New financial aid form to help students, families chart college costs
The Obama administration on Tuesday released a version of a financial aid award letter that it said will allow students to better compare college costs before deciding where to enroll.
The so-called “shopping sheet” is a one-page, standardized form that the administration hopes public and private colleges will adopt so that students can make side-by-side comparisons of total estimated annual costs, potential loan payments after graduation and an institution’s graduation and loan default rates.
“So many students I meet across the country don’t really understand how much debt they are in until the first bill arrives, and that’s far too late and simply not fair,” U.S. Secretary of Education Arne Duncan said during a telephone press briefing. “This is an easy-to-use form that standardizes information parents use to make smart educational choices and makes the true cost of higher education far more transparent.”
The shopping sheet was developed in coordination with the federal Consumer Financial Protection Bureau, which was created in 2010 in the wake of the financial crisis to educate consumers and enforce consumer financial protection laws.
The bureau’s director, Richard Cordray, said many college financial aid forms are laden with jargon and use terms that differ in meaning from institution to institution. Meanwhile, the costs of higher education are spiraling and more students are in debt: Outstanding students loans have surpassed the 1 trillion dollar mark, and defaulted student loans total more than $8 billion, he said.
President Obama has been urging states, including California, to curb education costs as part of his national goal of leading the world with the highest share of college graduates by 2020.
But students attending California public colleges have seen tuition and fees soar as state funding support has declined.
Funding for Cal State’s 23 campuses and the University of California's 10 campuses is about $1 billion lower than in 2008-09. In the previous fiscal year, both systems took a $750-million hit, while funding for the state’s 112 community colleges has been cut by $809 million, or 12%, since 2008-09.
Additional cuts to all three systems loom if a tax initiative proposed by Gov. Jerry Brown for the November ballot fails to win voter approval.
The new form will contain individualized information for students, including estimated costs of tuition, books, housing and transportation, grant and scholarship aid, and payment options. The form also includes information charting graduation rate, loan default rate and median borrowing of federal loans.
Although use of the form is not mandatory, Duncan said many schools have already signed on; and he planned to release an open letter Tuesday to college and university presidents asking that they adopt the forms for financial aid packages beginning in the 2013-14 school year.
-- Carla Rivera