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White House Urges Greater Transparency in College Financial Aid



By Catherine Groux
Posted June 06, 2012 02:18 PM

The White House is urging schools to be transparent about their overall costs.
The White House is urging schools to be transparent about their overall costs.
When students begin searching for a college, they often get swept up in the maze of financial aid requirements and regulations. With so many types of assistance available, many bachelor's degree seekers do not fully understand exactly how much their school will cost each year and how much they can expect to pay back in loans once they graduate.

"There needs to be better disclosure in what you’re really getting," Mark Kantrowitz, publisher of FinAid.org, told Forbes. "What are the true costs? The offers sometimes combine loans and grants, it's hard to know what exactly you're getting. College is one of a few major expenses where there aren't standardized disclosure documents, unlike when you buy a home, for example."

In order to draw some of the confusion out of the financial aid process, various White House officials met with the presidents and leaders of 10 colleges across the country. These schools have agreed to provide key financial aid information to all incoming students beginning next year. Officials like Secretary of Education Arne Duncan and Vice President Joe Biden are encouraging all universities across the country to follow suit.

The 10 schools, which include Arizona State University, Miami Dade College and Syracuse University, have vowed to ensure their incoming students are given basic, easy-to-understand information regarding financial aid. Among this data, freshmen will be explicitly told how much one year of college will cost, what their financial aid options are and how much they can expect to pay monthly for federal student loans.

According to a White House press release, ensuring students have this level of transparency during the financial aid process is crucial.

"Clarity and accessibility of information is necessary so that students and families can make informed decisions about where to attend college, so they can choose a school that is best suited to their financial and educational goals," the press release states. "Too often, students and families face confusion when comparing financial aid packages, some of which do not clearly differentiate loans from grants, nor distinguish private vs. federal loans, making it difficult to compare aid offers side-by-side."

The White House meeting falls at the brink of a national discussion on student loans, as the interest rates for federally subsidized student loans are set to double on July 1. Although leaders from both sides of the aisle have publicly stated their disapproval of the rising of interest rates, Republicans and Democrats are still trying to come to an agreement on how to fund a continuation of the current rate.

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