New Financial Aid ‘Shopping Sheet’ Gets Public Feedback
College students need to have clear information about how much debt from student loans they’ll have at graduation and how much they’ll owe in student loan payments each month, according to public comments about a streamlined financial aid disclosure form proposed by the Obama administration and the Consumer Financial Protection Bureau (CFPB).
The streamlined form, which would provide students with a breakdown of college costs, including how those costs compare to the costs of an average student at a particular school and at comparable public and private schools, and give students a firm idea about loan payments and other kinds of financial aid, was proposed in response to issues such as rising debt from student loans, which surpassed debt from credit cards last year and is nearing $1 trillion, and the increasing number of student loan defaults.
In October, the CFPB and the U.S. Department of Education released a prototype of the so-called “shopping sheet” and asked students, parents, and educators to weigh in on the form to help improve it. In just a few days, the CFPB received more than 22,000 visitors to its website who sought more information and left comments (“CFPB Hears from Students About New Financial Aid Disclosure,” American Banker, Jan. 27, 2012).
On Friday, the CFPB released a memorandum summarizing the feedback it received regarding the form:
- The top five most important features to commenters were 1) estimated debt at graduation, 2) estimated monthly payment after graduation, 3) likely ability to repay loans, 4) complete breakdown of individual school costs by category, and 5) the ability of students at individual schools to repay student loans
- Information that commenters considered critical included clear indications of which financial aid requires repayment; costs that are broken down per year; student loan and work-study options; graduation rates; how much money is owed upon graduation; and information on monthly repayment amounts and length of repayment
- Federal work-study information needs to be clarified (because schools may have limited work-study options and eligibility does not guarantee a position or full earnings) and should not be included in information about student loans since work-study is not financial aid that needs to be repaid
- Student loan default needs to be clearly defined and explained and data about default rates for individual schools needs to be clearly communicated
- Information on other financial aid variables should be provided, such as family savings, Parent PLUS loans, living expenses, and interest rates
- Information on different student loan repayment and forgiveness options based on average staring salary should be included
The CFPB said it was seeking additional feedback form students, parents, and education to improve the shopping sheet.
