Ed Dept. Offers a ‘Shopping Sheet’ for Understanding College Costs
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Called the Shopping Sheet, it will list or lead to information on the loans, grants, expected earnings through work-study programs, institution student-loan default and delinquency rates, and a slew of other cost-related details that the White House says will allow families to make better decisions on which school a student should attend.
“Students need to know how much their loans are ultimately going to cost when all the interest and fees and other costs are factored into the equation,” Richard Cordray, director of the Consumer Financial Protection Bureau, said during a press conference yesterday. “We are standing up for a simple and sensible concept: Students should know before they owe.”
Added Secretary of Education Arne Duncan during a press call with reporters: the Shopping Sheet is designed to “[unravel] the mystery of college costs.”
Adopting the standardized form is mostly not mandatory, which would require an act of Congress. An April executive order requires schools that enroll students who are paying their way with military benefits to issue those students a Shopping Sheet—but only those students. Still, advocates for more transparency in reporting the true price of attending a postsecondary institution welcome the new document. The sheet distinguishes grants and scholarships from loans, an important distinction because many families assume loans are part of the financial aid package students do not have to pay back, Mark Kantrowitz, publisher of the FinAid and Fastweb websites, said in an interview. Loans “are not characterized as reducing the price,” Kantrowitz said, a big departure from previous explanations of a student’s aid package. Also new is an estimate of how much students will owe monthly before those loans are paid off.
Previous efforts to elucidate the true cost of college were rough estimations at best, according to many college access experts. Last year, the administration rolled out the Net Price Calculator tools that required colleges to publish a summary of costs that the student could then use for comparisons to find the most affordable institution. But “there are some teething pains” with that tool, Kantrowitz says. The schools that use the calculators do not use the same set of data: Some schools rely on information that’s two years old, the layout of the information is not standardized so a line-by-line comparison for different colleges can be difficult, and the information the colleges use vary as well.
Lauren Asher, president of The Institute for College Access & Success, a non-profit that advocates for increased funding opportunities for students entering college, supports the Shopping Sheet, and in general feels that reporting of college costs has become more variegated. The “interest and coverage of student debt is indicative of the changing way American students are expected to pay for college,” she said.
She and Kantrowitz encourage reporters to also spend less time writing about bachelor’s degree holders with six-digit debt. Less than one percent of bachelor’s holders shoulder such a burden, according to Kantrowitz. “On the whole, people graduate with affordable debt levels,” he said.
Federal legislation to better inform families what they are getting into financially has been slow-moving. Sen. Al Franken’s (D-Minn.) “Understanding the True Cost of College Act of 2012” would essentially make mandatory the Shopping Sheet, with minor differences. Introduced in May, the bill is still in committee. Sen. Ron Wyden (D-Ore.) earlier in 2012 introduced a bill that would ask colleges to disclose the average salaries of its alumni and the debt they accumulated. It is also stuck in committee.
In previous years, universities have pushed hard against databases that would peg degrees to debt levels and salaries. “It’s the first step to government getting involved in curriculum,” Kantrowitz said. “If you can see what the debt is, then you start asking which programs are most cost effective.”
Earlier today, Duncan released an open letter to college leaders urging them to sign on to the Shopping Sheet. The sheet is expected to go live by the 2013-2014 school year. Already 10 higher education institutions and university systems have agreed to use this new sticker price model, including the public university systems in New York, North Carolina and Texas. Those 10 schools have a combined enrollment of roughly 1.7 million students.