WASHINGTON – Today, the Government
Accountability Office (GAO) published an alarming report, finding that a vast
majority – 91 percent – of colleges mislead potential students on the true cost
of their education. After reviewing the report, Sen. Chuck Grassley (R-Iowa),
Sen. Tina Smith (D-Minn.) and Rep. Young Kim (R-Calif.) renewed their
bipartisan push for the
Understanding
the True Cost of College Act.
“It’s disturbing that so many colleges
are misleading students by leaving out important details, conflating loans and
grants and even understating total costs. Previous attempts to create voluntary
standards have been unsuccessful, with students literally paying the price.
Congress needs to pass the Understanding the True Cost of College Act to
ensure students are able to easily compare financial aid offers by creating a
uniform, standard offer letter. It’s clear our bill is needed now more than
ever,” Grassley said.
“This GAO report is a big, red flag
signaling that students are systematically at risk of being misled about the
total cost of college. This report demonstrates that the voluntary efforts and
standards for communicating the important details of financial aid packages to
students have failed. Congress must act to increase the transparency and
accuracy of these offers for students and families, and our bipartisan bill
would fix this widespread problem once and for all,” said Smith. “Our bill, the Understanding
the True Cost of College Act, would equip students and their families with
the accurate, consistent and complete information they need to make informed
decisions.”
“Today’s GAO report reaffirms what we
hear every day from students and families in California and across the nation –
too many colleges misrepresent the total cost of programs and financial aid
options,” said Kim. “Families
deserve the most accurate information regarding the cost of college and
available resources. That is why Congress must pass our Understanding the True Cost of College Act as soon as possible to
ensure a streamlined, transparent financial aid process that allows families to
make the best, informed decision possible to reduce student debt. I will not
stop fighting to make life more affordable for the communities I represent.”
GAO analyzed a representative sample of
financial aid offer letters from hundreds of colleges. These letters are the
first official notices from colleges to students, which are then used to
compare prices and inform future decisions. The analysis found:
- 91 percent of
colleges understate the total cost;
- 65 percent leave
out important details about aid packages;
- 31 percent list
loans as grants; and
- Not a single school examined by the GAO used all ten best
practices.
The GAO report notes the Understanding
the True Cost of College Act is already before Congress and would help fix
this lack of clarity. Specifically, the bill would require colleges to follow
well-documented best practices for information contained in all financial aid
offer letters. It would create a universal financial aid offer letter so
students can easily compare financial aid packages between schools.
"I am dismayed, but unsurprised,
that colleges and universities continue to omit or understate their price and
misrepresent aid options to students and families in financial aid offers. New
America’s research almost five years ago had the same findings. In the
intervening years, voluntary efforts and formal guidance from the U.S.
Department of Education has resulted in no substantial change in how
institutions provide this information. The Understanding the True Cost of
College Act is the gold standard, signature legislation that will solve this
common sense issue once and for all and help students and families make
financially-informed postsecondary decisions. We applaud Senators Grassley,
Smith, and Ernst for centering students and families in this bill, and urge
Congress to act," Rachel Fishman,
Acting Director, Higher Education Program, New America said.
“We’ve known for years that financial aid
offers can be extremely confusing at best — and misleading at worst. This
well-documented lack of transparency creates unnecessary complexity and
confusion for students and their families, many of whom are already struggling
to pull together limited resources and a patchwork of financial aid to cover
college costs. It’s long past time that lawmakers pass the bipartisan Understanding the True Cost of College Act,
which requires college to provide clear, transparent, and comparable
information about college costs and the financial aid options available to
cover them,” said Michele Shepard,
Senior Director of College Affordability, The Institute for College Access
& Success (TICAS).
Full text of the bill is available
HERE.
The GAO report is available
HERE.
Grassley and Smith have introduced other
bipartisan legislation to help provide students and their families with better information
about the costs of college, including:
- The Net Price Calculator Improvement Act – improves the effectiveness of and access to
tools that provide students with early, individualized estimates of higher
education costs and financial aid before they decide where to apply.
- The Know Before You Owe Federal Student Loan Act – makes counseling about the likely cost of
loans compared to income an annual requirement before new student loans are
disbursed.
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