Student Advocates Ask for Transparency in Financial Aid Offers
Credit: Image Credit: Hyoung Chang / MediaNews Group / The Denver Post / Getty Images- Currently, only 9% of colleges tell students the true cost of attendance.
- The Understanding the True Cost of College Act attempts to solve this issue through new disclosure requirements.
- Lawmakers have only a few weeks to pass this law before the next Congress is sworn in.
Student advocacy groups have put their support behind a proposal to make the financial aid process more transparent.
A coalition of 51 organizations this week penned a letter asking congressional leaders to pass the Understanding the True Cost of College (UTCC) Act. The law would standardize the financial aid offers that colleges and universities send to prospective students in an effort to give them the true cost of attendance.
This comes after the U.S. Government Accountability Office (GAO) recently reported that only 9% of the institutions it examined accurately told students the estimated net price of attendance.
“Paying for college is one of the biggest financial decisions facing many American families,” the joint letter states. “Yet, despite promises to change, colleges are still providing families with unclear and misleading information about their costs.”
Republican U.S. Sen. Chuck Grassley of Iowa introduced the UTCC Act in April 2021. The bill attracted three Republican and five Democratic co-sponsors.
This is not the first time Grassley has tried to push the UTCC Act through the Senate. He first did so in October 2015 and has since reintroduced the measure in each Congress.
Lawmakers have less than a month remaining in the current lame-duck session if the latest version of the bill is to pass.
Understanding the True Cost of College Act Requirements
GAO’s report centered on two common ways institutions mislead students in financial aid offers:
- Including student loans with grants and scholarships to bring down the estimated cost
- Not including indirect costs, such as housing, food, books, etc.
The UTCC Act addresses both these issues.
First, it would require all institutions that receive federal funds to include direct costs (tuition and fees) and indirect costs in the estimated attendance cost.
That includes housing and food costs for students who reside off campus, as well as the price of books, supplies, transportation, and other miscellaneous personal expenses like health insurance, according to the bill’s text.
It would also require that these institutions calculate the net price of attendance by taking these estimated expenses and subtracting only grants, scholarships, and institutional aid.
Colleges and universities may not include any loans in this estimate.
Any federal loans available to students must be listed in a separate section, so as not to confuse applicants.
Federal direct PLUS loans — which include Parent PLUS loans — can be listed at the school’s discretion. If so, however, the institution must clearly state that this and private loans are subject to an additional application process, according to the bill.
More Recent Legislation Left Out
Notably, the 51 organizations did not throw their support behind a more recent piece of legislation that a Republican lawmaker proposed soon after the GAO report.
The Education and Labor Committee’s Republican leader, U.S. Rep. Virginia Foxx of North Carolina, introduced the College Cost Transparency and Student Protection Act on Dec. 5. This bill proposed similar requirements for how institutions must calculate net cost and what must be included as expenses.
Foxx is the lawmaker who requested the report from GAO.