Hearing Recap: “No More Surprises: Reforming College Pricing for Students and Families”

Today, the Subcommittee on Higher Education and Workforce Development held a hearing to examine ways to make college costs more transparent.

Subcommittee Chairman Burgess Owens (R-UT) opened the hearing by highlighting some of the many solutions the Committee has brought forward to make out of pocket tuition costs clearer. "Republicans have proposed legislation that would establish standardized financial aid offers to ensure students and families can accurately compare college costs. We have also proposed improvements to make net price calculators more accurate, accessible, and user-friendly. And we are exploring the concept of maximum price guarantees so that families know from day one the most they will ever have to pay for a degree," he said.

Witnesses shared how college pricing can be confusing and how families are demanding more transparency.

"Families face two prices: the sticker price-the published tuition and fees-and the net price-what they actually pay after aid and discounts. Frustrated families consistently ask for three things: an all-in price as early as possible, guarantees that it won't change, and a straightforward sense of return on their investment," said Mr. Justin Draeger, Senior Vice President of Affordability at Strada Education Foundation.

Chairman Tim Walberg (R-MI) discussed state funding in higher education with Dr. Andrew Gillen, Research Fellow at the Cato Institute. "I do disagree with the premise that state funding has been on a long downward trajectory-this is often called state disinvestment. A couple months ago we put out a report that documented the last four and a half decades of state funding for higher education and when you look at the trend line it's actually gone up. So, states have been increasing funding over time by about $56 per-student, per-year," Dr. Gillen said.

Rep. Mark Harris (R-NC) asked about "unfunded discounts" and how this system is a scheme. "[The high achieving student is] unwittingly getting their scholarship funded most likely by a classmate-maybe his or her roommate. The loser in this is the roommate that may be a B student, and she doesn't know that she's paying… $10,000 or $15,000 a year for her roommate's scholarship. She may be borrowing that money-racking up $40,000 or $50,000 in debt," explained Mr. Lee S. Wishing III, Vice President for Student Recruitment and Chief Marketing Officer at Grove City College.

Rep. Randy Fine (R-FL) highlighted how colleges are using questionable methods to get different students to pay different tuition rates for the same degree. "It's horrifying to me to hear that what hotels use to decide what they are going to price your vacation at or your airplane ticket at is being used to decide whether kids can go to college or not," Rep. Fine explained. "Imagine how competitive some of our college institutions are right now-imagine if they get into the world where they are basically auctioning off slots to those who can pay the highest price."

Bottom line: Confusion around college costs leads to students blindly overborrowing, dropping out, or deciding not to enroll in the first place. Committee Republicans are working to increase transparency so that students and families can make the decision that's best for them when it comes to higher education.