers, economists, and parents talk about the price of an education and paying for college using a different vocabulary and often contradictory concepts. As a result they each believe their discussion of financial aid is precise and clear, but they really do not understand each other. For example, financial aid officers use a word like "need," which has dual meaning in its own office when used in a phrase like "need-based aid" or "need blind admissions." Neither meaning is well understood by parents who all may feel they have a "need" for help in paying their child's college education, and economists have used the word “need” differently that either financial aid officers or parents.
As a consequence, college administrators have difficulty validating the effectiveness of their financial aid expenditures or convincing the public that their payment requirements are equitable and fair. The solution is a new "Language of Payments" that uses an easily understood vocabulary replicated in every day speech yet precise in definition for the rigors of research and policy analysis.
The language of financial aid requires clarification and precision. The various words that college professionals use to explain price should be reduced to about four or five concepts that are easily explained on a web site and accurate for income bands for families. This approach is consistent with the implementation of the Higher Education Opportunity Act and the 2012 State of the Union address while the language of financial aid professionals requires additional attention. The presentation below addresses this issue by translating the words and concepts currently in use to nomenclature that the public is likely to use in thinking about other financial transactions like buying a home or purchasing a car. It also focuses on the difference between the everyday speech of college administrators and the everyday speech of families and students preparing to apply to college.