NAICU Washington Update

Too Much (Bad) Information

May 14, 2012

Consumer information is the newest frontier in the national conversation on college affordability.  Recently the administration offered three new tools:

  • The College Scorecard:  This tool, developed for students choosing a college, will be posted on the "College Accountability and Transparency Center" of the Department of Education's College Navigator website.  The proposed form for the scorecard is now on line, and viewers may offer comments. 
  • "Know Before You Owe" Shopping Sheet:  This form, by the new Consumer Financial Protection Bureau (CFPB), is intended as a tool for students to compare financial aid offers.  It also provides cost, graduation, and default rates.  A preliminary version is on line, and users can offer comments.
  • "Paying for College" Cost Comparison Worksheet:  This most recent - and controversial - is also produced by the CFPB.  You can try out a beta version of the worksheet on line.

In NAICU's view, all three of the tools have problems, and the association encourages members to weigh in via the comment section on each site. 

The major problems with the College Scorecard (see earlier Washington Update story) include:

  • In making comparisons, it's not clear how "similar types of students" will be defined (although the Department is conducting a Technical Review Panel, in which NAICU will participate, to help decide the comparison groups)
  • The graphic presentation of time-to-graduation shows a six-year rate for full-time students, whereas a four-year rate would be more appropriate for such students
  • There is no reliable source of information about loan debt or earnings potential. 
  • Most importantly, the message underlying the one-pager is that the purpose of higher education is to get a job that earns a lot of money.

The "Know Before You Owe" shopping sheet, in its preliminary version, is confusing because it's similar to - but not the same as - the College Scorecard.  In asking "how to pay for college," it seems to imply that a combination of federal aid and private loans are a student's only options; there are no mention of savings, parental contributions, or work.  The comparisons on the lower right side of the form (see PDF for detail) are misleading - particularly because all four-year private schools - non-profit and for-profit alike - are lumped into the same category.       

The "Paying for College" college cost comparison worksheet has received a great deal of negative criticism by colleges because the CFPB recently went live with a beta version of the new tool.  It's intended to allow users to instantly compare the cost of, and debt incurred in attending, three different colleges.  Well, almost.  It turns out, the cost comparison worksheet is rife with problems.

First, commonly-used student aid terms take on new meanings on the website.  For example, the college "sticker price" provided -  which in common parlance usually means tuition - is actually the figure for the total cost of attendance.  Adding to the confusion, some numbers refer to annual amounts and others to total undergraduate amounts.  Also pointlessly confusing is a translation of total student debt into the number of $50 textbooks per month that debt would equal.  And then there are the drop-down menus in the fields for entering colleges - entering the first few letters of "University" first brings up the University of Phoenix, followed by Kaplan University. 

The common response of NAICU member presidents who have tested the site is, "Where did they get this data?"  No one is quite sure - not even the Department of Education, which is not commenting on the problem.  Many users have provided feedback and recommendations through the CFPB site for improving the cost comparison worksheet, but it seems to have made little difference. There was a glimmer of hope in early May, when the site was briefly taken down.  But it since has appeared again, with no improvements made.

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