Transparency Coming for College Financial Aid

Last week I blogged about the confusion engendered by many colleges and universities when they send students details of their financial aid packages along with their acceptance letters. The terms and conditions spelled out are often opaque and sometimes deceptive. “If Congress doesn’t act,” I suggested, “the Commonwealth of Virginia could require a standardized letter for all state institutions.”

It turns out that Virginia is moving in that very direction. Beverly Covington, SCHEV’s legislative liaison, informs me that the General Assembly has instructed SCHEV in its budget language to review their financial-aid award letters.

“During this review,” reads the budget, “the Council shall identify opportunities for improvement as well as best practices for … clarity and completeness of the information provided on gift aid as well as students’ responsibility regarding student loans or work study.” 

SCHEV will develop policies to make the following information  available to the student: (1) a breakdown of the components of the institution’s cost of attendance, designating billable charges; (2) a clear identification of each award, indicating the type of aid; (3) the use of standardized terminology consistent with the National Association of Student Financial Aid Administrators; and (4) whether awards are condition and what the criteria are for renewal.

The Council shall report findings to the House Appropriations and Senate Finance Committees by Dec. 1, 2018.

Also, notes Covington, the General Assembly authorized SCHEV to create an office of the student loan ombudsman. The Council is currently working to fill the position.

Bacon’s bottom line: Needless to say, this is all very positive. Higher-ed institutions need to provide students the information they need to make informed choices. I’m delighted to see Virginia taking the lead in consumer transparency.

The cost of attendance at Virginia institutions of higher education is still way too high, and there is no substitute for bringing soaring tuition, fees, room, and board under control. But at least students will have a clearer idea now of the financial commitments they are making. We should see fewer young people finding themselves over their heads financially, dropping out, and floundering in thousands of dollars in debt they can never repay.

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2 responses to “Transparency Coming for College Financial Aid

  1. We bought a new truck last year. Even though we paid cash – We were awash in govt-required “transparency” paperwork.

    I’m of two minds about it. On one hand, I’m “okay” with the idea that the govt is riding herd on this product – and others; on the other hand – when I hear Conservatives and Libertarians holler loud and long about the “harm” of “too many” regulations – I get that also.

    But there are cries of “too much” and “bad” regulation that is nanny-state also to “protect” consumers from things like payday loans and such.

    So the irony is – that even those who align themselves with the “too much regulation is not good” mantra – those same folks are sometimes almost strident in their demands that the Govt “force” … transparency… which is also – “regulation”. Right?

    Heckfire – Next thing you know – they’ll start charging Colleges with deceptive practices and maybe even a “lemon” law where kids get their money back if they can’t find a job!!!

    I dunno. It shouldn’t take an Einstein to figure out the game the Colleges are playing… it’s a lot like the Car Dealer showing you the base price… then the price with options … then he/she will “give” you a huge cash bonus for buying the car. Sounds a lot like what the Colleges are doing.. and no..as far as I can tell.. they haven’t told the car dealers they can’t low ball you then call.. giving you your own money back – “cash back”.

    Lordy!

  2. The thing about forcing transparency is, everyone wants it “kept simple” so the consumer can make an “apples to apples comparison.” But sometimes what you want to compare, what you want transparency about, is complicated as hell, and the numbers have to be carefully defined, qualified, conditioned and footnoted — all this mandated in bureaucratese written by professional obfuscaters. You end up with government regulations mandating a six page disclosure form.

    Is that better than no transparency? I think yes; I’d rather work on fixing the disclosure requirements than on stopping the disclosure. If that’s what it takes for parents to learn about what little Johnny has really been offered by State U., versus Private Nirvana, so be it. In that circumstance I sure would have read every line of a six page disclosure form very carefully.

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