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Federal officials unveil financial aid award letter for comparing colleges

WASHINGTON — The Obama administration on Tuesday released a version of a financial aid award letter that will allow students to better compare college costs before deciding where to enroll.

The so-called "shopping sheet" is a one-page, standardized form that the administration hopes public and private colleges will adopt so that students can make side-by-side comparisons of estimated annual costs, potential loan payments after graduation, and an institution's graduation and loan default rates.

"So many students I meet across the country don't really understand how much debt they are in until the first bill arrives, and that's far too late and simply not fair," Arne Duncan, the education secretary, said. "This is an easy-to-use form that standardizes information parents use to make smart educational choices and makes the true cost of higher education far more transparent."

Duncan released an open letter to college and university presidents asking that they start to use the forms for financial aid packages beginning in the 2013-14 school year.

The shopping sheet was developed with the federal Consumer Financial Protection Bureau, which was created in 2010 in the wake of the financial crisis, in part, to educate consumers.

The bureau's director, Richard Cordray, said many college financial aid forms are laden with jargon and use terms that differ in meaning from institution to institution. Meanwhile, the costs of higher education are spiraling and more students are in debt: Outstanding student loans have surpassed the trillion-dollar mark, and defaulted student loans total more than $8 billion, he said.

At California's public universities, students have seen tuition and fees soar as state funding support has declined in recent years. Both the University of California and California State University systems said transparency and accountability were paramount, but they are still considering whether to use the forms.

The University of California already widely disseminates information about tuition and costs, but Carolyn Henrich, director for education at the UC Office of Federal Governmental Relations, said the campuses could easily format their information to fit the "shopping sheet."

Federal officials unveil financial aid award letter for comparing colleges 07/24/12 [Last modified: Tuesday, July 24, 2012 10:46pm]
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