In a past post, we discussed the increased attention on the costs of college and the ever-increasing default rate for education loans. Since then, the Department of Education has unveiled a new tool for informing prospective students about the real cost of college: the Shopping Sheet. While the Shopping Sheet is not a requirement for schools, it is considered to be a new “best practice” in the world of higher education.
The Shopping Sheet seeks to provide transparency in financial aid offers and clear cost comparison between schools. This is a direct response to a common criticism heard from students; that financial aid letters often mislead the reader about the true costs of accepting aid, are confusing and euphemistic in their descriptions, and/or omit key information regarding costs of attendance. “Right now, colleges are not required to provide the full cost of attendance … or even to provide the contact information for a financial aid office,” says Lauren Asher, president of The Institute for College Access and Success (TICAS) of the Shopping Sheet.
“Countless students I meet across the country feel like the first time they really understood how much student loan debt they were in was when the first bill arrived,” said U.S. Secretary of Education Arne Duncan. “We must unravel the mystery of higher education pricing by giving students and families the information they need to make smart educational choices. The Shopping Sheet is a positive step in that direction.”
The main goal of the Shopping Sheet is to educate and inform borrowers so that they can make an educated decision before committing to a large loan package. This is achieved through the clear communication of the following information:
- The total cost of 1 year’s schooling
- Clear differentiation between the types of aid. Namely, between loans (which need to be repaid by borrowers) and grants (which are free money and are not repaid)
- Net costs after loans and grants have been applied
- Statistics on the school’s graduation rates, default rates, and median borrowing rates.
Schools that opt to use the Shopping Sheet will begin implementation during the 2013/2014 school year. Many universities have already pledged their support of the new system, including (but not limited to):
- Syracuse University
- Vassar University
- Arizona State University
- University of North Carolina at Chapel Hill
- University of Texas
While it is disappointing that the Shopping Sheet will not be universally implemented, it does provide a blueprint for the information needed to make an informed decision. Diligent students & parents can use it as reference when comparing aid offers and when doing research.
Senator Al Franken fully supports the Shopping Sheet, but also recognizes the limitations to offering it as a non-mandatory tool. “The White House’s introduction of a shopping sheet, also known as a universal financial aid award letter, is a step in the right direction, and I want to thank them for recognizing that this problem needs to be addressed. But unless a universal financial aid award form is made mandatory, colleges will still be able to use whatever form they want, and families won’t be able to compare apples to apples when evaluating financial aid offers.”
Hopefully the Shopping Sheet will start a new trend of clear and transparent financial communication between schools and students. I predict that more & more schools will jump on the bandwagon in being up front and honest about the true costs of education. What do you think?
Has your school decided to adopt the Shopping Sheet? Why or why not?