Collect better data on students’ debt and outcomes
To support more useful, comprehensive, accurate and comparable postsecondary data, we join a broad, nonpartisan coalition in recommending the repeal of the 2008 ban on a student level data network, and holistic reform of postsecondary data infrastructure through the creation of a federal student level data network with strong protocols for protecting both student privacy and data security. Without such progress, key outcome metrics will remain out of reach of both students and policymakers, and public data will continue to fall short of reflecting all students. More incremental improvements are both necessary and possible in the absence of such a network. For example, the Department’s College Scorecard is a valuable tool that highlights data on individual colleges’ costs and student outcomes. However, currently available data on student debt remain incomplete and uneven. For example, the total debt at graduation—including federal and private loans—is still not available for each college, nor is the debt by type of credential offered by a given school. And while the Department is working toward obtaining cumulative debt data through the National Student Loan Data System (NSLDS), such data will remain incomplete because private loans are not included in that database. Ultimately, the best way to provide accurate and comprehensive data on private loan borrowing while minimizing the reporting burden for colleges is for the Department to collect the data directly from lenders, using the NSLDS platform through which lenders currently report on every federal loan, or an equivalent system for tracking all federal and private loans. Until such a system is in place, we continue to recommend that the Department immediately collect these data from colleges via the Integrated Postsecondary Education Data System (IPEDS).
Improve and promote tools to help students make informed college decisions
It is far too difficult for students to tell what a given school might cost them before they apply, or to compare the real value of financial aid offers before choosing where to attend. With clear, comparable information, students and families will be able to better identify colleges that provide the best value and fit their specific needs, and educational and career goals. Toward that end, we support the improvement and promotion of the following existing consumer tools.
- Net Price Calculator. Federal law requires colleges to post online “net price calculators” to help students and families look beyond a college’s sticker price and learn which colleges they might be able to afford, before they have to decide where to apply. Unfortunately, our research has found that many calculators are hard to find, use, and compare. Subsequent guidance from the Department has helped, but more must be done to ensure that the calculators live up to their potential. We strongly support bipartisan legislation introduced in the House(H.R. 3694) in 2013 and in the Senate (S. 889) in 2017 to improve these tools based on our research, including by authorizing the creation of a central net price calculator portal so students could enter their information once and instantly get comparable net price information from multiple colleges.
- Shopping Sheet. Jointly developed by the U.S. Department of Education and CFPB, the “Shopping Sheet” is a voluntary model format for college financial aid offers to make it easy for students who have been accepted to a college to understand and compare the real cost of attending that college. However, the latest publicly available information from July 2017 shows that while over 3,000 colleges were using the Shopping Sheet at the time, most schools either did not use it at all or used it only for some students. The Department of Education should resume publishing a regularly updated list of colleges using the Shopping Sheet and for which students, and to ensure that all students receive clear and comparable information from every college to which they are admitted, we support bipartisan legislation (S. 888) introduced in 2017 that would require all colleges receiving federal aid to use a similar standardized format. Both the shopping sheet and this legislation and reflect the growing consensus we helped build on key elements that must be included in any aid offer, such as the full cost of attendance, net price, and clear distinctions between grants and loans.
- Loan Counseling. By law, all federal student loan borrowers are required to receive entrance and exit counseling. The Department has improved its current online counseling tools, which are used by thousands of colleges, by making the format more user friendly and more fully integrating income-driven repayment plan options. However, there remains significant potential for enhancing federal student loan counseling to ensure that students are provided clear, timely, actionable information on borrowing options and obligations Loan counseling should more consistently and clearly provide students with information related to their previous and future borrowing decisions, and the repayment options available to them, without deterring or restricting access to loans that students need to attend and complete college. Borrowers should be counseled before rather than after they sign the promissory note, and exit counseling should better facilitate borrowers’ understanding of the tradeoffs among repayment options based on the borrower’s expected income and total student debt, and between keeping monthly payments low versus reducing the total cost of their debt. We encourage the Department to continue its effort to consumer test and improve its existing online loan counseling tools, including by consistently providing definitions of key terms before using them, and more clearly explaining how to select or change a repayment plan. Improving the timing and effectiveness of federal student loan counseling has consistent bipartisan, bicameral support, including S 1628 introduced in 2017 that provides annual counseling, and H.R. 1635 passed by the House of Representatives in 2018 which also makes loan counseling annual, and provides critical information encouraging students to use federal student loans before considering risky private loans to pay for college.