Dive Brief:
- A group of 10 higher education associations are creating a task force in a renewed effort to make the financial aid offers that colleges present to students clearer and more consistent.
- They hope that standardizing the information applicants receive after they are admitted to different colleges will improve the sector's pricing clarity, accuracy and transparency.
- The new task force's chair is Peter McPherson, who recently retired after more than 16 years as president of the Association of Public and Land-grant Universities.
Dive Insight:
College pricing can devolve into an opaque mix of terminology — tuition, fees, net price, funded financial aid, unfunded financial aid, federal student loans, private student loans, scholarships, grants, work-study — contributing to a system that even higher education experts find confusing.
This can make the process of applying to college and choosing an institution difficult for students and families, especially those who are price sensitive or who aren't familiar with the ins and outs of the system. It's particularly concerning for underrepresented and low-income students, as those who think their families can't afford to pay for college are less likely to attend.
Some higher education leaders and lawmakers have for years championed the cause of standardized aid package formats. The National Association of Student Financial Aid Administrators has supported federal standards for financial aid awards, although it's also acknowledged that institutions want to deliver information tailored to their own students' needs.
So far, the idea has failed to fully reshape the higher education marketplace.
In 2012, the U.S. Department of Education asked institutions to voluntarily adopt a standardized form known as the Financial Aid Shopping Sheet, which was intended to help students compare colleges’ costs and aid packages. Only about 1,950 institutions agreed to use it by December 2013. There were more than 4,700 degree-granting Title IV institutions at the time. The sheet has since been renamed the College Financing Plan.
Bipartisan legislation introduced in 2019 and again in 2021 would have required the Education Department to create standard terminology and a format for financial aid offers. It called for a consumer-friendly form including information like a breakdown of a student's estimated cost of attendance, financial aid that does not need to be repaid, and loans being recommended within a financial aid package. Lawmakers never voted on either bill.
The new task force, called the Paying for College Transparency Initiative, will again try to create a set of standards or principles for the financial aid offers colleges send to students. No deadline has been set for it to complete its work, and any recommendations that it produces will not be binding, McPherson said in an emailed statement.
But he argued college leaders agree that clarity, accuracy and consistency are needed.
"We know that there is interest all around in making financial aid offers more clear and transparent for students — from lawmakers, advocacy groups, and institutions themselves," McPherson said. "Despite the appetite for change, there hasn’t been much change. By bringing together the leaders from associations that represent institutional stakeholders, and gathering input from practicing financial aid administrators, students, and parents, we hope to change that."
The American Council on Education, National Association for College Admission Counseling and NASFAA are supporting the effort. It will gather information from managers who work in financial aid, admissions and enrollment at different types of institutions.
“NASFAA has done significant work — including consumer and student testing — on best practices in developing financial aid offers,” NASFAA President Justin Draeger said in a statement. “The financial aid community is excited to engage with this group of higher education leaders to find workable solutions that will help students and families.”
The members of the new task force include:
- Ted Mitchell, president, ACE.
- Angel Pérez, CEO, NACAC.
- Justin Draeger, president and CEO, NASFAA.
- Walter Bumphus, president and CEO, American Association of Community Colleges.
- Mildred García, president & CEO, American Association of State Colleges and Universities.
- Barbara Snyder, president, Association of American Universities.
- Mark Becker, president, APLU.
- Barbara Mistick, president, National Association of Independent Colleges and Universities.
- Rebecca Martin, executive director, National Association of System Heads.
- Robert Anderson, President, State Higher Education Executive Officers Association.
