The Obama administration is asking the nation’s universities to adopt a standard and simple financial-aid form that would make it easier for students to understand exactly the costs of their loans at different schools across the country.
In a conference call with reporters July 23, Education Secretary Arne Duncan and Richard Cordray, director of the Consumer Financial Protection Bureau, said they will urge American universities to adopt the new form in time for the 2013-14 school year.
Duncan said the administration lacks the authority to force schools to use the form.
Cordray, the former Ohio attorney general, said: “No consumer should take on a large amount of debt without understanding the costs and the risks. Too often, students receive financial-aid award letters that are laden with jargon, use inconsistent terms and calculations, and make it unnecessarily difficult to compare different financial-aid awards side by side.”
“Students need to know how much their loans are ultimately going to cost when all the interest and fees and other costs are factored into the equation,” he said.
Cordray, whose new agency helped devise the form, said it “is a simple, common-sense form.” The single-page form will show potential students how much a university charges for tuition, housing and books, what grants and loans are available, and a website to determine the repayment options.
Duncan said that the forms used by universities today all look different and often do a poor job of explaining how much the loans would ultimately cost. “Folks ought to be able to make an apples-to-apples comparison,” he said.
Columbus State Community College spokesman Will Kopp hasn’t seen the new form but said it sounds useful. “Anything that helps parents and students shop for a college and gives more information has to be a good thing,” he said.
Kopp suspects much of the information that will be included in the uniform letter is already available in some fashion. But if the government has found a way to put it together in an easier-to-use format, he’s all for it.
Bruce Johnson, president of the Inter-University Council of Ohio, said the intent sounds similar to that of an existing national voluntary effort that Ohio’s public four-year universities already use. The council represents the state’s 13 public four-year universities.
In 2008, former Gov. Ted Strickland and Chancellor Eric D. Fingerhut asked the state schools to report college costs and academic effectiveness through a common web report, the College Portrait, which the schools did, Johnson said.