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Joe Biden Proposes New College Cost Plan


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The Biden administration introduced a plan on Friday to enhance the transparency of college costs and the provision of financial aid, aiming to curtail unexpected fees and streamline the financial aid process for students and their families.

The initiative mandates colleges and universities to disclose detailed cost information to prospective students before enrollment and financial aid acceptance.

Amid growing concerns over the affordability of higher education in the United States, the policy seeks to empower students with clearer financial insights, potentially reshaping their decision-making regarding college investments.

Institutions failing to adhere to the new regulations risk suspension or termination from federal student aid programs, signifying a shift toward accountability and consumer protection in the education sector.

Joe Bdien
President Joe Biden speaks on the campus of Carnegie Mellon University in Pittsburgh, Pennsylvania. The Biden administration is cracking down on college expenses, proposing the end of what it terms "junk fees," among other hidden... Jeff Swensen/Getty Images

What's New?

The centerpiece of the initiative is the requirement for higher-education institutions to offer detail about the costs associated with attending college. This includes tuition, fees, and the expenses students and families are likely to face out-of-pocket before they enroll and accept financial aid offers.

The administration said the intention behind the move is to eliminate the element of surprise from college bills, addressing a common complaint among students and families about hidden or unexpected costs that can impact their financial planning.

Further tightening the reins on transparency, the administration's plan also introduces mandates for institutions to enhance their financial aid communications and counseling services. The goal is to ensure that students have a clear understanding of their financial aid packages, including grants, loans and other forms of aid, enabling them to make informed decisions about their education financing.

Highlighting the administration's long-term crackdown on what it terms "junk fees," the new regulations target a range of hidden costs that have long plagued students. These include fees for loan origination, college-sponsored credit cards and banking accounts, textbook purchases, and even unspent meal plan funds. Those fees add to the financial burden on students and often come as unwelcome surprises, the White House said last week.

The Department of Education said that it is setting its sights on ensuring that those unused funds from federal financial aid recipients' meal plans are returned to students, rather than being pocketed by institutions.

Another important aspect of the proposal is the call to eliminate student loan origination fees. Often overlooked, the fees are charged when students take out federal loans, adding an additional financial layer to the process of borrowing for education. The administration argues that the fees, which can range from 1 percent to 4 percent of the loan amount, act as an unnecessary tax on students, cumulatively costing them more than $1 billion annually.

In addition to financial transparency, the administration is pushing for changes in how colleges manage and communicate financial aid, which includes prohibiting certain banking fees on accounts where students receive their financial aid and ending the automatic billing of students for textbooks—a practice that often prevents students from seeking more affordable alternatives.

The steps, part of the administration's broader agenda to make higher education more affordable and accessible, are expected to create a more transparent, fair and student-friendly educational landscape.

By enforcing the regulations, the administration aims to hold educational institutions accountable for providing clear, upfront cost information and fair financial practices, ultimately helping to reduce the overall financial strain on students and their families.

Newsweek contacted the White House through its media inquiry form and emailed the Department of Education for comment on Monday morning.

Uncommon Knowledge

Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.

Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.

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