Hearing Focuses on College Costs and Value Transparency

Following up on its recent request for information on college cost and value transparency, the Senate Committee on Health, Education, Labor, and Pensions (HELP) held a hearing exploring price transparency, value transparency, financial aid offers, and informed borrowers.

In opening remarks, Senator Bill Cassidy (R-LA), chair of the HELP Committee declared, “College is one of the largest financial investments many Americans make, but students have little information to inform their decision.” Sen. Cassidy went on to call on Congress to pass the College Transparency Act, improve net price calculators, and standardize financial aid award letters.

While witnesses generally agreed on the need for greater transparency, they differed in their view of the underlying problems and potential solutions.

For example, Justin Draeger, senior vice president for affordability at Strada Education Foundation, sought greater clarity on award letters, testifying that college pricing is too complex to understand and that surveys show that consumers believe college is unaffordable yet overestimate costs.

Preston Cooper, senior fellow at American Enterprise Institute, maintained that increases in federal aid drive rising tuition costs and suggested more radical reforms, including requiring standard award letters, four-year price guarantees, and binding net price calculators.

While agreeing that standard definitions and content are important, Brenda Hicks, director of financial aid at Southwestern College, was skeptical of federal efforts to standardize net price calculators or award letters. She explicitly stated that it was critical for institutions to have the flexibility to customize award information for specific populations, noting that a “uniform financial aid offer may be efficient, but it won’t be effective.”

Citing the declining purchasing power of the Pell Grant and non-tuition costs like food and housing, other witnesses argued that financial transparency is essential but that the true barrier to accessing higher education is affordability.

For more information, please contact:
Jody Feder