A quick dive:
- A group of 10 higher education associations is forming a task force in a new effort to make the financial aid offers colleges make to students clearer and more consistent.
- They hope that standardizing the information that applicants receive after applying to different colleges will improve the clarity, accuracy and transparency of pricing in the sector.
- The new task force was chaired by Peter McPherson, who recently retired after more than 16 years as president of the Association of State and Land Universities.
College pricing can become an opaque mix of terminology—tuition, fees, net price, financial aid, financial aid, federal student loans, private student loans, scholarships, grants, work-study—contributing to a system that even higher education experts consider confusion.
It can make the process of applying to college and choosing an institution difficult for students and families, especially those who are price sensitive or unfamiliar with the ins and outs of the system. This is of particular concern to underrepresented and low-income students, as those who believe their families cannot afford to pay for college less likely to attend.
Some higher education leaders and lawmakers have advocated for standardized aid package formats for years. National Association of Student Financial Aid Administrators supports federal standards for financial aid awards, although it is also recognized that institutions want to provide information tailored to the needs of their students.
So far, this idea has not been able to completely change the higher education market.
In 2012, the US Department of Education asked institutions to voluntarily adopt a standardized form known as the Financial Aid Shopping Form, which was designed to help students compare college costs and aid packages. Only about 1,950 institutions agreed to use it until December 2013. At the time, there were more than 4,700 institutions awarding IV degrees. The sheet has since been renamed college financing plan.
Bipartisan legislation has been introduced in 2019 and once again in 2021 would require the Department of Education to create a standard terminology and format for financial aid proposals. He called for a consumer-friendly form, including information such as a breakdown of a student’s estimated cost of attendance, financial aid that does not need to be repaid and loans recommended as part of a financial aid package. Lawmakers never voted or account.
A new task force called the College Fee Transparency Initiative will once again attempt to create a set of standards, or guidelines, for the financial aid that colleges offer to students. No deadline has been set for the work to be completed, and any recommendations it makes will not be binding, McPherson said in an emailed statement.
But he argued that college leaders agree that clarity, precision and consistency are needed.
“We know there is interest across the board to make financial aid offers more understandable and transparent to students — from lawmakers, advocacy groups and institutions themselves,” McPherson said. “Despite the desire for change, big changes have not happened. We hope to change that by bringing together association leaders representing institutional stakeholders and gathering input from practicing financial aid administrators, students and parents.”
The American Council on Education, the National Association of College Counseling and NASFAA support the effort. It will gather information from financial aid, admissions and enrollment leaders at various types of institutions.
“NASFAA has done significant work — including consumer and student testing — on best practices for developing financial aid proposals,” said NASFAA President Justin Dreger. the statement said. “The financial aid community is excited to partner with this group of higher education leaders to find actionable solutions to help students and families.”
The new working group includes:
- Ted Mitchell, ACE President.
- Angel Perez, Director General of NACAC.
- Justin Dreger, NASFAA President and CEO.
- Walter Bumphus, president and CEO of the American Association of Community Colleges.
- Mildred Garcia, president and CEO of the American Association of State Colleges and Universities.
- Barbara Snyder, president of the Association of American Universities.
- Mark Becker, APLU President.
- Barbara Mystic, president of the National Association of Independent Colleges and Universities.
- Rebecca Martin, executive director of the National Association of System Administrators.
- Robert Anderson, president of the Association of Superintendents of Public Higher Education.