A government agency is pressuring colleges to provide a financial aid report card intended to clarify complex aid packages for prospective students.
The Consumer Financial Protection Bureau released a mock-up for the proposed “Financial Aid Shopping Sheet” Jan. 27 after gathering input from students, parents and educators since November.
The drafted form showcases the cost of each school, the kind and amount of aid for which the student would qualify and the projected amount of loan repayment necessary after graduation. The template for each institution would be identical so that students applying to college will be able to compare aid packages more easily.
“We want people to know before they owe so that they can make good decisions,” the bureau’s private education loan ombudsman Rohit Chopra said.
The average student debt at graduation for members of the nationwide Class of 2010 was $25,250 with a 9.1-percent unemployment rate among graduates, according to the Project on Student Debt. The average debt for GW students in the same graduating class topped $32,500, data from the advocacy organization showed.
“This is a way to start a larger conversation about [the] affordability of college. We need to make it more clear what costs are going to look like over the course of college,” Chopra said.
The University’s Associate Vice President of Financial Assistance Dan Small said the proposed form does not give enough credit to degrees earned at specific institutions. Small believes that the reputation of an institution contributes to the value of a degree earned, which he said can be used as “collateral” in securing a job that could help pay off student debt.
As Congress would need to approve the new regulations, Small does not anticipate the changes will take effect until at least July 2013.
The University will comply if the form is mandated, Small said, but he warned that it could lead prospective students to compare packages from dissimilar schools.
“A lot of things get so simplified that it gets blown out of proportion, because they’re trying to do something across the general public that doesn’t allow us to simplify it for our population,” he said.
The form would “help some,” and could force applicants to become more educated about the financial aid process, Small said, but he thought other effects would be difficult to predict.
“At this point, we have just started to review some of the data elements to determine if we can present them in the way the federal government is proposing,” he said. “Given the proper leeway to prepare, we assume we will be able to implement the new policies.”
A single template may not demonstrate the unique strengths of some universities’ packages, Director of Communications for the National Association of Student Financial Aid Administrators Haley Chitty said.
“Various institutions have different things that they want to highlight. It is important to provide some flexibility to allow institutions to customize the form to fit their institutions,” he said.
Chitty noted that the cost of attending college depends not only on which institution a prospective student chooses but also on the individual’s financial circumstances while attending that institution. He added that “trying to distill all that information on a single sheet of paper is really difficult for institutes of higher education.”
The “shopping list” aligns with President Barack Obama’s efforts to increase college access and affordability.
