Obama Administration Releases Shopping Sheet to Clarify Financial Aid Process

By Catherine Groux
Posted July 24, 2012 01:15 PM

The Obama Administration is striving to make financial aid easier for students to understand.
The Obama Administration is striving to make financial aid easier for students to understand.
In January, President Barack Obama visited the University of Michigan to discuss what the government is doing to make college more affordable. During his speech, Obama said one of the focuses of his plan was "Know Before You Owe," an initiative that calls on colleges to provide clearer and more informative data on financial aid. In doing so, the president hopes bachelor's degree seekers will be better prepared to make smart financial decisions when it comes to selecting a school.

"...We want to push more information out so consumers can make good choices, so you as consumers of higher education understand what it is that you're getting," Obama told the crowd.

Today, the Obama Administration moved one step closer to this goal by releasing the final version of its "Shopping Sheet," a White House press release states. This form will act as a model for colleges, showing them the type of financial aid letter they should be sending prospective students so they can clearly understand the cost of their investment. These guidelines were written by the U.S. Department of Education and the Consumer Financial Protection Bureau.

According to the Project on Student Debt, 2010 college graduates left school with an average of $25,250 in debt. At the same time, U.S. Department of Education data shows that in fiscal year 2009, about 8.8% of borrowers defaulted on their student loans.

As more students fall into unmanageable debt, the Obama Administration feels many of them simply did not understand the financial burden they were taking on when they chose their particular school.

"Too often, students and families face the daunting task of deciding where to enroll, whether to write a check, or whether to sign for a student loan, without a clear explanation of what the costs mean, or how these costs compare to other colleges they are considering," a White House press release states. "As a result, too many students leave college with debt that they didn’t understand at the time that they entered school."

To help students who are simply confused about the financial aid process, the Shopping Sheet clearly outlines colleges' tuition and fees, as well as the net price students will be expected to pay after grants and scholarships are accounted for. Additionally, the Shopping Sheet shows students their options for paying for the remaining cost of college, whether it be through loans or work-study programs.

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