Students and Families Need Clear, Practical Information about College Costs and Financial Aid, Witnesses tell House Education Subcommittee
WASHINGTON – Students and families do not have easy access to clear, consistent, and timely information about college costs and financial aid options in order to help them effectively plan for college, witnesses told the House Subcommittee on Higher Education and Workforce Training today. Witnesses said that requiring up-front college cost and financial aid information that uses plain language will help students and parents plan effectively when deciding which college to attend.
“We must do a better job of providing students and their families with clear, useful, and timely information about college costs and financial aid options to help them make the right decision,” said Rep. Tim Bishop (D- NY), the ranking member’s designee of the Subcommittee on Higher Education and Workforce Training. “Given the variety of ways students attend college and the growing reliance on federal financial aid dollars, the federal government is in a unique position to help collect such information so that students and their families can make a direct comparison across institutions.”
While a higher education continues to be the best path to the middle class, rising costs are making it more difficult for students and families to pay for a college degree. That makes access to the right consumer information before they make decisions about where to go, what to study, and how to finance their college education important. To help in that effort, the Department of Education and the Consumer Financial Protection Bureau (CFPB) recently developed the Financial Aid Shopping Sheet and the College Scorecard, which are tools aimed at helping students understand costs and how to pay for college.
Unfortunately, there remains a steep learning curve for families. Witnesses testified that transparency efforts should be student-centered and help provide information in ways families can understand.
“There is a gap between what students think they know and what they need to know,” said Nicole Hurd, founder and executive director of the National College Advising Corps. “They think they know how much college costs, but we have not educated many of them or their families on financial literacy. They do not know the difference between a grant and a loan. They do not know the difference between the college cost and the net price.”
Witnesses also testified that states and schools need to do their part to make higher education costs more transparent and accessible to students and families; and they must also do a better job of reaching students earlier in their education.
“School districts and state governments need to step forward and ensure that high school students and their families are being provided access to high quality information about attending college and paying for it,” said Dr. Donald Heller, dean of the College of Education at Michigan State University. “One way of doing this is to ensure that schools are adequately funded so that students have access to good advice from school personnel.”
Today’s hearing comes as more than 7 million students and families are in jeopardy of affording their next academic year of college. Unless Congress acts, interest rates on need-based student loans will double from 3.4 percent to 6.8 percent on July 1. For each year Congress does not act, the neediest students will see their costs increase by over $1,000 through repayment. Total student debt in the United States recently surpassed $1.1 trillion.
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