The University of North Carolina at Chapel Hill and Syracuse University are among schools promising to give new students and parents more information on costs and financial aid, Vice President Joe Biden said.
Biden joined administration officials and college and university presidents in Washington to announce plans for a new “Financial Aid Shopping Sheet,” a project of the Education Department and Bureau of Consumer Protection, that would spell out for the first time student-aid information in one concise form. The schools’ participation would take effect in the 2013-14 school year.
It’s “a commitment to transparency,” Biden told reporters at the White House during a meeting with college and university presidents.
Students and parents have complained about the confusing array of financial-aid offers, including the lumping together of scholarships and federal student-aid grants, making it difficult to determine total costs. There are no federal requirements to disclose interest rates or total payments on loans.
Under the “shopping sheet,” participating schools will provide students with a standard format for financial-aid letters, including the net costs after grants and scholarships of one year of school, estimated monthly payments for federal student loans after graduation, and statistics for graduation, default and retention rates.
Ten schools and university systems representing 5 percent of all enrolled U.S. college students, or 1.4 million, will participate in the financial aid pledge.
“I don’t know how it’s ultimately going to be branded, but I love this ‘know what you owe before you go,’” said Nancy Zimpher, chancellor of the State University of New York, which has 64 campuses and 465,000 students. She said the state university system will also feature a standard “comparability” form so students and parents “can shop for the best value.”
As part of his election-year campaign, President Barack Obama is pressing U.S. lawmakers to avert the doubling of student-loan interest rates to 6.8 percent from 3.4 percent on July 1. The president, in economic messages to college-age voters, has said that if Congress doesn’t extend a freeze on the rates for government loans, as many as 7.4 million students and families will have to pay an additional $1,000 a year.
The cost of a one-year extension is almost $6 billion, according to the nonpartisan Congressional Budget Office.
Republicans, who control the House, passed a measure preventing the scheduled increase. To cover the cost, the legislation would take $5.9 billion from a preventive health-care fund, which House Speaker John Boehner called “one of the slush funds” in the 2010 health-care overhaul. House Democratic Leader Nancy Pelosi responded by saying that the move would be “another assault on women’s health” as the fund provided care for women.
The bill freezing interest rates on student loans is awaiting a vote in the Senate. Congressional Republicans on May 31 sent a letter to Obama suggesting alternative funding to pay for the cost of the freeze, though the White House hasn’t responded, Senate Republican Leader Mitch McConnell told the chamber today.
“Why doesn’t the vice president just pick up the phone, choose one of the proposals we laid out in our letter and then announce” at today’s meeting “that the problem’s been solved?” McConnell said.
“We’re wide open” on considerations, Biden told reporters at the White House, although the administration isn’t willing to “trade off” student loans for other vital services. He said he hoped Congress wouldn’t be “playing games” by using health care to pay for the freeze.
The White House billed the financial disclosure statement as another element of the administratin’s effort to help middle class families. Before a speaking engagement June 7 at the University of Nevada-Las Vegas, Obama will announce he’s issuing a presidential directive for his administration to take steps to better inform students and parents about repayment options on loans, according to a White House statement.
Debt from educational loans in the U.S. rose 3.4 percent to $904 billion in the first quarter, the Federal Reserve Bank of New York reported May 31. All educational debt, including government and private loans taken out by students and parents, is estimated at $1 trillion, according to the Consumer Financial Protection Bureau.
Biden was joined in the meeting today by Education Secretary Arne Duncan, Consumer Financial Protection Bureau Director Richard Cordray and White House Domestic Policy Director Cecilia Munoz.
Other participating schools include Vassar College; Arizona State University; Miami Dade College; North Carolina Agricultural & Technical State University; the University of Massachusetts system; the University of Maryland system, and the University of Texas system, according to a White House statement.