For many students who apply to college seeking financial aid, the cost ends up much higher than the estimates schools provide, particularly those schools trying to appear more attractive to prospective students.
House and Senate lawmakers want to end the bait-and-switch practice by passing legislation to force colleges and universities to disclose the true cost of attendance in their financial aid offers.
Sen. Charles E. Grassley, an Iowa Republican, plans to introduce a measure in the coming weeks that would require colleges and universities to use a universal financial aid offer form that would clearly outline the actual cost of attendance. Sen. Tina Smith, Minnesota Democrat, co-sponsored the bill with Mr. Grassley in the previous Congress. An identical measure has bipartisan support in the House.
The legislation was first introduced in 2012 and while it has had the backing of lawmakers in both parties, the bill has never gained traction in Congress.
Advocates hope a recent study by the Government Accountability Office will provide momentum for Congress to pass the measure this year.
The GAO report found at colleges and universities it studied that most failed to reveal to prospective students the true cost of attendance, leaving out hefty expenses such as meal plans in some cases, or subtracting from the cost of the loans that students and parents will have to pay back.
Overall, the GAO found that 91% of colleges in their financial aid offers fail to provide students with “a complete estimate of the net price” which is the amount a student can expect to pay for college.
According to the GAO, college and university officials provided varying reasons for failing to fully disclose costs, including a lack of staff or technology needed to implement the changes. Another leading reason for the obfuscation, the GAO found, is competition with other schools and a fear of causing “sticker shock” if a school reveals its true price tag.
“Some stakeholders said that colleges that follow the best practices by including information on the full cost of attendance in a financial aid offer may be placing themselves at a competitive disadvantage to colleges that do not include this information,” GAO officials wrote in the report.
College enrollment has been on the decline for the last three years and is down roughly 7% from 2019, according to the National Student Clearinghouse Research Center. The dip has slowed, but the overall decline continues. It has left colleges struggling to recruit students and forced some colleges and universities to shutter or be absorbed by other schools.
Edward Conroy, a senior education policy adviser at New America, a public policy think tank, said the schools are not trying to scam students.
“But they are competing for students, and so they’re trying to paint themselves in the best possible light, and that’s understandable,” said Mr. Conroy, who previously worked as a financial aid officer at UCLA. “But students and their families are making one of the biggest financial decisions of their lives. There’s almost no other financial decision this large that anybody engages in, in America.”
New America is among 35 organizations, including the U.S. Chamber of Commerce, NAACP, Partners for College Affordability and Public Trust and the Institute for Higher Education Policy, that back the financial aid transparency legislation.
The bill would standardize financial aid offer forms and require minimum information such as cost of attendance, grant aid, the total amount a student would be responsible for paying and disclosures about student and parent loans.
“We think that there should be some sort of bare minimum, showing what every student gets,” Mr. Conroy said.
Sen. Joni Ernst, an Iowa Republican and co-sponsor of the legislation, said a standardized financial aid offer form would make it easier for students to determine which school is more affordable, especially if they receive multiple offers.
“The one time students should be given a cheat sheet is to reveal the true cost of college tuition,” Ms. Ernst told The Washington Times.