10 Colleges Will Provide Cost and Financial-Aid Information to Incoming Students

June 05, 2012

Ten colleges, universities, and systems have committed to presenting certain cost and financial-aid information to incoming students as part of their aid awards starting in 2013, the White House announced on Tuesday.

The institutions will provide information on what one year of college will cost, the financial aid available to help pay for it (with a clear distinction between grants and loans), the net cost after grant aid is included, estimated monthly payments for federal loans, and their students' retention, graduation, and loan-default rates, according to a White House news release.

Leaders from the participating colleges met on Tuesday with Vice President Joseph R. Biden Jr., as well as with Arne Duncan, the secretary of education, and Richard Cordray, director of the Consumer Financial Protection Bureau. Some but not all of the college presidents and chancellors had also attended a meeting about college affordability with President Obama in December.

Helping students compare their potential costs builds on President Obama's higher-education policies, said Nancy L. Zimpher, chancellor of the State University of New York system, who cited his efforts on college costs and completion. Mr. Obama is pushing Congress to prevent the interest rates on subsidized Stafford loans from doubling, as scheduled, on July 1. And he plans to sign on Thursday a memorandum of understanding committing his administration to explore ways to help students understand their loan-repayment options.

Ms. Zimpher attended the December meeting, and the SUNY system has signed on to present the cost information. "Students shop their higher-education options anyway," Ms. Zimpher said. "They just don't have enough data."

And colleges should care, Ms. Zimpher said. Student-loan defaults are a real problem, she said, and giving students better information upfront could help avoid them.

Tuesday's meeting was valuable because "we had the opportunity to explain the nuances of all of this to the administration," said Holden Thorp, chancellor of the University of North Carolina at Chapel Hill. Providing students with good information on college affordability is a challenge, Mr. Thorp said, and some higher-education leaders worry that if the data are presented in a standard format that is too simplified, it will actually add to students' confusion.

Consumer advocates have long argued for a standardized aid-award format, saying that the current award letters are difficult for students to compare or even decipher.

"We have heard from thousands of borrowers who tell us they simply didn't understand what they were signing up for," Mr. Cordray said at a news conference after the meeting. "Many took out private loans. Some resorted to credit cards. All too often, borrowers got in over their heads."

'A No-Brainer'

The Education Department is working at Congress's direction to come up with a model aid-award letter, and the Consumer Financial Protection Bureau has released a draft "shopping sheet," to start the conversation on what that model format might look like. The Obama administration has previously proposed requiring all colleges to use such a shopping sheet.

About half of Tuesday's meeting was devoted to discussing how the shopping sheet could be improved, said Catharine B. Hill, president of Vassar College. The rest of the conversation was broader, she said, touching on issues of access and affordability.

The sense in the room was that "if we come up with a sensible sheet, it would be a no-brainer for schools to use it," Ms. Hill said.

The shopping sheet would make the cost of college transparent, Mr. Duncan said at the news conference following the meeting. "This is frankly not rocket science," he said. "However, I think it is a triumph of common sense."

The National Association of Student Financial Aid Administrators agrees that the letters should be improved, but has argued that they should not be standardized because colleges should be free to decide the best way to communicate with students they have admitted. The group recently released its own recommendations for improving award letters.

The association's president was positive about Tuesday's announcement, however. "We're very supportive of the efforts by the White House to include colleges in the discussion," said Justin Draeger, the president.

The fact that participating colleges are committing to display common elements, but aren't signing on to a certain format, shows that "comparability is only one component of the overall award letter," Mr. Draeger said. The real point of a letter, he said, is for a college to let an admitted student know of options for paying its bill.

Mark Kantrowitz disagrees. Mr. Kantrowitz, who publishes the consumer-information Web sites FinAid and Fastweb, argued that students would not be able to compare their options unless all colleges were required to use the same format. And, he said, "momentum is building for adoption of a standardized format."

The announcement that a handful of institutions would display certain information is a long way from that. Still, Mr. Kantrowitz thought it could help. "It's a first step," he said. "It's peer pressure."

The other institutions that have agreed to present the cost and aid information are: Arizona State University, Miami Dade College, North Carolina A&T State University, Syracuse University, the University of Massachusetts system, the University of Texas system, and the University System of Maryland.

Kelly Field contributed to this article.