Iowa senators cosponsor proposed financial aid standardization bill

BY KRISTEN EAST | JUNE 05, 2012 6:30 AM

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A recently proposed bill in the U.S. Senate would create a universal financial-aid award letter, but some experts say too much regulation could harm students.

Sen. Al Franken, D-Minn., introduced the Understanding the True Cost of College Act of 2012 on May 24. The universal financial-aid award letter created through this bill, if passed, would provide students a simplified method of comparing financial-aid packages among schools. Schools do not use standard defnitions for the various forms of aid, a Senate press release said.

One University of Iowa official said standardizing aid award letters could ultimately lead to more confusion.

"When we get into a one form fits all, it creates some issues that may cause problems," said Mark Warner, the director of UI Student Financial Aid. "To have a very detailed, prescribed award notification, we want to make sure that it doesn't become so detailed that it becomes even more confusing for the student and the parent than helpful."

However, he said, the UI is already on par with what education and political leaders expect from national colleges and universities.

"Having looked at the proposed legislation and recommendations, I'd say that [the UI is] probably 95 percent there," he said.

More than 11,200 undergraduate students at the UI received loans during the 2010-11 academic year. Ninety-three percent of those were federal loans, and 7 percent represented a variety of private loans.

Warner said UI Financial Aid Office officials annually review and evaluate student and parent feedback from award notification letters and make changes accordingly.

Officials from the National Association of Student Financial Aid Administrators recently released a set of recommendations in response to the bill, and they are asking Congressional leaders to consider their opinions before moving forward with the bill.

"… [Association] members have concerns that over-prescriptive standardization of award letters would interfere with an institution's ability to meet the specific needs of its unique student body and would restrict innovation and delivery," the report said. "However, [the association] supports standardizing elements and terms on award letters."

Warner, a member of the association, said those recommendations were recently forwarded to Congress.

"I'm comfortable with this proposed legislation," he said. "… [but] I'm most comfortable with the recommendations being made by the national organization with some minor modifications. I generally support the notion of calling for more standardization at a high level that the legislation would provide."

Sens. Tom Harkin, D-Iowa, and Chuck Grassley, R-Iowa, cosponsored the bill. Six other U.S. senators are cosponsors.

"This common-sense legislation helps empower students and families with necessary information to make an informed choice about college," Harkin said in a Senate press release.

Grassley, who is the only Republican to cosponsor the bill, said the legislation is a proactive way of addressing student debt.

"This initiative will empower students and parents with the information they need to make the best financial decision for their families and to avoid taking on more debt than they will be able to repay," he said in the press release. "This is one way to address the problem of student debt on the front end rather than after the fact."

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