AccessLex Institute Submits Recommendations for Ways to Improve Transparency in Higher Education

The Honorable Bill Cassidy
Chairman
Senate Health, Education, Labor, and Pensions Committee
428 Dirksen Senate Office Building
Washington, D.C. 20510

Re: Request for Information Regarding Improving Transparency in Higher Education and Lowering Costs for Students

Dear Chairman Cassidy:

Thank you for the opportunity to write on behalf of AccessLex Institute® in response to your recent Request for Information from stakeholders on ways to improve transparency in higher education to lower costs and ensure students and families choose the best college option for them.

AccessLex Institute, in partnership with its nearly 200 nonprofit and state-affiliated ABAapproved member law schools, has been committed to improving access to legal education and to maximizing the affordability and value of a law degree since 1983. The AccessLex Center for Legal Education Excellence® advocates for policies that make legal education work better for students and society alike and conducts research on the most critical issues facing legal education today.

Value Transparency 

What are the strengths and weaknesses of the College Scorecard?

The main strength of the Scorecard is that it provides a wealth of information at the college level to help undergraduate students compare their options across institution types and characteristics (e.g., two-year vs. four-year) as well as across fields of study (e.g., economics and history). The outcomes data available by fields of study at the graduate and professional levels is also helpful, where available. Given the size of some of the programs, there is necessary privacy suppression. Nonetheless, this data is valuable and can be useful for those interested in viewing the availability of graduate and professional programs at Title IV institutions and the available outcomes data associated with each.

On the other hand, there are a few limitations to the College Scorecard. One major limitation is that it does not include time-to-degree information for graduate programs, which is important when comparing debt across programs (e.g., a one-year master's program vs. a two-year master's program). 

Additionally, time of measurement differs between median field of study earnings and median earnings at the undergraduate/college level. For instance, median earnings for undergraduates at the college level are measured 10 years after entering the school, but median earnings at the undergraduate field of study level are measured five years after graduation. Similarly, students included in earnings-measures differ between field of study and college level. Field of study earnings are only for those who completed the program, while college-level earnings are for all who entered. Having consistent measurements across these earnings elements would help students and families better understand and interpret the data.

Another issue is the availability of data and apparent inconsistencies in data suppression. For instance, debt and earnings data for law, doctoral or first-professional degree graduates of New York University are suppressed despite having over 400 students in the pooled cohort, while the same Classification of Instructional Programs (CIP) and degree level for Faulker University has few suppressed data cells despite having fewer than 100 students in the pooled cohort.

Lastly, sharing median earnings closer to graduation may be of greater interest to entering students, in addition to earnings five years after. Adding the median earnings one year and three years after completion would help students understand earnings growth over time.

Financial Aid Offers

Institutions of higher education predominantly rely on offer letters to convey eligibility for financial aid programs to students and their families. However, the terminology and format vary between colleges, making it difficult for students and their families to make well-informed financial decisions and to understand the debt they are taking on. Congress should require institutions to standardize the content and format of financial aid offer letters, which would better clarify the aid available to students and allow them to more effectively compare offers from different institutions. We propose the following changes to improve financial aid offer letters.

First, financial aid offer letters should include the total cost of attendance (COA), which is one of the most significant pieces of information that students and their families consider when making decisions about which institutions to attend. It is important that this number reflects the entire cost of attending an institution because it will affect the value of any other aid being offered. The total COA should include both the direct costs (billed directly by the institution) and indirect costs (paid for by the student throughout the term). In addition, both direct and indirect costs should be fully itemized so that students are aware of the expenses for which they are responsible.

Gift aid, loans, and work-study should be separated and clearly defined in the financial aid offer letter. In addition, the type of aid (grants, loans, or work-study) and source of aid (federal, state, institutional, or private) made available should be clearly labeled. Doing so will help students and families understand what needs to be repaid and what does not. 

It is important that students are provided with information regarding what they will be expected to pay in order to attend a particular institution. That is why the estimated net price – the total COA minus any gift aid such as grants or scholarships – should be clearly stated in the financial aid offer letter to eliminate any ambiguity about a student’s financial obligation.

Students are often unaware that accepting a financial aid package requires multiple actions beyond receiving the initial offer. It is essential that they are provided with actionable next steps, such as comprehensive information on how to accept, decline, or modify the aid package. By incorporating these details into the offer letter, the next steps become unambiguous, and students will have clear instructions on how to move forward. 

It is imperative to make sure that students are clear about every aspect of the offered financial aid package. To that end, it is important that offer letters refer to the aid package as an offer and not an award. Doing so should reduce confusion and clarify to students and families that loans contained in an offer letter need to be paid back and are not mistaken as grants or scholarships.

There are often many terms referenced when discussing financial aid that most students are unaware of or may not understand. Requiring language in financial aid offer letters to be standardized and defined will help students understand the aid that is being offered and allow them to better compare offer letters from different institutions.

Finally, financial aid offer letters should include a Quick Reference Box on the first page, which includes the total COA for that institution (both direct and indirect costs), the total grants and scholarships being offered to that student, and the estimated net price (i.e., scholarships and grants subtracted from the COA). The Quick Reference Box will provide students with a quick and easy-to-read snapshot of the total cost of attending that institution and help them to compare costs more efficiently across multiple institutions. 

Informed Borrower

What information on student loan repayment is most important for students to have when they are taking out the loans? 

To make informed decisions about taking out student loans, students need access to clear, disaggregated data that shows how different academic programs and institutions impact loan repayment outcomes. Currently, only institution-level data is available because Congress banned the creation of a student-level data system in 2008. However, institution level data fails to adequately capture and evaluate outcomes for students in any targeted way. On the other hand, a student-level data system would allow prospective borrowers to see repayment rates, earnings, and debt burden by program, degree level, and student demographics. This kind of transparency is essential for helping students understand the long-term financial implications of their borrowing choices.

What is the best way to communicate information about loans to students so that they actively process it and do not just sign disclosures without reading them?

The most effective way to ensure students actively engage with loan information is to provide customized, comprehensive loan counseling that goes beyond the minimal federal requirements. Research shows that many students misunderstand key aspects of their loans, with some underestimating their debt by more than $10,000.¹ To address this, more comprehensive counseling should be provided that is timely, relevant, and tailored to students’ academic and financial circumstances, especially for graduate and professional students who tend to borrow more. Schools should be empowered to require additional counseling when needed, and financial aid administrators should have greater flexibility to partner with outside entities to guide students through the borrowing process. This approach will help students better understand the long-term implications of their loans and encourage informed decision-making rather than passive acceptance of disclosures.

Thank you for your time and attention to this matter. If you have any questions, please do not hesitate to contact me at [email protected] or Nancy Conneely, Vice President of Policy, at [email protected]. 

Sincerely,

Christopher P. Chapman
President and Chief Executive Officer
AccessLex Institute^®

¹ Steele, P. and Anderson, C. (2016). Loan Counseling for Graduate and Professional Students. Retrieved from AccessLex Institute: Download PDF