The College Cost Transparency Initiative (CCT), an initiative aimed at improving transparency of student financial aid offers, announced on Tuesday that over 360 institutions across the country have voluntarily committed to follow its set of principles and standards for the financial aid offers they communicate to undergraduate students. Together, these institutions serve more than 3 million college students across the United States.
The CCT, first launched last fall, is a task force of 10 higher education associations representing college presidents, financial aid offices, and admissions and school counselors. The goal of the CCT was to create a set of principles and standards that outline what information should be included in institutional aid offers to ensure they meet high standards of transparency and clarity, while still allowing for institutional customization.
“Students and families need upfront, accurate, and clear information when making decisions about college,” said Peter McPherson, chair of the CCT task force and president emeritus of the Association of Public and Land-grant Universities (APLU). “Some standardized terminology and clear requirements on what is to be included in financial aid offers is important. Colleges and universities are committing to give students and families the information they need.”
When institutions commit to following CCT’s principles, they commit to ensuring that college costs are communicated in a way that are understandable for students and their families, that financial aid offers include the most accurate estimate possible of a student’s costs, that all types of aid offered are described and explained using standardized, plain language, and more.
As for standards, CCT calls for every financial aid offer to include an estimate of a student’s total cost of attendance (COA), including a breakdown of the costs to be paid to the institution and the costs paid to others; an estimated net price for the student, derived by subtracting grants and scholarships from the total COA; and for all loans unambiguously labeled as such, using the word “loan.”
Additionally, in all offers, the type and source of all financial aid should be separated into: grants and scholarships that do not need to be repaid; student loans or other financing that must be repaid; and student employment or work. Financial aid offers, whether it be directly in the aid offer, as part of supplemental materials, or an easily-accessible online link, should also include additional information about student employment, federal student loans and how much debt may cost over time, and actionable next steps for students to accept or decline their financial aid.
NASFAA President and CEO Justin Draeger stressed that the CCT is committed to making sure that students and families receive the information they need to make informed decisions about paying for college.
“If this project has shown us anything, it’s that this work is complex, but can be done when institutional leaders and practitioners come together to make college cost transparency a priority,” Draeger said in a statement. “We look forward to continuing to recruit more higher education institutions to the initiative.”
The announcement of CCT’s principles and standards comes as lawmakers, think tanks, and government entities continue to scrutinize the financial aid offers that colleges and universities present to students. In December last year, the Government Accountability Office (GAO) released a report that found many institutions are not providing students clear and standard information in their financial aid offers.
Specifically, GAO analyzed financial aid offers from a nationally representative sample of 176 colleges. GAO assessed those offers against a list of 10 best practices for financial aid offers developed from guidance from the Department of Education (ED) and the work of a commission of 22 federal agencies. That list of 10 best practices include itemizing key direct and indirect costs, providing a total COA that includes key costs, estimating the net price (by subtracting only gift aid from key costs), and separating gift aid, loans, and work-study, among other things.
From there, GAO estimates that 63% of colleges follow five or fewer of the 10 best practices. No college in the 176-college-sample followed all 10 best practices. NASFAA debriefed the content of the GAO report on its “Off the Cuff” podcast.
Over the last several months, as the CCT task force developed the standards and principles released today, each association represented on the task force reached out to its members for feedback, and consulted with other stakeholders in the higher education community, as well as Financial Aid Management systems. NASFAA staff shared some of the initial feedback on an episode of “Off the Cuff.”
Beyond CCT’s standards and principles, the initiative also released a set of financial aid offer examples that meet the initiative’s principles and standards for institutions to use in developing or updating their aid offers, and a glossary of common financial aid terms and definitions.
The institutions that have committed to CCT’s principles and standards will display that commitment on their websites. Commitments from institutions can continually be sent in, and the CCT will review and approve those commitments on a rolling basis and update the list of partner institutions accordingly. Institutions interested in committing to CCT’s principles and standards can submit an application.
Publication Date: 9/26/2023