Everyone knows college is expensive, but did you know that colleges have been intentionally misleading you about the true cost? Many colleges hide the real cost of their education by “issuing financial aid letters that blur the distinction between grants and loans to make the school look more affordable.”
The Obama administration has called for colleges to make their financial aid letters more clear. The administration is starting with ten colleges. These colleges are making a commitment to provide students and families with “clear, useful information they need to make the best decisions about where to enroll and what kind of financial commitment they are taking on with their important, long-term investment in higher education.”
Each college is required to provide straightforward information on how much one-year of college will cost and the financial aid options, making a clear distinction between scholarships and grants. The colleges will also reveal net costs once grants and scholarships are taken into account, estimates of monthly payments and “vital information about student results, including comparative information about the rates at which students enroll from one year to the next, graduate, and repay their loans without defaulting on their obligations.”
Obviously, more than the ten selected colleges will need to work on their transparency, but for right now, the Obama administration has made a good start. The administration is working on a standardized form that all colleges can use. “Later this year, the administration also plans to issue a ‘scorecard’ that rates colleges on value and affordability, as defined by graduation rates and whether graduates earn enough to meet their student loan payments.”
These steps toward transparency will help many students make informed decisions about where they attend college. If students know the investment they are making beforehand, it gives them more time to focus on their education.
In the meantime, if you’re trying to figure out the true cost of a college your son or daughter might attend, feel free to contact me – I’m happy to help decipher how much you should be prepared to spend in addition to providing practical steps you can take now to afford it!
Photo Credit: xb3