Vice President Biden, Secretary Duncan, CFPB Director Cordray and College Presidents Meet About Transparency of College Costs
College Presidents and Leaders to Commit to Providing Prospective Students with Key Financial Information
Today, Vice President Joe Biden, Secretary of Education Arne Duncan, Director of the Consumer Financial Protection Bureau (CFPB) Richard Cordray and Domestic Policy Council Director Cecilia Muñoz will meet with presidents and leaders from ten colleges and universities who will commit to providing key financial information to all of their incoming students starting next year. Following the meeting, Secretary of Education Arne Duncan and Director of the Consumer Financial Protection Bureau Richard Cordray will join Press Secretary Jay Carney in the briefing room where they will call on all college and university presidents to make the same commitment to provide easy-to-understand financial data about their higher education investment.
Today’s commitment to financial aid transparency embraces the obligation to provide students and their families with the clear, useful information they need to make the best decisions about where to enroll and what kind of financial commitment they are taking on with their important, long-term investment in higher education. Each of the participants will commit to providing the following information in one easy-to-understand place, to all incoming students as part of their financial aid package beginning with the 2013-2014 school year:
- How much one year of college will cost;
- Financial aid options to pay this cost, with a clear differentiation between grants and scholarships, which do not have to be repaid, and loans, which do;
- Net costs after grants and scholarships are taken into account;
- Estimated monthly payments for the federal student loans the student would likely owe after graduation; and
- Vital information about student results, including comparative information about the rates at which students enroll from one year to the next, graduate, and repay their loans without defaulting on their obligations.
The colleges, universities and state systems of higher education making the commitment today to transparency in financial aid information are:
- Arizona State University
- Miami Dade College
- North Carolina Agricultural & Technical State University
- State University System of New York (comprised of 64 colleges, universities, and community colleges)
- Syracuse University
- University of Massachusetts System (comprised of 5 universities)
- University of North Carolina at Chapel Hill
- University System of Maryland (comprised of 12 universities)
- University of Texas System (comprised of 9 universities)
- Vassar College
Ensuring every American can attain a college credential is critical to President Obama’s plan for creating an America Built to Last. With two out of every three new jobs requiring some postsecondary education, completing college has never been more important. However, it’s also never been more expensive. Students are borrowing more to attend college—about two-thirds of bachelor’s degree recipients, in fact, and rack up an average debt at graduation of over $26,000 in federal and private student loans. While a quality higher education remains a sound investment, students and families need to clearly understand the costs and benefits of each college they’re considering so they can easily compare choices and identify the best value prior to enrolling.
A key piece of President Obama’s plan to make college more affordable is improved information and transparency of college costs and value. Clarity and accessibility of information is necessary so that students and families can make informed decisions about where to attend college, so they can choose a school that is best suited to their financial and educational goals. Too often, students and families face confusion when comparing financial aid packages, some of which do not clearly differentiate loans from grants, nor distinguish private vs. federal loans, making it difficult to compare aid offers side-by-side.
To help families better understand this information, the U.S. Department of Education, in partnership with the CFPB, gathered input from students, families, and the higher education community to develop a model financial aid award letter, or Financial Aid Shopping Sheet, which colleges and universities can adopt to provide prospective students with the type and amount of aid they qualify for and easily compare aid packages offered by different institutions. This Shopping Sheet - a model of what a good financial aid award letter would look like – was posted online for public comment and feedback. These agencies have received over a thousand comments, and are incorporating this feedback into a final form that will be available using Smart Disclosure—a format that helps provide consumers with greater access to the information they need to make informed choices. The Department will be working with major software vendors to colleges to improve their financial aid award packages in the upcoming financial aid award cycle and plans to release a revised version of the Shopping Sheet by this fall, which will serve as an easy way for institutions to fulfill this commitment to transparency in helping Americans understand financial aid costs for college. At a speech on college affordability in January, President Obama encouraged all colleges to adopt the shopping sheet, to promote greater transparency in financial aid.