Today, U.S. Sens. Al Franken (D-Minn.), Tom Harkin (D-Iowa), and Chuck Grassley (R-Iowa) commended the White House for creating a universal financial aid award letter but agree with experts that families won't understand the true cost of college unless all institutions are required to use the same form letter.
In May, Sen. Franken introduced the Understanding the True Cost of College Act with Sens. Harkin and Grassley as original cosponsors. The bill would create a universal financial aid award letter so that students can easily compare financial-aid packages among schools.
"Cost is an incredibly important factor in the college decision-making process, but you can't make an informed decision if you don't know exactly how much each school is really going to cost you," said Sen. Franken. "The White House's introduction of a shopping sheet, also known as a universal financial aid award letter, is a step in the right direction, and I want to thank them for recognizing that this problem needs to be addressed. But unless a universal financial aid award form is made mandatory, colleges will still be able to use whatever form they want, and families won't be able to compare apples to apples when evaluating financial aid offers. The legislation I introduced in May would solve that problem."
"As we approach the start of a new academic year, millions of families in Iowa and across the country are struggling to pay the escalating cost of college and navigate the complex world of financial aid," said Sen. Harkin. "This standard, user-friendly shopping sheet is the first step towards empowering students to understand and compare their options and make the decision that is right for them. I applaud the Department of Education and the Consumer Financial Protection Bureau for their effort, but we also need to pass bipartisan Senate legislation to ensure all students and families will benefit, not just those applying to colleges and universities that voluntarily adopt the shopping sheet."
"We need to continue moving in the direction of making students and parents savvy shoppers, so they can avoid taking on more debt than they'll be able to repay and, ultimately, get colleges to rein in costs to compete for students," said Sen. Grassley. "Our legislation will result in all schools having the same information, so meaningful comparisons can be made. A better understanding of financial aid is one way to address the problem of student debt on the front end rather than after the fact."
Right now, schools do not use standard definitions or names for different types of aid, so students and families often report having difficulty figuring out the differences between grant aid-which does not need to be repaid-and student loans, which do need to be repaid. Several experts in higher education have confirmed that a universal financial aid award letter will only solve the problem of cost comparison if all schools are mandated to use the same form.
Last week, at a Senate education committee hearing, Sen. Franken questioned Iowa State University President Dr. Steven Leath on why he felt a mandatory universal financial aid form was necessary.
Sen. Franken: "...I recently introduced a bill to require universities to use a universal financial aid award letter that would include some of the information that you highlighted in your testimony. This bill will help students have accurate information on the true cost of college. Do you see value in directing other schools to do what you have done with financial aid award letters so that students can judge apples to apples and oranges to oranges?"
Dr. Leath: "Absolutely. I think we've put a huge emphasis on it and we've seen results. But yet our students who take our financial literacy program are still sometimes confused comparing obligations or possibilities at Iowa State to other schools because not everyone uses the same language or the same terms. I think it would be a great service. It's maybe unfortunate we have to legislate it, but it would be valuable."