| WASHINGTON, July 24
WASHINGTON, July 24 The Obama administration
unveiled a form on Tuesday to help students compare college
financial aid offers and better understand how much debt they
will incur by the time they graduate.
If embraced by colleges and universities, the new form would
provide key information like the school's graduation rate and
tell students with loans what their monthly payment could look
like upon graduation.
The form will include the average loan default rate and
clearly differentiate between grants and scholarships, according
to the Consumer Financial Protection Board and the U.S.
Department of Education.
The form would be voluntary with officials urging schools to
adopt the form for the 2013-2014 school year.
"We must unravel the mystery of higher education so that
students can invest wisely and make the best, most informed
decision possible about where to enroll," Secretary of Education
Arne Duncan told reporters on Monday.
The Obama administration has been eager to be seen helping
students in an election year, months after the total U.S.
student loan debt reached an estimated $1 trillion in April.
That same month, President Barack Obama signed an executive
order requiring colleges that accept government funding for
veterans' education to provide military students with the new
financial aid form.
The president also recently signed into law a bill to keep
federal student loan interest rates from doubling to 6.8 percent
on July 1, a rare spot of election-year bipartisanship.
Roughly 10 universities have said they support the idea
behind the form, Duncan said on Monday.
He said he plans to publish an open letter to colleges on
Tuesday asking them to adopt the "shopping sheet" as part of
their financial aid awards starting in the 2013-2014 school
But legislation would be required to force schools to
comply, the agencies said.
"We urge all universities and higher learning institutions
to embrace transparency by adopting the financial aid shopping
sheet and fully expect that they will do so," the Consumer
Financial Protection Board (CFPB) Director Richard Cordray said.
A bipartisan Senate bill, proposed in May and backed by
Democrat Chuck Schumer and Republican Chuck Grassley, would
require universities to issue a universal financial aid letter.
The consumer watchdog agency was created by the 2010 Dodd
Frank financial reform law to police consumer products such as
mortgages, credit cards, and student loans.
It opened its doors about a year ago.
The CFPB and Education Department also released a report
last week on student loan debt. It found borrowers who took out
private student loans in the run-up to the financial crisis are
facing higher levels of default, reflecting the risky lending
practices at the time.
The Department of Education and the Consumer Financial
Protection Bureau said private lenders have since cleaned up
some of the worst activities, but lawmakers should still work to
improve the private loan market and enhance protections for