Institutions Commit to Providing Millions of Students with Easy-To-Understand Information About College Costs

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.

Shopping Sheet Example

An example of the information on the Shopping Sheet

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.

Top 5 Benefits of the College Navigator

College Navigator LogoWhether you’re a high school student wanting to look into your college options or a parent trying to get ahead of the game, the college research and application process can be confusing. With 4,000 degree-granting institutions in the United States, how are you supposed to find out which one is the right fit for you?

Luckily, ED has a great resource that makes the process of finding a college easier. The College Navigator helps you find, organize, and keep track of the schools that are best suited for you. Here’s a list of the top 5 ways to use this tool:

1.     Cost Calculator

The Navigator estimates student expenses for each college, including tuition, books, supplies, and room and board. Also provided is the net price of attendance and links to each school’s calculator.

2.     Financial Aid

College Navigator reports every college’s financial aid awards, breaking them into categories such as number of students at the school who receive aid and average amount of aid received.

3.     Graduation Rates 

Data are presented on color-coded graphs that make the numbers easy to understand whether students are staying in school and completing.

4.     Student Loan Default Rates

You can see whether former a college’s students are repaying their student loans. If too many are defaulting, it’s a sign the school isn’t preparing them for success after graduation.

5.     Compare Your Favorites

Add colleges and universities that you like to a My Favorites tab. You can compare two or more schools and export results to a spreadsheet.

The college application process is an important one, but it doesn’t have to be stressful. With College Navigator, you can narrow your search and stay connected to your prospective schools’ admissions offices. Before you know it you’ll be on your way to college that’s right for you.

Alexandra Strott is a student at Middlebury College and an intern in ED’s Office of Communications and Outreach

Take Politics Out of Student Loan Process

This op-ed appeared in today’s edition of Politico.

Last month, I had the honor of giving the commencement address at Howard University. I was filled with hope and inspiration looking out at the faces of all those young people, often the first in their family to attend college.

Those students and their families worked hard, sacrificed and saved to go to Howard. And for many of them, getting a degree would not have been possible without the help of Pell Grants and low-interest federal student loans.

These students and parents understand that a post-secondary education is the ticket to economic success in America. But while it’s never been more important to have a degree, a certificate or an industry-recognized credential — it’s also never been more expensive.

Since 1995, college costs across the country have increased almost five times faster than median household income. As a result, students and their families are taking on more and more debt. Borrowing to pay for college used to be the exception, now it’s the rule.

About two-thirds of college graduates borrow to go to school, and on average they’re graduating with more than $26,000 in debt. In an economy still recovering from the worst downturn since the Great Depression, getting a job is hard enough, but paying back those loans is daunting.

To make matters worse, a policy change is coming at the end of this month that will make getting out of debt more expensive for more than 7 million young Americans next year: Without congressional action, the interest rate on Stafford loans will double from 3.4 percent to 6.8 percent, starting July 1.

Based on the average loan amount, doubling the Stafford loan interest rate will add more than $1,000 in total costs for borrowers. For students who borrow heavily to go to college, it could cost even more. Only Congress can keep these interest rates from doubling. And yet Congress has so far failed to deliver.

While I appreciate that some congressional Republicans have recently indicated they’re now willing to work with the administration to find a solution, the debate so far has been largely divided along party lines and made no progress.

Americans are tired of political fights in Washington. It’s time to stop talking and start doing. People want Congress to put politics aside and come together to produce real results that make a difference. And you can count college students at the top of that list. I am optimistic that both parties can — and should — find common ground to reach a bipartisan compromise.

President Barack Obama has traveled to colleges and universities across the country, urging Congress do its part to keep college affordable by stopping student loan interest rates from doubling this July. With so many students struggling to both make ends meet and afford the skyrocketing price of a college degree, now is not the right time to heap more costs on them.

All of us share responsibility for making college affordable and keeping the middle-class dream alive. Parents need to be smart consumers, and students need to finish on time or even early.

Colleges and universities need to be efficient and productive in delivering educational value to students. Graduating students ready for success should be as important to professors as research and publishing. Institutions should ensure that keeping costs down does not take a back seat to the expensive amenities outside the classroom. Where it makes sense, they should offer lower-cost options such as online learning.

States must do their part to make higher education a higher priority in their budgets. Last year, 40 states cut higher education spending — the single most significant factor in tuition increases.

The Obama administration is working everyday to do its part. But we need Congress to step up and help. Over the past two years, we’ve worked with Congress to dramatically boost Pell grant funding by passing the Recovery Act. We’ve also eliminated billions of dollars in wasteful taxpayer subsidies to banks, plowing the savings into aid for low-income college students.

We’re helping students better manage their debt after graduation with programs like income-based repayment, loan consolidation and public service loan forgiveness. And we’re proposing to double the number of work-study jobs and make the American Opportunity Tax Credit permanent, which would provide $2,500 annually for working families to pay for college. We’re also calling for new incentives for states and institutions to keep college costs from escalating.

We took all of these steps because the president and I believe education is a public good. College should not be reserved only for those who can afford it. Investing in education is the best investment America can make to bolster its competitiveness in a knowledge-based, global economy. If we don’t invest today, we will lose tomorrow.

Now, America can take another simple step forward and keep the interest rate on Stafford loans at 3.4 percent — but only if Congress does its job and comes together around a fair and responsible way to pay for it.

In 2007, a Democratic-controlled Congress and a Republican president came together to lower interest rates on these loans because it was the right thing to do. That Congress did not put politics ahead of students and neither should today’s. Let’s do the right thing for America’s students — and for our nation’s economy.

Arne Duncan is the secretary of education.

Education Department Announces Winners of Net Price Calculator Video Contest

Each year, millions of students face the challenge of choosing a college – and how to afford it is increasingly daunting for families. For many, the high price tag of a college education may discourage them from pursuing a degree, and that’s why the Department has undertaken an effort to help families access better consumer data that can help students determine how to best invest in a high-quality education at an affordable price.

Part of that effort has focused on institutions’ “net price” and spreading awareness of net price calculators, a key tool that can assist parents and students in researching the cost of higher education. Net price calculators go beyond an institution’s “sticker price,” factoring in grants and scholarship aid to give families a better sense of how much they would actually pay to attend a specific school.

Earlier this year, the Department held a contest encouraging college and high school students to come up with creative videos that explain net price calculators and why they are a valuable resource. Today, ED is announcing that three students have each won a $1,500 prize for creating the top-scoring videos in the Department’s College Net Price Calculator Student Video Challenge. The winners are:

    • Michael Kirby from the University of Richmond in Richmond, Va. (watch the video)
    • David DeMesquita from Cal State Fullerton in Fullerton, Calif. (watch the video)
    • Brian Schwabauer from Missouri State University in Springfield, Mo.  (watch the video)

The Department plans to use these videos to broaden awareness of net price calculators among students and will continue outreach efforts to several stakeholder groups, organizations, college counselors and student body leaders. In addition, every title IV institution is now required to have a net price calculator on their website, and the Department has proactively linked to each school’s net price calculator from its College Navigator site, which contains a wealth of consumer information. 

The challenge is part of a broader Administration effort to address the rising cost of college and the struggles families face paying for higher education. The Department hopes that by providing key consumer data like net price, families will have a better sense of what they can afford and will be empowered to make smart decisions about where to invest and enroll for college.

Sara Gast is press aide in the Office of Communications and Outreach

Consumer Financial Protection Bureau’s Student Loan Complaint System is Open for Business

Cross-posted from the CFPB’s blog.

Since we opened our doors, student loan borrowers have told us about some of the frustrations they sometimes face with their lenders, servicers, and debt collectors. Borrowing for college should be the best investment you’ll make, but for many Americans, paying off those student loans is a real challenge.

For several years, federal student loan borrowers have had the Department of Education’s Federal Student Aid Ombudsman to help bring their concerns to financial institutions. But for millions of students and their families, federal student loans don’t cover the full cost of college and they need private student loans to make ends meet.

However, private student loans – which don’t always carry the same consumer protections as federal student loans – have been overseen by a patchwork of government agencies. In the Dodd-Frank Wall Street Reform and Consumer Protection Act, Congress established an Ombudsman for private student loans within the Consumer Financial Protection Bureau to assist borrowers with private student loan complaints. This means a single federal agency is now responsible for watching out for all students and families who choose to borrow private student loans.

Today, we are open for business and ready to hear from you. To ask a question, file a complaint, or share your story: go to www.consumerfinance.gov/complaint or call our toll-free number at 1-855-411-CFPB.

If you file a complaint, we’ll work with your lender or servicer to get a response. While we certainly can’t make your debt disappear, we can help bring your concern to your financial institution’s attention. If you don’t have a specific complaint or question, but want to tell us what is – or is not – working in the student loan market, we invite you to tell your story.

And while the Consumer Bureau has only been open for a short time, we’ve been hard at work to gather the facts and provide tools to help you make good decisions about student loans. We launched an online tool, the Student Debt Repayment Assistant, to help you navigate the maze of student loan repayment options. We also launched Know Before You Owe: student loans and worked with the Department of Education to develop a draft “financial aid shopping sheet” for schools to improve the student loan information they give to students.

Our team at the Bureau will keep working to give you the tools and the information to make sound financial decisions on student debt – and to figure out your options in case things don’t go according to plan. These days, we all seem to know someone having a tough time with their student loans, so share this new resource by e-mail, Twitter, and Facebook (just use one of the buttons below). With your participation, we can help make the student loan market work better for all of us.

Rohit Chopra is the CFPB’s student loan ombudsman.

How Will You Pay for College?

If you need help paying for college, Federal Student Aid can help.  Each year, Federal Student Aid, an office of the U.S. Department of Education, provides more than $150 billion in higher education grants and loans to students attending college—but to qualify, you must complete the Free Application for Federal Student Aid (FAFSA).

FAFSAThe FAFSA is used for all federal grants and loans as well as for many state and institutional student aid programs.  Remember, applying is FREE and there is no income cut-off to qualify for federal student aid.  However, some aid is distributed on a first-come, first-served basis so it is important to apply early.

You can complete the FAFSA for the upcoming 2012-2013 school year now at www.fafsa.gov.  The online application is the quickest and easiest way to apply for aid.

The online application minimizes the number of questions you must complete by using your responses to eliminate additional questions that do not apply to you.  It also allows you to retrieve your tax information directly from the IRS to populate many of the financial questions on the FAFSA.  These improvements have helped reduce the average time it takes to complete the FAFSA by one third, from 33 minutes to 22 minutes.

In order to help you make informed decisions about college, the online FAFSA also provides you with important information about the schools you may be interested in attending, includ­ing school type, tuition costs, and net price, as well as graduation, retention, and transfer rates.  The FAFSA website also offers information on the financial aid process and explains the various types of federal student aid available.

If you have questions when completing your FAFSA, we have lots of help available through our Contact Us page on www.fafsa.gov.  You can contact us by:

    • Using Live Help, a secure online chat session where you can ask our customer service representatives a question;
    • Calling 1‑800‑4‑FED‑AID (1‑800‑433‑3243) or 319‑337‑5665; or
    • E-mailing us at FederalStudentAidCustomerService@ed.gov or through our online question form.

You can also follow us on our new Twitter handle @FAFSA to get the answers to some of the most commonly asked questions about completing the FAFSA.  Or, you may want to attend our FAFSA Twitter town hall on January 26 at 4:30 p.m. Eastern Time to have your FAFSA questions answered live by the U.S. Department of Education Under Secretary Martha Kanter.

We are looking forward to receiving your FAFSA soon.  To learn more, please visit www.fafsa.gov.

James Runcie

James Runcie is Chief Operating Officer of Federal Student Aid

Join ED for FAFSA Office Hours on Twitter

For those of you who may need help paying for college, a new year means it’s time to complete a new FAFSA.

We understand the financial aid process can often be overwhelming, especially if you’ve never gone through it before.  To help you navigate the process, we are very excited to announce the launch of the @FAFSA Twitter account from Federal Student Aid.

The @FAFSA Twitter account will help support an ongoing conversation around student financial aid, and to kick this off, Martha Kanter, the Under Secretary of Education, will host “FAFSA Office Hours” where she will solicit and answer students’ FAFSA questions live on Twitter using the #askFAFSA hashtag. The event will take place on January 26th at 4:30pm (EST) and will be the first in a monthly series of Q&A sessions that Federal Student Aid will host on Twitter.

Here’s how it works:

    • Follow @FAFSA on Twitter for FAFSA information and financial aid tips.
    • Ask your questions now and during the live event on Twitter using the hashtag #askFAFSA
    • Follow the Q&A live through the @FAFSA Twitter account
    • Can’t make the live session? A summary of the live chat including the full Q&A will be posted on the ED.gov blog following the event.

The FAFSA is the Free Application for Federal Student Aid. It’s the form to fill out in order to apply for student grants, work-study, and loans. To receive federal student aid for the 2012-13 school year, you must complete the 2012-13 FAFSA at www.fafsa.gov.  Some financial aid is first-come, first-served, so we encourage all potential and returning students to complete the FAFSA as soon as possible. Remember, four-year colleges and universities aren’t the only schools that accept the FAFSA Community colleges, nursing schools, online schools, and career schools do too. More than 6,000 schools accept FAFSA!

We hope you will find this to be a great resource as you pursue your education, so let us know how we can help. Remember, you can complete the FAFSA online today at www.fafsa.gov.

The U.S. Department of Education’s office of Federal Student Aid

Win $1,500 in ED’s College Net Price Calculator Student Video Challenge

Are you, or do you know, a high school or college student with great video skills? Help the Department of Education broaden public awareness of college net price calculators, and you could win $1,500. A university or college’s net price calculator gives families a better sense of how much they would actually pay to attend a particular institution.

The College Net Price Calculator Student Video Challenge asks high school and college students to produce short videos highlighting why the calculators are a valuable resource.  A panel of higher education stakeholders will judge the entries, and the top three contestants will each win a $1,500 cash prize. Video submissions are due Jan. 31, and the winner will be announced this spring.

Net price calculators allow prospective students to enter their financial information to find out what students with similar financial needs paid to attend the institution in the previous year. The calculator includes all grants and scholarship aid that might be available to the student. While the calculator won’t be able to tell an individual student exactly how much he or she will have to pay to attend that school, it will give students a realistic estimate of how financial aid might lower the net cost of enrolling in that institution.

You can find a college or university’s net price calculator on their website, or use ED’s College Navigator to find a link to a school’s calculator.

To learn more or submit an entry, visit http://netpricecalc.challenge.gov/.

Bringing Transparency to College Costs

Cross-posted from the White House Blog.

More and more, Americans understand the critical role that earning a college degree plays in their lives, with prospects for higher earnings and further advancements that extend throughout their careers. However, one of the greatest challenges Americans face is the rising cost of higher education.

To help students make informed decisions about their choice for higher education, today the Department of Education launched an online College Affordability and Transparency Center on the Department of Education’s College Navigator website. As part of this Center, the Department posted lists that highlight institutions with the highest tuition prices, highest net prices, and institutions whose prices are rising at the fastest rates. Institutions whose prices are rising the fastest will report why costs have gone up and how the institution will address rising prices. The Department will summarize these reports and make them publicly available to parents and students.

The President has been committed to making higher education more affordable, and today’s announcement complements our ongoing efforts. Since taking office, we have worked to expand student aid, improve options to repay student loans, and give more students access to higher education. We have also enhanced consumer information on the FAFSA and on the College Navigator portal, a resource that can provide information on thousands of institutions of higher education across the nation. These existing tools will complement the informative resources newly available today.

But colleges also have a role to play as we work to ease the financial burden of higher education. In his State of the Union address last year, the President called on colleges to do a better job of keeping costs down. Additionally, state budget constraints present increasing challenges for affordability. Too often the answer has been to cut aid to public colleges and increase tuition, pushing the financial burden on families already struggling to make ends meet.

Ultimately, better information alone will not cure the problem of college affordability. However, it will enhance the choices and decisions made by families as they pursue higher education. The new College Transparency and Affordability Center is just a first step in helping students better understand their path in postsecondary education; the Administration will continue to promote transparency in educational costs that will help all current and prospective students of higher education make a smart investment in their postsecondary studies.

Melody Barnes is the President’s Domestic Policy Adviser and the Director of the Domestic Policy Council

A Mother’s Message To Her Eighth Grader – “It’s Not ‘If You Go To College,’ But ‘When‘”

This week, the U.S. Department of Education released a new Spanish-language video that highlights the need for students to begin thinking about college long before they enter high school.

The video introduces Demi Moreno, an 8th grader at Whittier Health Science Academy in San Antonio, Texas, who has already set an ambitious career goal of becoming a lawyer.  We watch as Demi’s parents, teachers, principal and peers encourage her to prepare for college now — by taking tough courses, paying attention to her grades, and, most of all, having high expectations for herself.

“We began talking to our children about college on their first day of school,” says her mother, Luz Moreno.  “It was never, ‘if you go to college.’  It was always, clearly, ‘when you go to college.’ And that has always put the idea clearly in their minds that they must go to college.”

President Obama has set a goal for the United States to have the highest proportion of college graduates in the world by the year 2020.  By that date, to ensure a competitive workforce, at least 60 percent of U.S. adults will need to have earned a degree from a two-year or four-year institution.

The new video is called “La universidad: el sueño comienza hoy” (“College: the Dream Begins Today”) and runs approximately six minutes.  The piece is closed captioned in both English and Spanish.   Just click the “cc” button” and select the language option you prefer.

Click here for an alternate version of the video with an accessible player.