Today, U.S. Sen. Al Franken (D-Minn.) reintroduced his legislation to create a universal financial aid award letter so that families and students can easily compare financial aid packages from different schools. Sen. Franken's legislation is cosponsored by Senate Education Committee Chairman Tom Harkin (D-Iowa) and Sens. Chuck Grassley (R-Iowa), Marco Rubio (R-Fla.), Kirsten Gillibrand (D-N.Y.), Patty Murray (D-Wash.), Ben Cardin (D-Md.), Charles Schumer (D-N.Y.), Tom Carper (D-Del.), Richard Blumenthal (D-Conn.), Ron Wyden (D-Ore.), Richard Durbin (D-Ill.), Sheldon Whitehouse (D-R.I.), Tim Johnson (D-S. Dak.), Christopher Coons (D-Del.), and Barbara Mikulski (D-Md.).
Currently, schools do not use standard definitions or names for different types of aid, so students and families often report having difficulty differentiating between grant aid-which does not need to be repaid-and student loans, which do need to be repaid. The Understanding the True Cost of College Act of 2013 would clarify what financial aid families will receive from a school and create standard terms for the aid offered so that students can accurately compare offers from different schools.
"Students in Minnesota graduate with the third highest average debt in the nation-nearly $30,000 each-and part of the problem is that they often don't have a clear picture of how much their education is going to actually cost them," said Sen. Franken. "My legislation will require schools to use a universal financial aid letter so students and their families will know exactly how much college will cost, and will help them compare apples to apples when deciding what school a student will attend."
"Last year, the amount of student loan debt owed by Americans surpassed $1 trillion, and that number is growing. It is important that students and their families have uniform, consumer-friendly information about the cost of college up-front so they can shop around, make apples-to-apples comparisons among colleges, and select a school that best meets their needs, in terms of both quality and affordability," said Sen. Harkin, who is Chairman of the Senate Health, Education, Labor, and Pensions Committee. "Right now that is a difficult task since each school lists expenses differently. This bill will remove some of the mystery and guesswork for students and families as they navigate the higher education marketplace and empower them to make fully-informed decisions about where to attend."
"This initiative will empower students and parents with the information they need to make the best financial decision for their families and to avoid taking on more debt than they will be able to repay. The effort to fully inform is part of addressing the problem of student debt on the front end rather than after the fact. And, the more students and parents become savvy shoppers, the more colleges will be forced to rein in rising costs to compete for students," said Sen. Grassley.
"This legislation is an important step toward helping students and their families make truly informed decisions about their higher education options," said Sen. Rubio. "For the 21st century student to make smart financial decisions regarding college, we must equip them with easy-to-use and meaningful information about financial aid options available to them. Students will then be able to begin planning for their post-college careers from the beginning, and be prepared to enter today's competitive global workforce economy upon graduation."
The Understanding the True Cost of College Act would:
Require institutions of higher education to use a uniform financial aid award letter;
Call on the Department of Education to work with colleges, consumer groups, students, and school guidance counselors to develop standard definitions of various financial aid terms for use in the uniform financial aid award letters;
Establish what information must be included on page one of the uniform financial aid award letters, such as: cost of attendance, grant aid, work study assistance, eligible amounts of federal student loans, and the net amount a student is responsible for paying after subtracting grant aid.
Require the Department of Education to establish a process to consumer test the uniform financial aid award letter and use the results from the consumer testing in the final development of the uniform financial aid award letter.
In Minnesota, Sen. Franken's bill is supported by the Minnesota State Colleges and Universities, Minnesota State College Student Association, Minnesota State University Student Association, University of Minnesota Graduate and Professional Student Assembly. Nationally, the bill is supported by the American Federation of Teachers-AFL-CIO, the National Consumers League, the Institute for College Access and Success, Education Trust, and the National College Access Network.
Sen. Franken previously introduced the Understanding the True Cost of College Act in 2012.