Recently, federal research showed that colleges are giving accepted students misleading information in their letters. According to Melissa Emrey-Arras, who led the research by the U.S. Government Accountability Office, when students get accepted to college, they will receive a document explaining how much financial aid they are eligible for. These documents, which many accept as fact, have been coming off as marketing material. They will have bolded numbers like how much a student will get for a scholarship, then fail to explain how tuition is three times that amount.
Emrey-Arras goes in-depth about how failing to provide clear-cut standard information and financial aid packaging causes students to borrow more money than they need, which turns into longer-lasting debt. This may also cause students to refrain from buying things they need because they are already in too much debt. Fortunately, this problem has been acknowledged and is starting to be addressed.
Representative Virginia Foxx, who is the top Republican on the House Education Committee, in a joint statement with Representative Lisa McClain and has introduced new legislation to make financial aid offers transparent and easy to understand.
Foxx and McClain requested a GAO (government accountability office) report which looked at over 500 financial aid offers from a nationally representative selection of colleges across the country. This report found that 91 percent of colleges and universities did not include how much out-of-pocket money the student will need to pay to attend. Half did not itemize costs, and a quarter of them just listed aid without connecting them to college costs. Many also did not clearly label what money was free and what money students would have to pay back.
There should be legal guidelines that every college must follow and include in their letters. According to the Wall Street Journal, The GAO made clear that college aid letters should include tuition, fees, other expenses, grants, loans, and what other financial options are available. In a worse case, a lack of these things can cause a student to enroll in schools they can not afford. Even more troubling, two-thirds of schools didn’t include information like students must maintain a certain grade to stay eligible for grants, and work-study programs are not guaranteed.
The Education Department does not have the authority to mandate certain disclosure to all students. However, they have a template that clearly describes all potential costs and differences between loans and grants. This template is highly encouraged, but the GAO found that only about three percent of colleges use it.
Student loans are the second largest type of household debt, so the disclosures required by schools should be treated as important as other complex money issues, like mortgages and credit cards. Some colleges retain information intentionally, they are more invested in luring students in rather than scaring them away with price shock.
Although it may be a high bar for the GAO to recommend congressional action, based on all this information that has been brought to light, it would be the next best step. Students should not have to worry about their school of choice, tricking them out of money. Higher education can already be so hard to access for many students, so the fact that colleges are deliberately lacking transparency is scandalous and dishonorable.
Legislation to address this has come up in the past. The Understanding the True Cost of College Act, was first introduced in 2012 and has since been reintroduced last year. The purpose is aimed at creating a common disclosure for colleges so families and students can do comparisons of financial aid offers. Foxx’s new bill, the College Cost Transparency, and Student Protection Act has also been introduced, but it's unclear when or if this new bill will come up for a vote.
Lawmakers should be encouraged and pushed to make policies to fight against the misinformation that these colleges have been getting away with distributing. It should be illegal to withhold such crucial information from students to get them to commit to a school.