Homework from the Consumer Financial Protection Bureau: Know Before You Owe

Fictional U grad rates

The outstanding student loan debt will reach a trillion dollars this year. College costs have escalated far beyond the rate of inflation. 2011-12 tuition and fees have topped $50,000 at 123 colleges.

The very least students and parents should expect from a college is clarity about the bottom line.

The reality, with many schools, looks pretty fuzzy.

EduLaunchPad provides three examples of financial aid award letters in What is That Financial Aid Offer Letter Telling You? The post explains how to decipher which amounts in the letter are grants and scholarships, which are subsidized student loans and work-study, and which are private loans (the most expensive money).

Fictional U Cost of Attendance. Click to enlarge.

As of this week, federal law requires each college to present a net cost calculator on its website. Of course, as we’ve read here, here, and here, be careful to rely too closely on the results. One hopes they will get better.

The Consumer Financial Protection Bureau [CFPB] is trying to shine some light on the award letters, by offering a standard design for consumers to comment on. See the design here: Know Before You Owe. These three screenshots show portions of the design.

Here’s your homework:¬† The CFPB would like to hear from you on the design. They’ve provided these questions, along with a space for comments.

  • What do you like about it? What don’t you like? Think about these questions:
  • Which information is absolutely critical?
  • What other information would be helpful?
  • Can you tell from this sample format which aid requires repayment?
  • What will that repayment cost? For one year of school? For four years?
  • If there was a web-based interactive version, what functionalities would you like to see?

The site also provides a list of information to be ranked in order of importance. Think clarity is important when you’re considering a quarter of a million dollar commitment? Give the CFPB some feedback.

Fictional U Cost of Loans. Click to enlarge.

Enhanced by Zemanta
Advertisements

3 Comments

Filed under Paying for College

3 responses to “Homework from the Consumer Financial Protection Bureau: Know Before You Owe

  1. Pingback: Wednesday Weekly Reader: 13 Key Items to Know About Financial Aid. | Dr. StrangeCollege or, How I Learned to Stop Worrying and Love the Journey

  2. Pingback: Good news for the educated-college-consumer: Know before you go! | Dr. StrangeCollege or, How I Learned to Stop Worrying and Love the Journey

  3. Pingback: 2600 or so 4-year colleges in the US; 10 agreed to greater clarity in financial aid letters. | Dr. StrangeCollege or, How I Learned to Stop Worrying and Love the Journey

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s