New financial aid form lets students compare college costs
WASHINGTON — The Obama administration on Tuesday released a version of a financial aid award letter that will allow students to better compare college costs before deciding where to enroll.
The so-called shopping sheet is a one-page, standardized form that the administration hopes public and private colleges will adopt so that students can make side-by-side comparisons of estimated annual costs, potential loan payments after graduation, and an institution’s graduation and loan default rates.
“So many students I meet across the country don’t really understand how much debt they are in until the first bill arrives, and that’s far too late and simply not fair,” Education Secretary Arne Duncan said. “This is an easy-to-use form that standardizes information parents use to make smart educational choices and makes the true cost of higher education far more transparent.”
Duncan released an open letter to college and university presidents asking that they start to use the forms for financial aid packages beginning in the 2013-14 school year.
The shopping sheet was developed with the federal Consumer Financial Protection Bureau, which was created in 2010 in the wake of the financial crisis, in part to educate consumers.
The bureau’s director, Richard Cordray, said many college financial aid forms are laden with jargon and use terms that differ in meaning from institution to institution. Meanwhile, the costs of higher education are spiraling upward and more students are in debt. Outstanding student loans have surpassed the trillion-dollar mark, and defaulted student loans total more than $8 billion, he said.
At California’s public universities, students have seen tuition and fees soar as state funding support has declined in recent years. Both the University of California and California State University systems said transparency and accountability were paramount, but they are still considering whether to use the forms.
The UC system already widely disseminates information about tuition and costs, but Carolyn Henrich, director for education at the UC Office of Federal Governmental Relations, said the campuses could easily format their information to fit the shopping sheet.
CSU campuses also offer similar lists on their websites that prospective students can refer to when deciding on colleges, said CSU spokesman Mike Uhlenkamp.
“I don’t know if we would do a wholesale change, because a lot of the information we now offer is specific to our universities and we feel ours is a little bit more comprehensive,” Uhlenkamp said.
Other colleges indicated they did not have plans to reevaluate their financial aid forms.
“We’re proponents of transparency in the financial aid process and don’t anticipate major changes to our current award letters,” Karen Cooper, director of financial aid at Stanford University, said in an email.
But State University of New York Chancellor Nancy Zimpher, whose school system is one of 10 so far that has agreed to implement the new form, said the administration’s efforts put “colleges and universities on a path toward providing students with a complete and comparable college costs outlook.”
The new form will contain individualized information for students, including estimated costs of tuition, books, housing and transportation; grant and scholarship aid; and payment options. The form also includes information on graduation rates, loan default rates and median federal borrowing.
Rivera reported from Los Angeles and Goldberg from Washington.
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