A “Shopping Sheet” that will make it Easier to Understand College Costs
The excitement of getting into college is all too often followed with the anticipation and worry about how to pay for it. Financial aid award letters, which intend on laying out the cost of college, too often do a poor job of providing the bottom line on how much aid, grants, scholarships, and student loans will be needed to pay for college. To help with this, the Obama Administration released a model financial aid award letter called the Shopping Sheet — an individualized standard financial aid award letter that will help students and their families understand the costs of college before making the final decision on where to enroll. The Shopping Sheet will standardize award letters, making it easier to comparison shop and provide students with key information, including:
- How much one year of school will cost;
- Financial aid options to pay this cost, with a clear differentiation between grants and scholarships, which do not have to be repaid, and loans, which do;
- The net costs after grants and scholarships are taken into account;
- Vital information about student results, including comparative information about default rates, graduation rates, and median debt levels for the school;
- And, potential monthly payments for the federal student loans the typical student would owes after graduation
The Shopping Sheet is the culmination of a joint effort between the Consumer Financial Protection Bureau and the U.S. Department of Education to provide individuals with critical information about their financial decision to attend college in a clear, concise, and standardized format that facilitates easy comparisons across institutions.
To coincide with the release, the Secretary of Education Arne Duncan sent an open letter to college and university presidents, asking them to adopt the Shopping Sheet as part of their financial aid awards starting in the 2013-14 school year.
“We must unravel the mystery of higher education so that students can invest wisely and make the best, most informed decision possible about where to enroll.” Secretary Arne Duncan, U.S. Department of Education
Read the full letter from U.S. Department of Education’s Secretary Arne Duncan here.
In addition, the U.S. Department of Education recently announced a new streamlined website and several social media tools that will make it easier for students and families to navigate the financial aid process and make informed decisions about paying for college.
The new website, StudentAid.gov, along with the Financial Awareness Counseling Tool that launched last week, serves as the Department’s response to President Obama’s June 7 directive to enhance online and mobile resources for loan repayment options and debt management.
"We want to give students and parents the information they need to make smart and affordable education choices. A big part of that is educating people on the most affordable way to finance a college education: federal student aid," said U.S. Secretary of Education Arne Duncan. "This new, easy-to-understand website will help families better navigate the process of planning and paying for college. And it will help students manage their loan payments after they graduate so they avoid falling into default."
Also included on StudentAid.gov is another tool, the Student Loan Debt Collection Assistant, which is designed to help borrowers who have fallen behind on their federal or private student loan payments. For borrowers who have missed payments but are not yet in default, this tool can help them avoid thousands of dollars in penalties and fees by helping them access an alternative payment plan. For borrowers already in default on their federal student loans, this tool offers an added benefit — clear information on how to access the full range of special repayment options available to federal student loan borrowers. The tool also provides tips to borrowers with private student loans on how to negotiate with debt collectors.
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