For years, critics have cautioned that many financial aid offers shared with students and families are vague and confusing, complicating college decisions and increasing the risk of unforeseen financial hurdles. Now, more than 360 U.S. colleges and universities, including university systems in New York, California State University system, and the University System of Georgia, have agreed to increase consistency and transparency in financial aid offers, following a set of standards for award letters, The Washington Post and Higher Ed Dive report.
The commitment was announced by the College Cost Transparency Initiative (CCT). Founded in fall 2022, CCT is led by 10 higher education associations representing college presidents, financial aid offices, and admissions and school counselors.
Related: 10 hallmarks of a student-friendly financial aid offer >
Financial aid offers sent by colleges making this commitment will prominently display the estimated cost of attendance (broken down into specific categories, such as tuition, fees, transportation, housing, and meals) and the estimated net price (or the amount of money students have to pay after grants and other aid). Institutions will use plain language to describe all types of aid being offered, such as grants and scholarships, student loans, and work study; they also will explain loan terms and conditions, indicating how much student loan debt may cost over time.
In a statement, Education Secretary Miguel Cardona applauded the effort, noting the importance of “transparency, consistency, and clarity” so students and families “are able to make informed decisions about enrolling in and affording higher education.”
Momentum for transparency in aid offers
The pledge to standardize financial aid offers builds on previous federal efforts and recommendations. In 2012, the Obama administration created the Financial Aid Shopping Sheet to help colleges provide standardized financial aid information, but there was limited uptake, the Post reports. A 2022 study from the Government Accountability Office (GAO) analyzed 522 financial aid offers from a nationally representative sample of colleges, finding that 63% of colleges followed no more than half of 10 best practices for aid offers identified by the U.S. Department of Education. Meanwhile, 91% of colleges understated or omitted the net price in their aid offers. The GAO recommended that Congress pass legislation requiring higher education institutions to clarify and standardize the information in financial aid offers.
Earlier this year, there was a bipartisan effort to create a federal net price calculator and universal financial aid offer form. Rep. Virginia Foxx (R-North Carolina), the chair of the House Committee on Education and the Workforce who requested the GAO study, also has reintroduced the College Cost Transparency and Student Protection Act, which would standardize aid letters, Higher Ed Dive reports.