Frank was built on the premise that higher education should be accessible to every citizen. And while as a nation many may agree with that, a strong debate remains over how to make it a reality.
We believe the first step in making college more accessible, is to tear down the wall of mystery that casts confusion around important information about college loans and expenses and to adopt common, simpler language. To pull back the curtain, expose the wizard, and to change the way we talk about the admissions process once and for all.
While this isn’t an issue that will be solved overnight, a movement is brewing toward making the dream of a college education a reality for many more Americans. And it’s starting in an unlikely place — directly on the Senate floor.
At this moment, three pieces of legislation currently sit with the Senate that aim to reshape the way we present the expenses associated with a college degree.
Below we look at what’s before us, as well as what we’d like to see to make the costs of higher education and the realities of financial aid more transparent for all.
What’s needed to make higher education affordable, and accessible, to all?
Demystified tuition sticker prices. The tuition prices attached to top-tier colleges and universities can appear astronomical when viewed before financial aid numbers take effect. Unfortunately, many families get “sticker shock” too soon, and are deterred away from applying to their top schools. They are unaware that few (if any) students will ever pay the full amount. The combination of loans, grants, scholarships and work study opportunities can cut deeply into the original tuition cost, putting a student’s dream school well within reach. Making higher education more accessible means taking the mystery out of college’s trust cost.
The Net Price Calculator Improvement Act on the Senate floor right now aims to amend the Higher Education Act of 1965 to give students a more accurate view of tuition prices.
The calculator would provide the individual net price for attendance, including tuition and fees; average annual cost of room and board for a first-year, full-time student; average annual costs of books and supplies; and estimated cost of other expenses (including personal expenses and transportation). It would also calculate total need-based grant aid and merit-based grant aid from all sources. It would also factor in the percentage of first-time, full-time undergrad students enrolled in that institution that receive any type of grant aid to give students a better idea of the financial help that exists. These calculations are vital to helping students understand what it costs to attend the schools they’re after.
Financial aid letters written in plain English. For many students, the process for financial aid goes something like this — you fill out your FAFSA®, wait patiently for your aid offer to arrive in the mail… only to struggle to decode what it actually says. How much are they offering? Is it a scholarship or a federal loan? Is that more than or less than the other offers you’ve received?
Admissions officers don’t mean to be obtuse, they’re simply using a language the rest of us don’t understand – because they invented it. However, a student who doesn’t understand the offers being presented cannot make an educated decision as to which is the best option for their future. That must change.
A bill on the Senate floor right now — Understanding the True Cost of College Act – aims to address this, mandating the use of a standard template for award letters so recipients would have a clear sense of what college would cost, how much money they might have to borrow and how much free grant money was being offered.
The form would include specific details and disclosures regarding: the cost of attendance; aid that does not need to be repaid; the net price that a student or family is estimated to pay; work study assistance; types and amounts of loans, including monthly repayment amounts; sources for additional information; deadlines and the process for accepting financial aid; the academic period covered by the aid; default rates; the percentage of students who have student loans and the median debt at graduation for students; private loans; scholarships; and the terms and conditions of federal financial aid.
Arming a student with all of this information, and then allowing them to use this sheet to compare all offers, would empower them to make the best choice for their future and allow more students to take advantage of the financial aid opportunities they need to continue their education.
Better communication regarding future debt. This is huge. We must provide students with more education about their financing options, not only about the types of aid available, but what different options mean long-term in terms of repayment (or not). Helping students understand what each financial aid package means for their future will help them make more informed decisions regarding how much future debt they’re looking at and what their options are for repayment.
One of the bills we’re most excited about right now is the Know Before You Owe Act – designed to give students a running total of their debt and its ramifications during each year at school. If passed, students will receive a projected debt-to-income ratio each year based on the average salary for people in their field to help them understand what they’ll owe, how long it will take to pay back, and how to budget accordingly. Knowing this information while they are still in school (or even before they’ve borrowed a dime) can help set the student up for financial success later on.
More information about student outcomes and value. If we really want to help students make more informed decisions about their plans for higher education, we need to help them understand what happens after. That takes colleges and universities publishing more information regarding the estimated price of individual degrees alongside information about employment opportunities for expected degree earners, job market information; and data related to how long, on average, it really took the degree-holder to pay for their education.
Understanding that today’s student values education less and money more, how can colleges and universities do a better job explaining what students are receiving for that cost? If we believe that higher education affords more opportunities and strengthens our economy, how can we best tell that story to our students? That, more than anything, is our responsibility and our duty to them. To make the case for why investing in their future, is the best thing for them.
At Frank, we believe in making higher education affordable and accessible to all. We’re working to do our part by simplifying your FAFSA® form to college, but through increased transparency, we know that we can get more students on the path to higher education.