“It’s almost impossible for students to
compare college costs until they’ve applied and received their financial aid offer.
And when the financial aid offer they receive from one school differs from
another school, students have a very hard time determining which school is the
most economical choice. Then students often do not realize that the loan
amounts offered may be well in excess of what the student needs or can afford
to repay. This is critical information students and their families need as they
make one of the most expensive decisions of their lives,” Grassley said. “These bipartisan bills will empower students with
more information. These bills would help take the mystery out of college costs
and ensure that students know what they’re getting themselves into before they
get in over their heads.”
“We need to equip students and
their families with better information about the costs of college from the
initial college search to when they receive financial aid offers. But
right now, they’re often met with inconsistent and incomplete information,”
Smith said. “My bipartisan bills with Sens. Grassley and Ernst would
help fix this problem. That includes improved net price calculators
so students and families have individualized estimates of college costs and
financial aid figures before they decide where to apply. We've got a plan
to create a universal financial aid offer so students can easily
compare financial aid packages between schools. And we’ve introduced a bill to
improve loan counseling. These resources will help students make one of the
biggest financial decisions of their lives—how to pay for college.”
“As tuition costs and fees at colleges
continue to skyrocket, Iowans and Americans across the country are paying the
price and taking on more and more student loan debt. We need to address this
problem in multiple ways, including creating more transparency in the process
and giving students and their families the opportunity to compare costs and
make more informed choices about their higher education. As a mother, I know
how important it is for our kids to have the best opportunities to learn, grow,
and succeed, including considering higher education, and these bills will help
ensure Iowans have all the information available to make the best decision for
their futures,” Ernst said.
This bipartisan package would help college
students avoid sticker shock, compare colleges to find the best value and
increase the amount of information students receive about federal student loans
before they sign up for tens of thousands of dollars in debt.
The
Net
Price Calculator Improvement Act would improve the effectiveness
of and access to net price calculators, the tools that provide students with
early, individualized estimates of higher education costs and financial aid
figures before they decide where to apply. The bill would require schools to
put their calculators on webpages where students and families are likely to
look for cost and admissions information. The
Net Price Calculator
Improvement Act would also authorize the Department of Education to
develop a “universal calculator” that lets students answer a standard set of
financial and academic questions to get cost estimates from many schools so
they could better compare costs across institutions.
The
Understanding
the True Cost of College Act would create a universal financial
aid offer form so that students could easily compare financial aid packages
between schools. It would clarify what financial aid families will receive from
a school and create standard terms for the aid offered so that students could
accurately compare offers from different schools. Right now, schools do not use
standard definitions or names for different types of aid, so students and
families often report having difficulty figuring out the differences between
grant aid — which does not need to be repaid — and student loans, which do need
to be repaid.
The
Know
Before You Owe Federal Student Loan Act would strengthen
the current loan counseling requirements for institutions of higher education
in the
Higher Education Act by making the counseling an annual
requirement before new loans are disbursed rather than just for first-time
borrowers and lets students decide exactly how much to borrow rather than
having the maximum possible amount be the default. The bill then adds several
key components to the information institutions of higher education are required
to share with students as part of loan counseling so that students know not to
borrow more than they are likely to be able to repay.
"We are proud to support the
Understanding the True Cost of College Act.
New America's research found that the way colleges
communicate price and aid to students makes it difficult for students and
families to make financially-informed college decisions. This legislation would
help students and families navigate financial aid offers and make apples-to
apples-comparisons between schools. We thank Senators Grassley, Smith, and
Ernst for their leadership on this important issue,”
Amy Laitinen, Director of New America's Higher Education Program said.
“We strongly supports the Know Before
You Owe Federal Student Loan Act as it makes common-sense reforms that
strengthen federal student loan counseling requirements, ensuring that students
have the tools to make informed decisions about successfully financing
postsecondary education” Debra Chromy,
President of Education Finance Council said.
“A postsecondary education is one of the
most important investments a student will ever make. Yet when making college
choices, students are forced to navigate a complex maze to determine how much
college actually will cost. The pricing tools available to them are
unstandardized and confusing, provide an incomplete picture of expenses, and do
not allow students to meaningfully compare college and program options. The Net
Price Calculator Improvement Act and the Understanding the True Cost of College
Act will make much-needed improvements to two student-facing resources:
institutional net price calculators and financial aid award offers. These
measures will improve transparency around college costs, empower student
choices, and help students select a college or program that fits their financial
circumstances and goals,” Mamie Voight,
Interim President, Institute for Higher Education Policy (IHEP) said.
“We applaud Sens. Grassley, Smith, and
Ernst for leading the Understanding the True Cost of College Act to
ensure that colleges provide students and families with clear, transparent, and
comparable information about college costs and the options available to
help cover those costs,” Michele
Streeter, Senior Policy Analyst, the Institute for College Access & Success
(TICAS) said.
“uAspire applauds the effort to increase
transparency of college costs and the many student-centered improvements in the
new Understanding True Costs of College Bill sponsored by Sen. Grassley (R-IA),
Sen. Smith (D-MN), and Sen. Ernst (R-IA). uAspire supports several
provisions of this bill, including the requirements for standardized financial
aid terms, mandatory elements and formatting, as well as consumer-testing terms
and calculations with students. uAspire advises students how to navigate
complexities and confusion in understanding and paying for their postsecondary
education. Legislation to increase the consistency of how college costs are
communicated and calculated throughout their postsecondary financial aid
experience is critical. The three bills introduced today advance this cause. We
look forward to working with all parties to advance solutions for students to
have the critical cost information - about tuition/fees and costs beyond
tuition - needed to make financially-informed college choices," Laura
Keane, Chief Policy Officer, uAspire said.”
A summary of the
Net Price Calculator Improvement Act is
available
HERE.
A summary of the
Understanding the
True Cost of College Act is available
HERE.
A summary of the
Know Before You
Owe Federal Student Loan Act is available
HERE.
