Dear Commons Community,
Senators Al Franken, Democrat of Minnesota, and Charles E. Grassley, Republican of Iowa, are co-sponsoring three bills designed to make the cost of college clearer before applying to a school, before picking one, and on a continuing basis while trying to complete a degree.
The first bill is the Net Price Calculator Improvement Act. This calculator would allow college shoppers to input data and get a rough sense of how much financial aid a school might offer them. This calculator would be vital given that too many families dismiss colleges with high sticker prices out of hand, without realizing that few people pay the sticker price at many private colleges anymore. The bill would force schools to put the calculator on the same webpage where families look for cost and admission information. Plus, it would encourage the Department of Education to develop a universal calculator containing the data of every college, which would make comparisons easier.
Bill No. 2 is the Understanding the True Cost of College Act, and aims to force colleges to write clear financial aid award letters. These letters are often so badly crafted that some of Senator Franken’s constituents complained that they could not tell whether they were being offered grants (which they did not have to pay back) or loans (which they generally did).
“Most financial aid administrators mean well,” said Brendan Williams, director of knowledge for uAspire, which helps students and others decode the financial aid system. “But sometimes they lose sight of where students are when getting these letters. It’s a foreign language almost.”
The True Cost bill would mandate the use of a standard template for award letters, so that recipients would have a clear sense of what college would cost, how much money they might have to borrow and how much grant money was being offered, free and clear.
The third bill, the Know Before You Owe Act, co-sponsored with Senator Joni Ernst, Republican of Iowa, is aimed at giving students a running total of their debt and its ramifications during each year at school. Currently, students get some loan counseling on the way in and some more on the way out, but that’s it. If this bill passes, the annual check-in will include an explanation of students’ projected debt-to-income ratio based on the average salary for people in their major. Borrowers would also have to manually enter the amount of federal loans they wished to use, so that they’d be making a conscious decision about debt and not simply checking a box to grab everything they were eligible to borrow.
The chance of these bills passing both houses of Congress are slim but parts of them might be included in the Higher Education Authorization Act.