U.S. Secretary of Education Arne Duncan called on colleges and universities across the country today to provide families with the information they need to make a smart investment in higher education. This call to action follows the commitment that 10 institutional leaders made during a White House meeting with Vice President Biden and Secretary Duncan earlier this month to provide key financial information to incoming students starting next year.
Secretary Duncan's remarks were part of a national convocation hosted by the Association of Public and Land Grant Universities. In addition to calling for greater transparency, he challenged institutions to control costs and better support students in order to keep prices down and help boost college completion rates.
"Today, I want to challenge every college and university in the country to hold themselves accountable to higher standards of transparency as one step toward our collective goal of meeting the President's 2020 goal and producing the highest percentage of college graduates in the world," Secretary Duncan said. "Having easy-to-understand information will help students and families make smarter decisions about higher education. We don't want students and families taking on more debt than they need. We don't want them defaulting. Worst of all, we don't want them deciding they cannot afford college."
During his remarks, Secretary Duncan asked colleges and universities to commit to providing 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 to make for their long-term investment in higher education. These institutions would join the previous 10 colleges and universities in providing the following information to all incoming students as part of their financial aid package, beginning with those applying for 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.
A key piece of President Obama's plan to make college more affordable is improved transparency of college costs and value. Too often, students and families face confusion when evaluating financial aid packages, some of which do not clearly differentiate loans from grants, nor distinguish private versus federal loans, making it difficult to compare aid offers.
To make it easier for institutions to provide transparent information to students, the U.S. Department of Education, in partnership with the Consumer Financial Protection Bureau, gathered input from students, families, and the higher education community to develop a Financial Aid Shopping Sheet, which colleges and universities are encouraged to adopt in order to provide students with clear information about the type and amount of aid they qualify for and allow students to easily compare aid packages offered by different institutions. This Shopping Sheet -- a model of what a good financial aid award letter would look like -- will be available in the coming weeks. Institutions that are interested in finding out how they can adopt the Shopping Sheet and improve their transparency efforts can get more information by emailing HigherEducation@who.eop.gov.
Duncan's call to action is part of an ongoing effort by the Obama Administration to make college costs more transparent for education consumers. Also this month, the Department published its annual college costs lists, which detail schools with the highest and lowest published sticker price, schools with the highest and lowest net price once grants and scholarships are factored in, and those schools where prices are rising the fastest. The lists can be found at: http://collegecost.ed.gov/catc/Default.aspx.