transparency

As a result, it seems prudent to consider why it is acceptable to place 100% of the burden of a student loan on a student when the school received the financial benefit and would potentially act differently if they shared the risk of student success. College Parents of America welcomes this discussion. It is timely for the United States to consider how we increase the capacity of our citizens to contribute and compete in a global economy.

The steps of college are upon us and are evidence that parents have faith that the world can be improved through higher education. It is true that a higher education can help our students to comprehend and be better prepared to address the challenges of the world. As college parents - there are a few reminders that are worth highlighting for this year.

We are frequent advocates of better consumer information for students and their families. As a result we were pleased to read today's article by fellow parent and New York Times columnist Ron Lieber. His article Concealing the Calculus of Higher Education is a powerful reminder of the difficulty families have in understanding the actual cost of college.

   image by flickr user lendingmemo (cc license) Over the past four months, debit cards on college campuses have faced heightened scrutiny. Much of this scrutiny has come from the Consumer Financial Protection Bureau (CFPB) and the Government Accountability Office (GAO). Today, the Department of Education's Office of Inspector General has published a report that is sure to garner attention, both on Capitol Hill and on college campuses nationwide. 

  pic by flickr user nesster (cc license) The Consumer Financial Protection Bureau (CFPB) continues its push for sunshine/transparency for financial organizations’ relationships with institutions of higher education. In a blog post last week, the CFPB discussed how many of these arrangements work:1. Direct payments for using school logos: We found several agreements where a financial institution offers a licensing fee in order to use a school’s logo to market its financial products. (In 2008, Congress restricted this practice for student loans, but not for other financial products.) For example, we found an agreement which provides $25 million to a university for use of the school’s logo, among other benefits.2. Bonuses for recruiting students: Other agreements provide bonus payments based on whether students sign up for a financial institution’s student checking account marketed on campus. For example, one agreement paid a university an upfront payment of $400,000 and an additional bonus of upwards of $200,000 each year if enough new students signed up for the accounts.3. Discounted prices in exchange for marketing access: Some colleges receive discounted – or even completely free – services in exchange for allowing a provider to market financial products to students. For example, we found many agreements where a financial institution charges a university to transfer loan and scholarship funds to students.However, some school officials have told us that these charges may be heavily discounted, since these agreements provide the financial institution with unique access to market to students receiving financial aid. This gives the financial institution a foot in the door to generate significant revenue in fees from students, making it worthwhile to provide discounted services to schools.  The CFPB went on to praise the voluntary disclosure of such agreements as a commitment to transparency and informed consumer choice. College Parents of America praises these efforts as commonsense, consumer-friendly steps that these institutions can take. Thankfully, college financial transparency has increased significantly since the days of on-campus Frisbees, T-shirts and candy in exchange for college credit card applications.   Transparency in college isn’t yet perfect, however.  

Expanding transparency around colleges is always a concern. Families and students, who are often viewed as "consumers" of higher education, are rightfully due the disclosure of a bevy of relevant information about institutions they compensate in exchange for education. In addition to the many existing laws governing required disclosures by colleges, there's been, in recent years, a push for transparency in possible costs (the net price calculator), a push for transparency in campus safety (Clery Act and campus safety statistics), and a push for transparency in defaults of loans (cohort default rates). Such transparency is required of private and public schools, under the assumption that certain types of transparency are universally needed for students and families. On Tuesday, there was a call for greater collegiate transparency in a new realm: campus debit cards.