We know that students and their families face a difficult task in deciding where to enroll for higher education, and understanding the cost of college—and how to pay for it—can be daunting. Too often, students are left without a clear explanation of what the costs mean or how they compare to other colleges they are considering, and as a result, many students leave college with debt that they didn’t fully understand at the time they entered school.
While many financial aid award letters provide understandable information, some can be confusing, lacking clear distinctions between grants (which don’t have to be paid back) and loans (which do), as well as important information about outcomes like graduation rates and default rates. This confusion can make it difficult for students to decide which college is the right fit for them, best suited to their needs, priced affordably, and consistent with their career and educational goals.
In July, I sent a letter to college presidents nationwide, asking them to adopt a new Financial Aid Shopping Sheet clearly showing prospective students what a college education would cost. For prospective students, this model disclosure letter for financial aid offers helps explain the total cost of a program—including tuition and fees, the costs that are covered by federal loans and grants, the type and amount of financial aid they may qualify for, their estimated student loan debt upon graduation, and information about graduation rates. This information can help students easily compare financial aid packages offered by different institutions, and ultimately make an informed decision on where to invest in their higher education.
Our goal is to help students arrive at school each fall less worried about how they will pay for college, and more focused on how they will complete college. Institutions of higher education share that goal, and many have shown their support by adopting the Shopping Sheet for use as part of their financial aid award packages starting for the 2013-14 school year.
To date, 316 institutions* serving over 1.9 million undergraduate students, or 10 percent of all undergraduates, have agreed to adopt the Shopping Sheet [MS Excel, 1.4MB]. Of those schools who have signed on, about 43 percent are public institutions, 43 percent are for-profit institutions and 14 percent are private schools. Among the institutions that have voluntarily agreed to adopt the Shopping Sheet are several state college and university systems—including the University System of Maryland, the State University of New York System, the University of Massachusetts System, and the University of Texas System—as well as several institutions with large undergraduate populations, including Arizona State University, Miami Dade College, and the University of Phoenix online campus. All of the systems and institutions that committed to financial aid transparency at the June roundtable with Vice President Biden—including North Carolina Agricultural & Technical State University, Syracuse University, the University of North Carolina at Chapel Hill, and Vassar College—have also adopted the Financial Aid Shopping Sheet for the 2013-14 school year.
Additionally, to ensure that service members, veterans, spouses and other family members have the information, support and protections they deserve, in April 2012 the President signed an Executive Order establishing Principles of Excellence for Educational Institutions Serving Service Members, Veterans, Spouses, and Other Family Members. This Executive Order requires educational institutions receiving funding from federal military and veterans’ educational benefits to provide prospective students with the financial aid Shopping Sheet to help students understand the total cost of their education. Already, more than 2,900 institutions have agreed to implement the Principles of Excellence.
Students should not have to wait until after graduation to learn the size of their monthly student loan payment. Families choosing a college should have clear and comparable information, in a common format, to guide their choice. And no one should forego college because they think they cannot afford it. We will continue to work with the institutions that have already signed up to use the Financial Aid Shopping Sheet for the next school year, and we look forward to more colleges and universities committing to use this common-sense tool to provide students and parents with clear information about costs.
Arne Duncan is the U.S. Secretary of Education
* Update Nov. 29, 2012: The Department will provide updated figures periodically on its Financial Aid Shopping Sheet website.