NEW YORK (AP) — President Barack Obama wants to make it easier to size up the cost of college.
As part of his broad plans to make college more affordable, Obama said Friday that he would push for financial aid “shopping sheets” that make it easier for families to comparison shop between schools.
Federal education officials say the goal is make adoption of the form mandatory for schools to maintain access to federal aid. That would be a powerful incentive, as the federal government issued about $142 billion in grants and loans last year.
As it stands, officials say the financial aid award letters that schools mail out to students in the spring can be unclear or even misleading. That can result in students signing up for more debt than they realize.
For example, schools usually state an “out of pocket” cost in award letters after subtracting aid such as grants and scholarships. But some schools also subtract loans from the out-of-pocket cost. That’s despite the fact that loans actually push up costs because of interest charges.
Schools also may not spell out the type of loans that’s included in the aid package, even though the terms on federal and private loans can differ significantly.
To address the issue, the Department of Education and the newly created Consumer Financial Protection Bureau rolled out a model financial aid form in October and asked for the public’s comments on how it could be improved. On Friday, the CFPB said feedback indicated the most important figure for students is the amount of debt they would have upon graduation.
The Department of Education was required to develop the model form as part of federal education reforms in 2008. The adoption of such a form has also been widely supported by student advocates.
The push to standardize financial aid award letters comes at a time when students are graduating with more debt than ever before. The Institute for College Access & Success estimates that two-thirds of graduates have student loans, with an average debt of about $24,000.
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