As students applied for college this year, many were hit with an unexpected setback. The FAFSA—the tool that allows students to apply for federal financial aid—didn’t become fully available online until almost four months later than usual.
Like cascading dominos, that delay has led to a slew of problems in the college admissions process. Students are visiting colleges, meeting with potential professors and charting their next steps before even receiving an aid offer. Many students will have to decide on a college, or whether to go to college at all, without even knowing how much they will pay to attend.
But it’s not the first time students have faced this decision without a clear understanding of the dollars and cents. At most universities, that’s the norm.
A 2022 Government Accountability Office (GAO) report revealed 91 percent of colleges understate the price students will actually pay to attend. Not a single school followed all the best practices identified in the GAO’s report, and two-thirds failed to mention important financial details in their communications with students. This prevents students from planning ahead or considering their borrowing costs.
Even worse, a third of colleges listed loans as grants. One study found various colleges were referring to just one type of federal loan by 136 different names, some of which didn’t even include the word “loan!” Institutions often used this tactic to zero out the total, making it look like students would pay $0 to attend. Only when students read the fine print would they see much of that “aid” was actually a loan to be paid back with interest.
This tactic is a key piece of the puzzle as to why the cost of college keeps going up. And while it’s not the only factor, when colleges and universities hide the ball, students can’t shop around for their best option.
This doesn’t fly in any other financial arena. A new home or car owner has information down to the finest detail, but students borrowing similar amounts too often do not have access to an accurate bottom-line.
Students fresh out of high school are taking their first steps into adulthood while making one of the biggest financial decisions in their lives. Yet, they often sign the dotted line without knowing exactly how much they’re expected to pay.
That’s why we introduced a bipartisan bill, the Understanding the True Cost of College Act. When colleges offer students financial aid packages, we want to ensure they are comparable among colleges. The information students receive should use the same terms, clearly show the amount the student would borrow and allow students to compare their options apples-to-apples, not apples-to-oranges.
Bipartisan, bicameral solutions like this empower students, and greater cost transparency can help lower the cost of a college education. Under our proposal, aspiring scholars would know the cost of each option from the jump. The same GAO report that found 91 percent of colleges understate their attendance costs also noted our bill would help fix many of the issues students are currently up against.
This year’s FAFSA delays emphasize exactly why students need timely, accurate financial breakdowns. Students naturally struggle to make the right choice when they’re rushed or uninformed. Before students take the leap—and tens of thousands of dollars in loans—Congress and colleges should help make sure they have the full picture.
Chuck Grassley is the senior senator from Iowa and the ranking member of the Budget Committee. Tina Smith is the junior senator from Minnesota and a member of the Health, Education, Labor and Pensions Committee.
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