A significant chunk of colleges are understating tuition costs or fail to provide the “net price” when offering students financial aid, a key tool used in recruiting, a new report by the Government Accountability Office (GAO) found.
The report, published on Monday, claims that 91% of colleges “do not include or understate the net price” when offering financial aid. Of the total number, 41% were reported to not include a net price while 50% of colleges “understate” the price by excluding the price of books, fees, living expenses as well as loans that will be repaid.
“According to those we interviewed for the study, colleges can benefit by making themselves appear more affordable. However, without information on the actual costs that students will pay out of pocket (for everything from tuition to housing to meals and books), it’s hard for students to pick a college they can afford,” Melissa Emrey-Arras, an Education, Workforce and Income Security director at the GAO, told the Daily Caller News Foundation. “As a result, students may end up taking out larger student loans or potentially dropping out of college when those costs hit them unexpectedly.”
Republican Rep. Virginia Foxx of North Carolina, who is also a ranking member of the House Committee on Education and Labor, told The Wall Street Journal that she was “disgusted at the endemic level of deception currently happening at colleges and universities” in response to the report’s findings.
Foxx and Republican Rep. Lisa McClain of Michigan introduced Monday legislation which requires colleges be more transparent about the cost of attendance, the WSJ reported.
Financial Aid Offers: Action Needed to Improve Information on College Costs and Student Aid https://t.co/dAyfJvvhUg
— U.S. GAO (@USGAO) December 5, 2022
The GAO called on Congress to take additional action to “ensure that all students receive the information they need in their financial aid offers to make informed education and financial choices.” (RELATED: Major Universities Used Unfair Methodology To Calculate Student Financial Aid New Lawsuit Alleges)
During the 2021 fiscal year, the Department of Education issued “$112 billion in financial aid to students through various grant and loan programs,” according to the GAO.
“Students use these offers to make key decisions, including which college to attend and how to finance their education,” the report said.
The GAO collected data from “176 colleges and assessed them against 10 best practices from the Department of Education and a commission comprised of 22 federal agencies.” The “best practices” list included standards on how colleges should communicate with students about their financial aid, one of which includes providing the estimated net price of attendance.
“According to GAO’s review of financial aid offers from a nationally representative sample of colleges, nearly two-thirds of colleges follow half or fewer of the 10 best practices,” the report said. “No college in GAO’s sample followed all 10.”
The Department of Education, Foxx and McClain did not immediately respond to the DCNF’s request for comment.
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