Northern Illinois University, Chicago State University and Northeastern Illinois University have signed onto a new commitment to standardize financial aid offers so students can more easily compare costs and understand what they will owe after graduation.
Other Illinois schools that have signed on include both campuses of Southern Illinois University, Oakton Community College, Waubonsee Community College and Rockford University.
But three big-name Illinois colleges — the University of Illinois Urbana-Champaign, Northwestern University and the University of Chicago — aren’t on the list of more than 300 colleges that have agreed to what’s being called the College Cost Transparency Initiative.
“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 west 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, aiming to make financial aid offer letters clearer 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 a lot of money, like mortgages, the letters aren’t regulated by the federal government. They end up looking 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 earlier this year. “And it’s like, ‘What do I add together? What do I subtract? What am I borrowing?’ ”
In an analysis last year, the federal 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 of 10 understate or omit net price — out-of-pocket costs.
Schools who have signed on to the College Cost Transparency Initiative promise to abide by standards that include 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 details or links to information specifying whether the financial aid offered can be renewed and, if so, outline the 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 families’ lives better.”
Northwestern’s spokesperson did not respond to a request for comment. University of Chicago officials said their award letters follow best practices established by 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,” spokesperson Gerald McSwiggan said.
A representative of the University of Illinois said officials support the ideas behind the College Cost Transparency Initiative but that the school didn’t join because of a requirement that participating institutions exclude Federal Direct Parent PLUS loans from their financial aid packages.
These are loans parents can take out to help finance their children’s college degrees.
University of Illinois spokesperson Robin Kaler said the school includes them in award letters so parents are aware they are a federal loan resource they might be able to tap to cover costs.
Miller, whose parents took out Parent Plus loans to finance her education, disagrees about that and said she appreciates that the College Cost Transparency Initiative requires participating schools to leave those loans off of 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.”
