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She announced her support during Tuesday afternoon conference call with reporters.
The U.S. Senate is considering a bill that would provide transparency for students and families by standardizing financial-aid documents.
Gillibrand is citing two factors in supporting the legislation. The Democrat says student loan debt now exceed credit-card debt at more than $1 trillion, and she believes students and families nationwide are "getting lost in the fine print" of financial aid documents that "can hide the true cost" of a college education.
Gillibrand's office cites numbers that indicate more than 1 million New York students are enrolled in higher education, as of the 2009-2010 school year, and those students will amass an estimated average of more than $26,000 per student in debt on student loans. The figures are from College Insight.
To equip students and their families with the information necessary to understand the full costs of a college education, Gillibrand is pushing the Understanding the True Cost of College Act, legislation that would set a uniform financial aid form to establish one set of terminology, allowing consumers to easily compare the costs of higher education across all institutions, and gain a clear understanding of the long-term financial obligation before committing to a financial aid package for a college or university. The form would include direct and indirect costs for the entire anticipated course of study.
Specifically, the Understanding the True Cost of College Act would:
* Require institutions of higher education to use a uniform financial aid award letter.
* Call on the Department of Education to work with colleges, consumer groups, students, and school guidance counselors to develop standard definitions of various financial aid terms for use in the uniform financial aid award letters.
- * Establish basic minimums of information that must be included on page one of the uniform financial aid award letters, including: cost of attendance; grant aid; the net amount a student is responsible for paying after subtracting grant aid; work study assistance; eligible amounts of federal student loans; expected federal loan monthly repayment amounts; and disclosures related to private loans
- * Require the Department of Education to establish a process to consumer test the uniform financial aid award letter and use the results from the consumer testing in the final development of the uniform financial aid award letter.
- * Require all institutions of higher education which receive federal financial assistance to use the proposed form to make any offers of financial aid to students.
The U.S. Department of Education and the Consumer Financial Protection Bureau on Tuesday released its official model financial-aid form. Gillibrand considers that a step toward greater transparency, but the Democrat is urging bipartisan Senate leaders to move swiftly on a vote on the Understanding the True Cost of College Act, which would require all higher education institutions to implement the new form. Currently, using the form is voluntary, and only 10 university systems have chosen to do so.