In its continuing focus on consumer education about college, the White House has enlisted the aid of 10 post-secondary institutions — including historically Black North Carolina A&T State University — to serve as models in providing students with standard information about tuition, financial aid and the responsibilities of loan repayment.
North Carolina A&T Chancellor Harold L. Martin Sr. said he joined the effort because of the challenges facing low-income students attending that institution. “Tuition costs continue to rise and a lot of families are just trying to stay afloat in this tough economy,” he said.
According to Martin, about 90 percent of NCA&T students receive some type of aid such as grants, loans or work-study, “and that comes with a mound of confusing but pertinent information.”
At a press briefing during the White House event, Secretary of Education Arne Duncan said that letters from universities “look different, contain different information and often, frankly, do a poor job of making clear how much a student will receive in grants and scholarships, and how much they’ll have to borrow in student loans.”
However, the college leaders who met with Duncan, Vice President Joe Biden and other administration officials in early June pledged to provide standard award letters — dubbed a financial aid shopping sheet — that provide:
• The total cost of a year of college;
• Financial aid information with a clear differentiation between grants and scholarships, which need not be repaid, and loans, which have repayment requirements;
• Total net costs facing students after all grant and scholarship aid;
• Estimated monthly loan payments after graduation; and
• Student outcome data on enrollment, graduation, and ability of former students to repay their loans without going into default.
Duncan said comprehensive information and transparency are key ingredients to provide families with the information they need about the financial responsibilities of college enrollment.
“This is, frankly, not rocket science,” Duncan said. “However, I think it is a triumph of common sense.” The goal is getting more schools to voluntarily adopt the strategy of these 10 institutions.
Other colleges making the commitment are: Arizona State University, Miami Dade College, the State University System of New York, Syracuse University, the University of Massachusetts System, the University of North Carolina at Chapel Hill, the University System of Maryland, the University of Texas System and Vassar College.
Since the list includes several large state university systems, the White House said the initiative would reach 1.4 million students, or 5 percent of the total higher education community.
Martin said many students at his institution are first-generation college students where there is little family history of higher education participation. “They are very bright and highly motivated, and they all have to figure out how to pay for their college education.”
Yet widespread adoption of a standard award letter can benefit any student, he said. “Transparency will be a help to all students, period,” he told Diverse. Through this process, students can better compare packages from colleges and, in some cases, avoid the need to take out loans.
“The worksheet will help families compare the cost of college here at A&T with any other school in which the student is interested to ensure they are in fact getting the best education their money can buy,” Martin added.
A leading financial aid analyst also welcomed the move.
“This is a step in the right direction for students and families, who all deserve clear, comparable, and consumer-friendly financial aid offers,” said Lauren Asher, president of The Institute for College Access and Success, which is active in financial aid reform.
“It’s hard enough to figure out how to pay for college without confusing, obscure, or misleading information about costs and aid,” she said.
The shopping sheet also is a major priority for the Consumer Financial Protection Bureau, which has an office focused on student financial aid that collects consumer complaints and seeks to build consumer knowledge on the topic.
“We have heard from many who said they didn’t understand what they signed up for and got in over their heads,” said Richard Cordray, director of the CFPB, who also spoke at the press briefing. With student loans now eclipsing credit card borrowing and passing the $1 trillion mark, “The stakes have never been higher for families to clearly understand the costs and risks of student debt.”
The CFPB has a sample letter on its web site at http://www.consumerfinance.gov/static/students/disclosure.pdf.