Teaming Up To Bolster Transparency On College Costs

Weighty questions face many young adults on where to attend college and how to pay for it. Each year, institutions send millions of financial aid offers to prospective students with information about costs and available grants and loans. Often, this process represents students’ first foray into any major financial decision and is frequently a critical decision for families.

Yet there are no agreed-upon standards for financial aid offers around what information should be included with easily understood terminology.

That’s why ten leaders of higher education associations this week launched an effort to make offers clear and accurate, capturing key facts for students and their families. The leaders represent nearly every sector of higher education, including public universities, private non-profit colleges, community colleges, college admissions directors and counselors, and student aid administrators. They’ve organized the Paying for College Transparency Initiative, which I serve as chair of, because they see the opportunity to greatly strengthen how higher education communicates about the cost of college.

This is no easy task, but that makes it no less urgent. Part of the complexity of the current system stems from the fact that thousands of institutions make financial aid offers each year, outlining federal grant aid, state grant aid, institutional grant aid, as well as student loans that must be repaid. Institutions often operate in vastly different circumstances and environments from each other. So individual schools have developed their own language for aid offers, and some approaches are more complete and accurate than others.

Differences across financial aid offers are similar in some ways to when a person seeks a loan for a large purchase and encounters differences in lenders in areas such as origination fees and monthly payments. Of course, it is not quite the same because there are academic and other non-financial considerations that go into deciding where to go to college, and a student-university relationship is much more than a buyer-seller relationship. Nevertheless, students need clarity, accuracy, and transparency of key facts in financial aid offers to make an informed decision.

Of course, broadly agreed-upon standards do not preclude institutions from making the case in their offers for specific programs or activities on their campus as long as it is within the context of the needed financial information.

Anyone who has seen several college aid offers knows that students and families need more help. I saw this firsthand my grandchildren received offer letters in recent years. Some of these letters were not particularly clear or easily compared. Though the Paying for College Transparency Initiative is just launching this week, the involvement of this broad cross-section of leaders represents a critical step toward clarity, accuracy, and transparency for students and their families. The higher education leaders are united by the belief that you shouldn’t need a college degree to understand what it cost to pay for one.