White House Calls on Colleges to Adopt Clear College Cost and Financial Aid Disclosures
June 05, 2012
The White House is calling on all college and university presidents to provide incoming students with clear and easy-to-understand college cost and financial aid disclosures.
On June 5, 2012, Vice President Joe Biden, Secretary of Education Arne Duncan, Director of the Consumer Financial Protection Bureau (CFPB) Richard Cordray and Domestic Policy Council Director Cecilia Muñoz hosted a roundtable with presidents of ten leading colleges and universities who have agreed to provide incoming students with transparent and accessible information about college costs and financial aid starting with the 2013-14 school year.
Last fall the Obama Administration posted a draft version of its Financial Aid Shopping Sheet for public comment on the CFPB’s Know Before You Owe web site. This model financial aid award letter was developed by the US Department of Education in partnership with the CFPB, as required by the Higher Education Opportunity Act of 2008. The US Department of Education will release a revised version of the Financial Aid Shopping Sheet this fall after incorporating more than a thousand public comments. (Public comments will continue to be accepted through June 20, 2012.)
The Financial Aid Shopping Sheet provides families with clear and concise information to help them make informed decisions concerning the tradeoffs between college affordability and other criteria for choosing a college. “While a quality higher education remains a sound investment, students and families need to clearly understand the costs and benefits of each college they’re considering so they can easily compare choices and identify the best value prior to enrolling,” according to a statement released by the White House.
The Financial Aid Shopping Sheet will include the following information:
- The student’s total cost of attendance for one year of college.
- Information about the financial aid available to the student to cover college costs, with a “clear differentiation between grants and scholarships, which do not have to be repaid, and loans, which do.”
- The student’s net cost after subtracting grants and scholarships from the cost of attendance.
- An estimate the student’s likely debt after graduation and the monthly loan payments associated with that debt.
- Data concerning college quality and student outcomes, such as retention rates, graduation rates and loan repayment rates.
The colleges and universities that have committed to providing improved college cost and financial aid disclosures include:
- Arizona State University
- Miami Dade College
- North Carolina Agricultural & Technical State University
- State University System of New York (64 colleges, universities, and community colleges)
- Syracuse University
- University of Massachusetts System (5 universities)
- University of North Carolina at Chapel Hill
- University System of Maryland (12 universities)
- University of Texas System (9 universities)
- Vassar College
Momentum is building for the establishment of a mandatory college cost and financial aid disclosure. On April 27, 2012, President Obama signed an executive order requiring colleges that accept Tuition Assistance and GI Bill money to provide military and veteran students with the Financial Aid Shopping Sheet. Senator Franken (D-MN) introduced bipartisan legislation on May 24, 2012 to establish a standardized financial aid award letter similar to the Obama Administration’s proposal and to make the standard mandatory.
Mark Kantrowitz is a nationally-recognized financial aid expert. He testified before the Advisory Committee on Student Financial Assistance in March 2011 and a U.S. Department of Education meeting in September 2011 about the need to standardize financial aid award letters. He has written articles about standardizing financial aid award letters for the Council on Law in Higher Education, Inside Higher Ed and Higher Ed Watch. Mark also wrote Fastweb’s Quick Reference Guide to Evaluating Financial Aid Award Letters and developed FinAid’s award letter comparison tool.