A set of bills brought forward in Congress by Sen. Tina Smith, D-Minn., aims to demystify loans and the cost of college for students and families.
Smith introduced the Know Before You Owe Federal Student Loan Act, Understanding the True Cost of College Act and Net Price Calculator Improvement Act in late March to provide more information to students making important financial decisions and push schools to be more transparent about costs. Smith said this legislation is in response to feedback from Minnesota students.
“I’ve talked to dozens and dozens of college students all across Minnesota, from the University of Minnesota to community and technical colleges all over the place,” Smith said. “And I hear over and over worries about the cost of college and how we can make college more affordable, and also just the challenges of understanding what students and families are getting into when they take out loans.”
The Know Before You Owe Act would require financial counseling for students any time they take out a loan, as opposed to current requirements that only apply to first-time borrowers. Smith said this act would help inform students as they take out additional debt throughout their college careers.
Colleges also need to be consistent in language used in financial aid letters so students can adequately compare costs between schools, Smith said. Under the Understanding the True Cost Act, schools would send out a universal financial aid letter.
Finally, the Net Price Calculator Improvement Act would require colleges to provide calculators “up front and center” on their websites so students can calculate the total cost of attendance, Smith said.
“The goal is to bring greater clarity and transparency to the financial decisions that students and families are making as they go through higher education,” Smith said. “And we want people to know what they owe, we want them to be able to compare across institutions so that they can make the best decisions for themselves.”
Julie Selander, director of One Stop Student Services at the University of Minnesota, said incoming students’ financial aid knowledge is “all over the board.”
“I think sometimes there might be a misunderstanding like, ‘I better just take it now because I don't know if I'm gonna need it later in the semester and later in the year, and we keep trying to reassure students that you can always ask for it later if you come to that situation,” Selander said.
University sophomore Lauren Foley said while the Free Application for Federal Student Aid was straightforward, her month-to-month loan payments were still “hazy.”
“As a student, I wish I would’ve been forced into taking it slower so I would actually intake more of the information,” Foley said.
Jacques Frank-Loron, academic affairs committee leader for Minnesota Student Association, said MSA supports Smith’s efforts.
“I am excited that there is work being done to make financial aid processes more accessible for students and illuminating the process of student loans,” Frank-Loron wrote in an email to the Minnesota Daily.