Two new proposed U.S. Senate bills aim to make it easier for students to navigate the complex financial aid process and educate students about borrowing federal money to finance a college education.
Sen. Mark Warner, D-Va., has been writing two bills backed by bipartisan support – the first of which would establish a federal database to help students understand financial aid data, and the second would require universities to provide financial counseling to students who receive federal financial aid.
Warner said the bills would give students more information before making major financial decisions about their education and students said the proposals would make applying for financial aid easier and facilitate understanding of a complicated process.
Warner will reintroduce the database bill, the Student Right to Know Before You Go Act, “in the next couple of weeks,” the senator’s deputy press secretary Jonathan Uriarte said. Similar bills died in Congress over the last several years after failing to reach a floor vote.
The database would collect information like graduation and transfer rates and average salaries by major – data universities already collect and release on their own websites – and compile it to be published on a federal website, Warner said.
“What the Student Right to Know Before You Go Act does is give students and parents that critical information: debt loads, transfer rates, enrollment status and annual earnings by major, and we really think it is a very helpful tool for people as they make the decisions about higher education,” Warner said on a press call with student journalists earlier this month.
Freshman Gabriela Rodriguez Garcia, who receives the Pell Grant, a need-based federal grant to relieve some of the cost of higher education, said resources like the Consumer Financial Protection Bureau – a government agency that works to ensure that private financial entities treat citizens fairly – act as helpful tools in understanding how colleges award aid to students. But creating a centralized source of data from all schools would be even more useful, she said.
“The amount of information and the way it’s presented can be overwhelming,” she said. “It’s not just about being appealing but also presenting in a way students can understand.”
The University’s financial pool has grown every year since 2013 amid rising tuition and a University-wide focus on accessibility. Last year’s roughly 8 percent increase was the largest since 2011.
The second bill, called the Empowering Students Through Enhanced Financial Counseling Act, was reintroduced by Warner, one Democratic and two Republican senators Nov. 6 after it failed to get a vote last year. Warner said the bill would provide annual counseling to federal loan borrowers, inform Pell Grant recipients about the “ups and downs” of the program and require borrowers to sign off each year on their accumulated loans.
While the counseling would be administered by individual schools’ financial aid offices, the education secretary would also be required to distribute an “online counseling tool” for institutions to use as they provide the counseling services.
“You take on all this debt, and you don’t really know how that may translate into the amount of monthly payments and the burden it might put you under,” Warner said.
The bills’ sponsors are hopeful that because the bills are “common-sense” and “bipartisan,” there will be enough support to push the legislation through the Senate, he added.
The University currently provides students with a “financial education resources list” online, which links to federal, state and local financial aid literacy resources, in addition to community-based and non-profit associations. Students can also schedule financial advising appointments with counselors in the Financial Aid Office on the ground floor of the Marvin Center.
Freshman Gabrielle Sorina, a Pell Grant recipient, said financial counseling would provide guidance about tuition payments that she was not able to receive from those close to her because her parents did not attend college.
“I’d also have somebody there telling me exactly what I need to know,” Sorina said.
Financial aid experts said although the bills are helpful in theory, they are unsure whether they would actually improve financial aid literacy in practice.
David Canaski, the president of Financial Aid Experts, a higher education compliance and enrollment consulting firm for colleges, said the addition of more regulations and disclosure policies would not significantly change the status quo and that students must take the initiative to use the services offered already.
“The main impediment to the financial aid office in their goals to provide better information, counseling and service to students and families is the federal government and their excessive, complicated, one-size-fits-all laws and regulations that rarely help anyone,” he said in an email.
Stephen Payne, the assistant director of federal relations at the National Association of Student Financial Aid Administrators, an organization that serves college financial assistance professionals, said students often begin paying back loans after graduation.
But he said that requiring annual counseling could be a “burden” to some students who are too busy or overwhelmed to attend.
“There needs to be a wholesale look at the current consumer information and financial aid counseling environment today – before we think about what we can do to layer on those requirements – to ensure that we have a simplified streamline system for students and borrowers,” he said.
Cayla Harris contributed reporting.
