Finance

GAO releases report blasting colleges for misleading financial aid letters

Student loans
AP/Seth Wenig
New graduates walk into the High Point Solutions Stadium before the start of the Rutgers University graduation ceremony in Piscataway Township, N.J., on May 13, 2018. President Joe Biden’s student loan cancellation offers a life-changing financial break for millions of Americans. But for future students heading to college under the same conditions that created today’s debt, critics say it offers little help. Chief among the causes of today’s rising student debt is the cost of college. (AP Photo/Seth Wenig, File)

The Government Accountability Office (GAO) blasted colleges in a new report for misleading students in financial aid letters about the total cost of attendance.

Ninety-one percent of colleges underestimated or did not include the net price of attending their institution in financial aid offers to students, according to the GAO report released on Monday.

About half of universities omitted key costs — like housing and meals, books and supplies, or transportation — in their aid letters and/or factored loans into the net price alongside grants and scholarships, making college appear less expensive. Another 41 percent did not provide an estimated net price at all, the report found.

Only 9 percent correctly calculated the net price for students in their aid letters. However, no college reviewed by the GAO followed all the Department of Education’s best practices for financial aid offers. The agency urged Congress to mandate these best practices, which are currently encouraged but not required.

Rep. Virginia Foxx (R-N.C.) — who requested the study as the leading Republican on the House Education and Labor Committee — introduced legislation alongside Rep. Lisa McClain (R-Mich.) in response to the report.

“This is egregious and unacceptable,” Foxx and McClain said in a joint statement. “Colleges and universities must do better. Prospective students deserve to have all the information necessary to make informed decisions about their education.”

“Since these institutions refuse to hold themselves accountable, Congress must pass legislation to protect students and families,” they added.

The report comes as President Biden’s controversial effort to relieve student loan debt remains on hold as it heads to the Supreme Court. Biden’s debt relief program sought to forgive up to $10,000 in loans for borrowers making less $125,000 a year and up to $20,000 for those who received Pell Grants.

Tags Biden College College tuition Education gao Lisa McClain Student loan forgiveness student loans Virginia Foxx Virginia Foxx
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