Student loans: Will more transparency help?
Student loans, tuition, and other costs will come with more disclosure from 10 colleges and universities. Estimated monthly payments on student loans after graduation will keep families from taking on too much debt, White House says.
WASHINGTON — Ten U.S. colleges and universities have committed to provide more information to students about tuition and other costs, including estimated monthly loan payments after graduation, as part of a federal push to improve disclosure to help prevent financial-aid recipients from overextending themselves, the White House said.
Leaders from those institutions, which include the state university systems in Maryland, Massachusetts, New York and Texas, were scheduled to meet Tuesday in Washington with Vice President Joe Biden, Education Secretary Arne Duncan and Richard Cordray, director of the Consumer Financial Protection Bureau to discuss financial aid transparency.
The White House said more disclosure is key to making college more affordable.
“Clarity and accessibility of information is necessary so that students and families can make informed decisions about where to attend college, so they can choose a school that is best suited to their financial and educational goals,” the White House said.
“Too often, students and families face confusion when comparing financial aid packages, some of which do not clearly differentiate loans from grants, nor distinguish private vs. federal loans, making it difficult to compare aid offers side-by-side.”
The announcement comes as rising student debt has become a major issue.
Total student debt rose more than 3 percent in the first three months of the year to $904 billion, part of a surge in outstanding student loans over the last decade, according to a report last week from the Federal Reserve Bank of New York.
The 10 colleges and universities committed to providing key information, in an easily understandable way, to all incoming students as part of their financial aid packages starting in the 2013-14 school year.
The information includes the cost of one year of college, financial aid options such as grants and scholarships, and estimated monthly payments after graduation on federal student loans.
The colleges also agreed to provide important comparative data about the rates at which students graduate and repay their loans.
In addition to the state university systems, participants in the new disclosures are Arizona State University, Miami Dade College, North Carolina A&T University, Syracuse University, the University of North Carolina-Chapel Hill and Vassar College.