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.
Ten U.S. colleges and universities have committed to provide more information toÂ students about tuition and other costs, including estimated monthlyÂ loanÂ 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.
âClarity and accessibility of information is necessary so thatÂ studentsÂ 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,â the White House said.
âToo often,Â studentsÂ and families face confusion when comparing financial aid packages, some of which do not clearly differentiateÂ loansÂ from grants, nor distinguish private vs. federalÂ loans, making it difficult to compare aid offers side-by-side.â
The announcement comes as risingÂ studentÂ debt has become a major issue.
TotalÂ studentÂ debt rose more than 3 percent in the first three months of the year to $904 billion, part of a surge in outstanding student loansÂ 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 incomingÂ studentsÂ 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 federalÂ studentÂ loans.
The colleges also agreed to provide important comparative data about the rates at whichÂ studentsÂ graduate and repay theirÂ 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.