Congressman Jeff Van Drew Introduces Legislation to Empower Consumers by Standardizing Financial Aid Offer Forms
FOR IMMEDIATE RELEASE
April 12, 2019
CONTACT – Mackenzie Lucas 1(202) 225-6572
Today, Congressman Van Drew introduced the Understanding the True Cost of College Act which aims to standardize financial aid communications between institutions of higher education and students. The goal is to help students and families make informed financial decisions about financing their education. The bill requires stakeholders to develop standard definitions of various financial aid terms and would establish a universal standardized financial aid award letter so that students can compare financial aid packages from different schools as accurately as possible.
“Right now, we are in the season where folks are deciding where to go to college and a big factor of that decision is their financial aid package. The best thing we can do for these students and for our economy is to help them make informed financial decisions about how much a college education will cost,” said Congressman Van Drew.
Research shows that common practices for communicating financial aid are problematic in many ways, including using confusing and conflicting terms, variable bottom line calculations, failure to differentiate between types of aid such as scholarships and grants, which don’t have to be repaid, and loans, which do have to be repaid. Oftentimes, different colleges and universities will use the same terms, but have different definitions. These inconsistencies cause real confusion which could lead students to make wrong decisions, including getting into debt when they did not intend to do so.
The crippling debt of student loans is reaching $1.56 trillion among 45 million borrowers, causing people to delay home ownership, raising a family and moving comfortably into the middle class In 2018, 69 percent of college students took out student loans and graduated with an average debt of nearly $30,000. “These staggering amounts of debt are holding young people back from achieving critical milestones in their lives and are also a drag on our long-term economic prosperity. Empowering consumers to make complex financial decisions easier to understand is a common-sense first step,” said Congressman Van Drew.