University Business - December 2012 - (Page 18)

Money M at t e r s Transparency Run Amok Combating third-party sites that shape perceptions of value and affordability By Jennifer Wick W ith today’s increased focus on college costs, the call for disclosure of information about affordability and outcomes has also been on the rise. Besides the traditional rankings, a growing number of websites purport to shed light on affordability, or net cost, or return on investment based on IPEDS data combined with other information sources. Examples include the Department of Education’s College Affordability and Transparency Center; Payscale’s ROI rankings; the CNNMoney Cost Calculator; and the New America Foundation Federal Education Budget Project (FEBP) searchable database. If families are using these sites, chances are they will be getting confusing or inaccurate information—or at a minimum, will get data that is out of context. Yet, we only see a few institutions combating this sort of publicly available information with better information on their own websites. The Push for Disclosure Part of the push for cost and outcomes disclosure has come from the federal government’s increased role in regulating transparency and accountability in recent years. An obvious example is the Net Price Calculator requirement that went into effect last fall. Another is the U.S. Department of Education’s “gainful employment” rules. Although the main component of the “gainful employment” regulations was overturned this summer, the disclosure portion was retained, requiring career college programs and nonprofits that offer certificate programs to disclose graduation rates, placement rates, and students’ median debt. In February 2012, the “Student Right to Know Before You Go Act” (S.2098) was introduced in Congress. A key provision Lists promise families quick, easily digestible information about the best and worst colleges. of the bill would support states in creating postsecondary student-level databases that include measures of student success like average individual annual earnings by academic program, degree received, and institution—giving families the opportunity to gauge the likely outcome for specific majors at specific schools. Around the same time, as part of the “Know Before You Owe” campaign, the first draft of the Federal College Scorecard was released. The Scorecard addition to the College Affordability and Transparency Center would give families a tool that shows average net price, six-year graduation rate, and loan repayment rate for a selected institution compared with institutions that enroll similar types of students, as well as information about student loan debt and earnings potential (placement rates, average salaries, etc.). On its face, this seems logical, but families would likely find a comparison between schools that are direct competitors or schools they are actually considering helpful, rather than a sampling of schools from across the country of similar profile. Also part of this campaign, The DOE and the Consumer Financial Protection Bureau have created a model financial aid disclosure form, the Financial Aid Shopping Sheet, with the intention of helping students understand the type and amount of aid they qualify for and compare aid packages offered by different colleges and universities. However, as my colleague Kathy Kurz writes in her August 27, 2012 blog, the Shopping Sheet may merely add to families’ confusion surrounding financial aid award letters, rather than providing clarity, particularly as the “what you will pay” section includes total cost of attendance minus gift aid, rather than the direct costs minus gift aid which may be what is reflected on the award letter. Apart from federal initiatives, lists are popular. Remember when David 18 | December 2012

Table of Contents for the Digital Edition of University Business - December 2012

University Business - December 2012
Editor’s Note
College Index
Ad Index
Behind the News
Money Matters
Independent Outlook
5 Reasons Flipped Classrooms Work
Test Driving Mobile
Open Source Myth Busters
Models of Efficiency
1st Annual Readers’ Choice Awards
Education Innovators
Endowments: New Questions
End Note

University Business - December 2012