Lawmakers, experts back standardized aid offers, better net-price tools and price guarantees to reduce sticker shock

Members of the House Education and Labor Subcommittee and witnesses outlined a set of bipartisan proposals intended to give families clearer, comparable information about college costs.

Justin Draeger of Strada Education Foundation said families want three things: “1 clear all in number as early as possible,” a guarantee that price “won't change while they're enrolled,” and “1 clear sense of return on their investment.” Draeger urged standardized plain-language pricing and fixes to incentives that lead institutions to raise sticker prices.

Andrew Gillen, research fellow at the Cato Institute, recommended legislation that would standardize financial-aid terminology, supplement current net price calculators with a universal, machine-readable tool, and require price guarantees for the typical program length (for example, two years for an associate degree and four for a bachelor's). Gillen said the “strongest argument for price transparency is the moral one: eliminating surprise bills.”

Amy Laitinen, senior director of higher education at New America, cited research that “a third of financial aid offers … didn't include cost information” and warned that colleges sometimes use institutional aid to recruit wealthier students rather than help low-income students. She urged passage of the bipartisan College Transparency Act and keeping the Department of Education’s financial value transparency rule in place.

Committee members asked about state examples. Gillen pointed to states such as Ohio and North Carolina as early adopters of price guarantees. Members also raised concerns about inflation and how a multi-year price guarantee would accommodate sudden cost shocks.

Witnesses and members agreed that while transparency alone will not solve affordability, standardized, comparable disclosures and ‘‘all-in’’ price guarantees could reduce the surprise costs that drive some students to drop out.

Ending: Lawmakers signaled interest in legislative steps to standardize aid offers, improve net-price tools and pilot price guarantees, while acknowledging the need to protect students from cost shifting and to allow adjustments for extraordinary inflation.