Consumer Disclosure Proposals Presented by the National Association of Student Financial Aid Administrators

Current Consumer Disclosure Climate Major focus in Washington on consumer disclosure for students & families Numerous proposals regarding award letters and consumer disclosures Proposals contain overlaps in goals, mandates, and public outreach

Recent Proposals 3 College Scorecard Shopping Sheet College Cost Comparison Worksheet Standardized Award Letter Bills Federal Model Award Offer Forum Executive Order 13607

College Scorecard 4 Purpose Purpose: compare colleges using key measures of affordability and value Proposed by: White House in January 2012 Use Intended Use: early in college search Populated by: ED (resides on ED’s College Affordability and Transparency Center Status Congressional Action: none required. Unofficial word that it may be implemented for award year Public Comment: Solicited Public Comment in early NASFAA also submitted comments

Shopping Sheet 5 Purpose Purpose: render aid offers from schools easier to understand and comparable with other school offers Proposed by: CFPB & White House in October 2011, final version released July 2012 Use Intended Use: after application, upon aid notification, prior to commitment Populated by: Institution & ED Status Congressional Action: Yes in order to mandate; it is voluntary now Public comment: WH/CFPB Solicited comment through early Spring. NASFAA also submitted comments

Shopping Sheet Details 6 NASFAA has been in constant communication with ED, White House & CFPB on the issue NASFAA appreciates that the Shopping Sheet is voluntary, but remains concerned about the inflexible nature: – One size fits all for every sector and type of student –Does not allow for information to tailor information to the unique needs of their students –Comparative information has potential to be inaccurate and misleading

Shopping Sheet- Next Steps 7 As of end of September, 316 institutions had officially “signed on”—though many had done so de facto through their commitment to the VA Principles of Excellence NASFAA remains in discussions with key stakeholders related to how the sheet can be improved NASFAA Consumer Testing of Award Letters

Comparison Worksheet 8 Purpose Purpose: enable direct comparison tool for costs, net prices, and/or award offers from different schools Proposed by: CFBP in April 2012 Use Intended Use: bifurcated- addresses both early search stage and aid award stage Populated by: ED Data and Student Status Congressional Action: None required. Public Comment: Took public comment for one month; new version pending. NASFAA submitted comments.

Senator Franken’s Award Letter Standardization Bill 9 Purpose Purpose: mandate use of standard format and design as well as content; standardize terminology Proposed by: Senator Al Franken (D-MN) in May 2012 Use Intended Use: when aid is offered Populated by: Institution Status Congressional Action: Congress must pass; bill has been introduced but no movement Public Comment: NASFAA has been working closely with Senator Franken’s staff to provide feedback

Senator Blumenthal’s Consumer Disclosure Bill 10 Purpose Purpose: to crack down on aggressive recruiting and misrepresentation. Would require new standardized disclosure sheet and Student Default Risk Index Proposed by: Senator Blumenthal in September 2012 Use Intended Use: prior to the decision to enroll Populated by: Institution and ED Status Congressional Action: Congress must pass; bill has been introduced but no movement Public Comment: NASFAA has been working closely with Senator Blumenthal’s staff to provide feedback

Federal Model Award Offer Forum 11 Purpose Purpose: recommend model award letter notification form to improve current aid process Proposed by: ED, as mandated by the HEOA Use Intended Use: when aid is offered Populated by: Institution and/or ED Status Congressional Action: required; although not “official” we surmise the Shopping Sheet will be considered as their proposal Public Comment: ED held public hearing; working with CFPB via Shopping Sheet

Principles of Excellence (Shopping Sheet Provision) 12 Purpose Purpose: Broadly, to improve college services to vets, service members, and their families Proposed by: White House in April 2012 Use Intended Use: Provide Shopping Sheet to all prospective active duty military and veterans Populated by: Institution Status (1 Jul 2012) Congressional Action: none required Public Comment: VA asking for intent to comply from schools.

Recommendations from NASFAA Award Letter Task Force 13 Purpose Purpose: create an easy to understand, standardized award notice with formatting flexibility Proposed by: NASFAA Award Letter & Consumer Notification Task Force Use Intended Use: when aid is offered Populated by: Institution Status Congressional Action: No, schools would voluntarily participate Public Comment: In developing recommendations, NASFAA Task Force members solicited community feedback

NASFA Award Letter Task Force Recommendations 14 1.Include 10 core elements: –Cost of Attendance –Scholarship & Grant Awards –Net Costs After Gift Aid –Self-Help Options –Assumptions (enrollment status; housing, etc.) –Link to Total Debt Aggregator –Link to Consumer Information Disclosures –Link to Glossary of Terms and Definitions –Contact Information for the Financial Aid Office –Deadlines and Next Steps

15 2. Components of COA should be broken down into: –Direct Costs –Indirect Costs 3. Students should be informed of the potential debt they may incur at a college before paying the enrollment deposit 4. Award notifications should provide enrolled students with their cumulative loan history NASFA Award Letter Task Force Recommendations

16 NASFA Award Letter Task Force Recommendations 5. The U.S. Department of Education should mandate that there be a central loan database (aggregator) where students can see all—federal and private—loans. 6. Each award letter should link to school- created web resource that contains links to additional information

Where to go from here? 17 With so many proposals addressing the same issues and large amounts of redundancy: –Create a dialogue to combine/analyze the numerous options –Conduct actual consumer testing so that measures of usability and comprehension are a part of discussions – Focus attention on the need to eliminate and/or streamline existing efforts before introducing new