Chicago State University, Northern Illinois University and Northeastern Illinois University have signed onto a new commitment to standardize financial aid offers so admitted students can more easily compare costs and understand what they will owe after graduation.
But three big-name schools in the state – Northwestern University, University of Chicago and University of Illinois Urbana-Champaign – were absent from the list of the more than 300 colleges that have signed onto the College Cost Transparency Initiative, announced Tuesday.
“The number of schools on the list was kind of discouraging,” said Sara Yelich Miller, director of Green Halo Scholars, a nonprofit that supports low-income and first-generation students in Chicago’s western suburbs through the college application process. “I always tell our students, ‘There are thousands and thousands of colleges out there.’ And then to see 360 as part of this initiative was a bit of a bummer. But maybe some peer pressure will work.”
A group of associations representing college presidents, financial aid officers, admissions counselors and other higher education professionals put together the initiative with the goal of making financial aid letters, often called award letters, more clear and consistent from institution to institution.
Students and families rely on these letters to figure out the affordability of their college options. But unlike other transactions involving big sums of money, like mortgages, the letters are not federally regulated. They look vastly different from college to college and are notoriously hard to understand.
“Some look, frankly, like taxes,” Samantha Mondro, a college counselor at a charter school on Chicago’s West Side told WBEZ in April. “And it’s like, ‘What do I add together? What do I subtract? What am I borrowing?’ ”
In an analysis published last year, the Government Accountability Office found that more than half of universities leave out important details about how much a student will pay when putting together financial aid award letters. Nine out of 10 understate or omit net price, or out-of-pocket costs.
Schools that have signed on to the College Cost Transparency Initiative promise to abide by a set of standards that includes listing the estimated net price in their offers, calculated by subtracting grants and scholarships from the total cost of attendance – and unambiguously labeling loans that need to be paid back with interest using the word “loan.” Letters also will have to include information or links to information specifying whether the financial aid offered can be renewed and, if it can be, outline requirements for renewal.
“Right now there’s no standardization of financial aid letters,” Miller said. “You simply cannot lay out all of your financial aid letters on the kitchen table, and look at them side by side and easily compare them without putting a bunch of numbers into a spreadsheet or a website, and using that to really decipher how much you’re truly going to owe.
“So any kind of standardization I’m all [for] because it makes students’ lives easier, it helps them make smarter decisions, it makes counselors’ lives easier, it makes family’s lives better.”
Other Illinois schools that have signed on include both campuses of Southern Illinois University, Rockford University, Oakton Community College and Waubonsee Community College.
What about Illinois, UChicago, and Northwestern?
Northwestern’s spokesperson did not immediately respond to WBEZ. University of Chicago officials said their award letters follow best practices from the U.S. Department of Education and the National Association of Student Financial Aid Administrators.
“One important factor is that at UChicago, College students who receive financial aid are not expected to take out student loans,” UChicago spokesperson Gerald McSwiggan said in an email.
A representative from the University of Illinois said officials there support the ideas behind the College Cost Transparency Initiative, but said the school did not join because of a requirement that participating institutions exclude Federal Direct Parent PLUS loans from their financial aid packages.
These are loans that parents can take out to help finance their children’s college degrees. In an email, University of Illinois spokesperson Robin Kaler said the school includes them on award letters because families should be made aware they are a federal loan resource parents might be able to use to cover costs.
Miller, whose own parents took out Parent Plus loans to finance her education, disagrees, and appreciates that the College Cost Transparency Initiative requires participating schools to leave them off award letters.
“Parent Plus loans, to my knowledge, have no real limit on the amount that families can take out, so it allows families to take out loans that they may or may not be able to pay back,” she said. “You could take out $40-, $50-, $60-, $70,000, and the interest rate is astronomical as well. So, you’re paying on that for years and years and years and decades and decades and decades.”