Unraveling the Mystery of College Costs

Waiting for college acceptance letters can be a nerve-racking experience filled with excitement and anticipation, but once approved, students and their families begin another anticipatory wait for financial award letters. The letters, which intend on laying out the cost of college, too often do a poor job of providing the bottom line on how much aid, grants and scholarships, and student loans will be needed to pay for college.

Shopping Sheet Example

An example of the easy-to-read information on the Shopping Sheet

To help solve this problem, the Obama Administration released a model financial aid award letter today called the Shopping Sheet. The Shopping Sheet will standardize award letters, making it easier to comparison shop and provide students with key information including:

  • How much one year of school will cost;
  • Financial aid options to pay this cost, with a clear differentiation between grants and scholarships, which do not have to be repaid, and loans, which do;
  • The net costs after grants and scholarships are taken into account;
  • Vital information about student results, including comparative information about default rates, graduation rates, and median debt levels for the school;
  • And potential monthly payments for the federal student loans the typical student would owes after graduation.

To coincide with the release, Secretary of Education Arne Duncan sent an open letter to college and university presidents, asking them to adopt the Shopping Sheet as part of their financial aid awards starting in the 2013-14 school year. In the letter, Duncan explained that “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.”

Read Secretary Duncan’s letter and see the shopping sheet here.


  1. I am the assistant editor of Ball State Univeristy Daily News in Indiana. I am investigating textbook costs. What rolls to they play in today’s overall college cost. Also- are the prices justifiable or are the high costs ultimatley change in the pockets of the producers- and who is making the money in this situation? If answered, I’d like to include this in my article. Thank you!

    • Anna – Thanks for the question. The Department of Education is working to make college more affordable for every American in order to meet President Obama’s goal that by 2020 we once again have the most highly educated, best prepared workforce in the world. The cost of college textbooks is a burden on students at public and private colleges and universities who depend on limited federal financial aid for the funds they need to stay focused on their studies while in school. The Department of Education’s Technology Plan, Learning Powered by Technology, seeks to promote the use of innovative and less costly methods and technologies, including freely available Open Educational Resources, to improve the quality of teaching and learning and reduce the financial burdens on students. To promote a better understanding of the potential advantages of this approach the Department recently co-sponsored the “Why Open Education Matters” video contest, which concluded with the announcement of the top three winners, which you can view here. As Secretary Duncan has said, “Not only can open educational resources substantially enrich learning, they can also reduce costs for schools, students and families.”

      Hal Plotkin – Senior Policy Advisor in the Office of the Under Secretary of Education

  2. Will the Shopping Sheet be mandated for all colleges that get Title IV aid and military aid for academic years after 2012-13? Is the federal government providing a free Shopping Sheet? The NPC mandate led to a free NPC template that has proven not to be highly accurate.

    • @Mary – Thanks for the question. While the Shopping Sheet is not required for Title IV schools, the Secretary is asking institutions to make this commitment for the 2013-14 school year to ensure that prospective students clearly understand the cost and financing of their college education. To help institutions honor this commitment, ED will be providing a tool that institutions can use to provide this information to their students. Colleges and universities that have signed-on to the President’s E.O. 13607, “Establishing Principals of Excellence for Educational Institutions Service Servicemembers, Veterans, Spouses, and other Family Members,” have agreed to use the shopping sheet for their student veterans or active duty military students and their families.

      Cameron Brenchley
      Office of Communications and Outreach

  3. Will the shopping sheet be required for every revision in a student’s financial aid package or just the initial award? Also, what if the student does NOT file a FAFSA or institutional app for an estimate of need based aid eligibilty (and thus only received merit award(s) from the institution?

    • Great questions Larry, we also have the same situation here where students receive merit awards w/out the FAFSA or the Institutional application. Would we be required to send the Shopping sheet to these students as well?

  4. As the mother of college age children, I think this is great! Yes, this information is available in other places, but it is really helpful to have it in one place and very helpful not to mix grants and scholarships with loans. I know many students who lump them all together in their minds and they are usually lumped together on the financial aid letter. It should be required.

  5. I work at a public high school as a college and financial aid advisor. I have a feeling this is aimed primarily at the for-profit schools. Many public and not for profit institutions do a fair job with their financial aid letters. I do like the idea of putting in default information but, if there was a strong job market, we wouldn’t even be having this conversation. I am passing along this information to the more than 35 other BRACE Advisors in Broward County, FL (Ft. Lauderdale). http://www.broward.k12.fl.us/corecurriculum/guidance/brace/default.htm

    Thanks for the information.

  6. This is ridiculous.
    All the information a consumer/parent/student could ever want is to be found on the IES navigator site. Why we have to duplicate it here in a single format for the many types of different institutions is bad policy. Plus the technical considerations to populate this form from powerfaids, then batch email from a CRM system may not be possible for some small colleges…like ours (we don’t even have electronic billing yet)
    Financial aid regulations are out of control.

    • Thanks for the comment Scott. You’re right that the IES navigator is a great resource, but unfortunately, not everyone is aware that it exists. The Shopping Sheet would be sent directly to students from the college or university and simplify the information in an easy-to-read format.

      The Shopping Sheet isn’t regulated and colleges aren’t being forced to adopt it. Secretary Duncan is just encouraging them to do so.

      Cameron Brenchley
      Office of Communications and Outreach

      • I see that “transportation” can mean commuting expense, but the form still says “Housing and meals (on campus resident” and seems to exclude these expenses for commuters.

        Also, I am not sure that the category “Other scholarsghips you can use” could really include outside scholarships and non-campus based state grants. The college would need to have confirmation of these items before being so definite about them, and that could happen late in the summer. Most colleges include “estimated” grant resources, especially for projected state grants, in the aid letter but they cannot tell students that they “can” use them, at least in an initial aid letter.

        Also, the loan question that I raised is very real. There are more need-based loans than just federal loans. There are college loans and state loans.

        If the college sent this form, along with the traditional award letter, it could actually result in a very confusing situation for students. They would have to reconcile two different forms, unless of course the college created a third piece of paper to show what equates to what. I believe that this would really be counterpproductive.

        This idea seems tot me to need more work before it is rolled out or (I guess it has been rolled out) or its use is encouraged or required.

    • I have met a student who got great aid package for freshman year. And only after a counselor looked over the fine print, did they realize it was only a one year offer designed to get them signed up. While your college may not do this, it is better if the family can see clear info to make an informed decision. Since not mandatory, why complain? You can simply not do that.

  7. I think the idea of simplifying things and giving a base comparison is nice, but I think it might be confusing still for some families/students, especially those coming from first generation families (no parents attended college) who may not understand “default rates” or may be loan-adverse. Graduation rates are very much affected by how prepared the students are coming in to college, thus the lower graduation rates at many community colleges.

  8. Looks to be a very good start in clearing up a very complicated subject, but can you clarify two items on the sheet?

    First, what is “Transportation” showing? If it shows the average cost of a round-trip from home to school and back, then the figure may be misleading if most of the students are in-state (let alone commuters, like Kate noted above). If it shows more than one round-trip (Sept. arrival on campus; Dec. return home; Jan. return to campus; May return home, for instance), or if it implies a particular mode of transportation, then the underlying assumptions should be clearer.

    Second, I am new to the maze of financial aid details, so my apologies if this is incorrect. Doesn’t the FAFSA calculate the expected family contribution so that the difference between the expected contribution and the total cost of education can be used for calculating how much money needs to be obtained through grants, loans, scholarships, work-study, etc.? The Shopping Sheet, by its placement of the family contribution at the bottom without any other explanation, seems to imply that the family contribution is calculated *after* the amount to be provided in grants and scholarships, instead of the other way around.

    • Howard – great questions.

      1. Transportation is the number generated by the college itself. Depending on the calculation used by the college, it can take into account commuting students who live off campus, as well as occasional trips made by students who live away from home.

      2. At most institutions, the expected family contribution is based on the FAFSA, but others that use an institutional methodology would provide their own estimate.

      Cameron Brenchley
      Office of Communications and Outreach

  9. Will students and their families understand why a comparison of loan default rates between schools is useful and important? If the purpose of including this statistic is to say something about post-completion job prospects and loan repayment success, then I suggest inclusion of more explicit context surrounding loan default rate comparisons.

  10. 1. Many students commute. The form does not seem to allow for the commuting option.
    2. Some colleges offer institutional, need-based loans as part of the package. Some states have need-based state loan programs They should appear under loan options, I think.
    3. Median borrowing includes only federal loans. Some students have loans from their colleges, their states, and (probably) many more borrow private student loans. To get a full picture of borrowing, these loans need to be included in the median.
    4. For dependent students, a major point is the median debt of the parents. Colleges would not know about home equity loans, but they would know about the loans that are processed through the college, PLUS and any state loans for parents.

    It is a start, and I am sure the result of a great deal of hard work.

  11. Sure is a good start – but wouldn’t it be nice to know the four (4) year graduation rates instead of 6??!?!?!

    • Perhaps both? Many, if not most, students do not graduate in 4 years. That is okay, but I think 6 year gives a better picture of the actual degree attainment rate.

  12. As a former financial aid director for many years, I think it’s an outstanding step in the right direction! Why not make it a regulatory provision to ensure that it happens nationwide?

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