NAICU Washington Update

Administration Pursues Standardizing Student Aid Award Letters

June 12, 2012

In its continuing effort to provide students with comparable student aid information, the White House recently held a meeting with presidents and senior officials of ten colleges and university systems, including Syracuse University and Vassar College, to explore standardizing the information they provide to students in their financial award letters. Administration officials attending the June 5 session were Vice President Joe Biden, Secretary of Education Arne Duncan, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray, and White House Domestic Policy Council Director Cecelia Munoz.

The recent emphasis on transparency and disclosure grows out of the administration's concerns about college cost and student debt.  Also, Lawmakers - aware that students have trouble evaluating student aid packages from different colleges - mandated in the Higher Education Opportunity Act of 2008 that the Department of Education review this issue.

More recently, the newly-formed CFPB also has joined the administration's college disclosure efforts with a highly-criticized beta version of a "cost comparison tool" that appeared to have been developed with little input from the Department of Education or colleges.  While a proposed format is still posted on the CFPB site, the interactive comparative function is no longer available, and the bureau is no longer accepting comment on it.  CFPB also has released a "Know Before You Owe" shopping sheet that is still open for comment.

The ten institutions represented at the June 5 meeting have volunteered to provide their students with information on the items covered in the shopping sheet, in an easy-to-understand - though not necessarily identical - format prior to the students' making their college choice and financing decisions.  The information to be provided, starting with the 2013-14 academic year, encompasses what the White House considers the key elements of the still-evolving CFPB shopping sheet, including:

  • How much one year of college will cost
  • Financial aid options, distinguishing clearly between grants and loans
  • Net cost after grants and scholarships are taken into account
  • Estimated monthly payments for the federal student loans the individual student would likely owe after graduation
  • Comparative information on enrollment, graduation, and defaults.

Schools may comment on the shopping sheet until June 20, 2012, via the CFPB website.

Several members of Congress have introduced legislation that would mandate a model student financial aid letter including information parallel to the shopping sheet, but also requiring additional information and explanations.  Legislation would make the form mandatory, but clearly the administration is working to achieve a degree of compliance regardless of congressional action..

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