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Shopping Sheets Deconstruct Cost of College
In an attempt to address concerns about college affordability and the true cost of college, officials from 10 colleges, universities, and state systems committed in June to greater transparency about cost and student outcomes, climbing aboard the Department of Education’s program to standardize financial-aid information. Now, the department and the Consumer Financial Protection Bureau have joined forces to promote wider use of the model financial-aid award letter, known as the shopping sheet, which participating institutions will begin issuing in the 2013-14 school year to make it easier for students to compare aid packages. Institutional participation in the shopping sheet project is voluntary.
If widely adopted by colleges and universities, these shopping sheets will help students and their families make informed decisions about which college or university is the best financial fit for their circumstances by standardizing information on:
- the cost of one year of college
- financial-aid options to pay that cost, with differentiation between gift aid — like grants and scholarships — and loans, which have to be repaid
- net costs after grants and scholarships are reckoned
- estimated monthly payment on federal student loans likely owed after graduation, and
- retention, graduation, and default rates.
What will also be clear from the shopping sheets is the loan amount an institution recommends a student take out to cover out-of-pocket expenses. This level of detailed financial information could transform the way consumers think about their college investment, and how this not insignificant cost fits into their overall financial plan.
The department is hopeful that “every college and university in the county [will] hold themselves accountable to higher standards of transparency,” according to a letter issued by Secretary Duncan. But everyone is not convinced things will unfold that way.
In May, Sen. Al Franken (D-Minn.) introduced a bipartisan bill, the Understanding the True Cost of College Act, to require all universities to conform their financial-aid award letters to the shopping sheets to help families compare costs across equivalent elements. Also required would be more information on such measures as default rates. Whether this bill gains traction will likely depend on the level of voluntary compliance universities demonstrate. An April executive order compels institutions serving students with military benefits to make available the shopping sheet information, but only for those students.
The Education Trust has long trumpeted the importance of knowing the true cost of college before you go. College Results Online lets users compare not only cost, but graduation rates by race or ethnicity and gender at almost any four-year college or university in the country. College affordability is everybody’s business, and this first step in arming consumers with the information they need to make intelligent decisions about college-going is key. But without a critical level of buy-in from the more than 7,000 institutions of higher learning in the U.S., the department’s best intentions won’t help most families decode the confusing cipher of college financial-aid packages. Even mandatory, uniform requirements for transparency won’t mean much if college continues to be so unaffordable.
—Anneliese M. Bruner