Student loans

College cost confusion: Report finds 91% of colleges don't report true cost

Some higher education experts are calling on Congress to require transparency in financial aid offers

NBC Universal, Inc.

As the Supreme Court is expected to soon weigh in on the fate of President Joe Biden’s COVID-era college loan forgiveness program, millions of prospective college students are preparing to take on tens of thousands of dollars in bills and debt of their own.

But the News4 I-Team found most of those students likely have no idea exactly what their education will cost them, because – according to a study by government researchers – the majority of colleges aren’t transparent about the true cost of attending.

According to a November 2022 report from the U.S. Government Accountability Office, an estimated 91% of American colleges fail to tell students the full cost of their college education.

“Students and their families deserve to know that price,” said Melissa Emrey-Arras, who heads up the GAO team that examined more than 500 aid offers from nearly 200 colleges across the country. “It took quite a while for our own staff to decipher them, and these are people that are trained looking at these. It was still very difficult to figure out what the cost was.”

Source: U.S. Government Accountability Office

The GAO, which did not name any of the colleges it examined in its report, found 41% of the offers it examined did not estimate the net price of attending and about half understate the net price by excluding costs such as living expenses and books.

It also found roughly 75% refer to aid as “awards,” which the GAO slammed as confusing as aid packages with loans will need to be repaid.

Local

Washington, D.C., Maryland and Virginia local news, events and information

3 dog deaths investigated at Potomac Yard PetSmart

Katie Ledecky's still excited about swimming after all these years

Emrey-Arras said federal higher aid officials created and recommend ten best practices to make these financial aid offers more transparent, but “colleges are choosing not to follow them.” 

Asked why, Emrey-Arras said, “We heard from people during our work that they have an incentive to not tell people what the full cost is, because if they do so, it will make their school look more expensive.”

Though the U.S. Department of Education created a financial aid offer roadmap for colleges, federal law doesn’t standardize how colleges must present their financial offers to students.

The GAO, which serves as the spending watchdog for lawmakers, has recommended Congress fix that, though legislation to increase transparency in those offers has so far stalled on the Hill.

Justin Draeger, the president of the National Association of Student Financial Aid Administrators, told the I-Team that while “we can't make any excuses for schools that are purposefully trying to hide or disguise their costs,” the majority are doing the best they can.

Draeger said, in most cases, confusion on these offers isn’t intentional.

“Paying for college is a really complicated issue in this country …  There are just so many entities involved in helping students and families pay for college,” he said, explaining financial aid officers are trying to organize information from government entities, scholarship providers and families.

“The financial aid office is trying to put together a single package with all of these funding … and it's really complicated. And I sympathize with students and families who are trying to figure all of this out,” he said.

Draeger welcomed some congressional action on the issue, noting lawmakers could mandate minimal standards on financial offers to make the bottom line easier to understand.

“But I also don't think that's going to be a panacea,” he said. “This is going to take all stakeholders coming together and trying to figure this out because the complexities aren't going to end today or tomorrow.”

The transparency matters more than ever. The Education Data Initiative reports the average four-year college now costs about $35,500, including the cost of books, supplies and living expenses. The EDI reports that average cost has more than doubled in the 21st century.

The same group reports the average federal student loan debt is about $37,000, and students in the District, Maryland and Virginia have some of the highest average debt loads in the nation.

Source: Education Data Initiative

“Have we done enough? No,” U.S. Sen. Tim Kaine (D-Va.) said in an interview with the I-Team about college cost transparency.

Kaine, who sits on the Senate Health, Education, Labor and Pensions Committee, supports efforts to expand loan forgiveness for public sector employees, increase the Pell grant for low-income students and make it available for job-training programs. He's also behind bipartisan legislation that would require colleges to provide more in-depth information about student outcomes, such as graduation rates or post-college earnings. So far, however, none has passed.

"We've done a lot of different things, but sometimes it's one step forward, two steps back,” he said.

Kaine said he’s hopeful Congress will eventually tackle an overhaul of the 1965 Higher Education Act – a behemoth bill which he said could address many of these issues – though it hasn’t been reauthorized since 2008.

“The Higher Ed Act gives us the opportunity to look at it comprehensively, and it is my hope on the committee that we will tackle that. It's long overdue,” he said.

Until then, families like Christine Collins’ are doing their best to prepare for the college bills headed their way.

Collins’ daughter, Taylor, who recently graduated from Magruder High School in Montgomery County, is planning to study neuroscience at the University of Colorado at Boulder this fall.

Collins said that, while her family expects annual costs will exceed $30,000 for out-of-state students like Taylor, “We don't know really the actual bottom line as of yet.”

The Maryland mother isn’t convinced Congress should determine how schools prepare financial offers, but agreed more should be done to make it easier for parents and students to understand the bottom line.

“I think in all areas of higher education … it should be a more transparent process,” she said.

This story was reported by Ted Oberg, produced by Katie Leslie, and shot and edited by Jeff Piper. NBC Boston contributed to this report.

Contact Us