Unraveling the Mystery of College Costs

Posted on July 24, 2012 by Cameron Brenchley

Waiting for college acceptance letters can be a nerve-racking experience filled with excitement and anticipation, but once approved, students and their families begin another anticipatory wait for financial award letters. The 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 and scholarships, and student loans will be needed to pay for college.

An example of the easy-to-read information on the Shopping Sheet

To help solve this problem, the Obama Administration released a model financial aid award letter today called the Shopping Sheet. 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.

To coincide with the release, 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. In the letter, Duncan explained that “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.”

Key Policy Letters from the Education Secretary or Deputy Secretary
July 24, 2012

July 24, 2012

Dear College President:
Getting students successfully through college and into the workforce is a shared responsibility among federal and state governments, institutions like yours, and students and families. In order to meet our national goal of producing the highest proportion of college graduates by the end of this decade, we must make it easier for parents and students to finance their college education and to understand their financial obligations. It starts with transparency.
Today, I am asking you to voluntarily adopt a new “Shopping Sheet” we have developed that clearly shows prospective students the cost of their college education. The “Shopping Sheet” reflects input from thousands of students, parents, college counselors, financial aid administrators, and other higher education officials. It is designed to be consumer-friendly while putting as little burden as possible on you and your institution. We believe the “Shopping Sheet” accomplishes both while allowing colleges to include additional financial aid information specific to each institution.
The “Shopping Sheet” can be viewed on the Department’s Web site athttp://collegecost.ed.gov/shopping_sheet.pdf. And your institution may indicate its commitment to using this tool, or direct any questions regarding its adoption, to shoppingsheet@ed.gov.
Students should not have to wait until after they graduate to find out the size of their monthly student loan payment. Families choosing a college should have clear and comparable information in a common format to guide their choice. And no one should forego college because they think they cannot afford it.
Our goal is that more students will arrive at school each fall less worried about how they will pay for college and more focused on how they will complete college. We know that you share that goal, and so we hope that you will join your colleagues across the country who have already agreed to adopt the “Shopping Sheet” starting in the 2013-2014 school year.
Thank you very much for your consideration of this request, and for the important work you do every day to provide a quality college education to young people and adults and to help secure America’s future.

	Sincerely,
	/s/
	Arne Duncan