NJ will require universities to provide more financial information in face of rising costs
A New Jersey bill signed into law this summer will force colleges and universities within the Garden State to include information such as graduation rates, default rates and average monthly loan repayments paid over a 10-year period in award letters sent to admitted students.
Previously, this information was not required to provide by the government, with many schools in the state leaving the important financial information for college students to find out for themselves.
The new legislation aims to make it easier for college students to understand the financial situation they will find themselves in upon graduation, enabling them to choose the college that will benefit them the most financially and academically.
Despite the rising cost of tuition at Rutgers, which The Daily Targum reported this summer to be approximately 2.9% this year and 2.1% as a five-year average, the University believes it maintains a financial advantage over many other schools within the state, said Courtney McAnuff, vice chancellor of Enrollment Management.
Merit and need-based scholarship have increased every year since McAnuff has been at Rutgers, with $600 million added for New Brunswick this year, he said. The University also maintains a 6% default rate, with the national rate being approximately 11% nationwide, according to the Open Education Database.
“Students will be able to compare everything they get within state schools,” McAnuff said. “I really think that is good. So students know what will be borrowed and repaid.”
The time to graduate is the most significant factor, with students graduating in four years having significantly less debt than those who graduate in 5 or 6 years, he said.
Some students who have previously been admitted to Rutgers before the “shopping sheet” law may not know the same amount of information as those who are admitted post-"shopping sheet,” McAnuff said, because the college tuition system is so complicated. Between federal and state forms, information has not always been so clear in the past.
Students may also not be aware of how much interest their loans will cost them. Both subsidized loans, which require the student to demonstrate financial need, and unsubsidized loans, which do not, have 4.53% interest as a fixed rate for the life of their loan, according to the Federal Student Aid website. The distribution of government loans is determined by the student’s university, according to the website.
Many people take financial aid awards across the country as well, not realizing they come with certain requirements, such as GPA, to maintain them for four years, McAnuff said.
“And I think students also have to be an alert consumer. It is really important to understand if your financial aid award letter are for four years or not — or what you have to keep the award,” he said.
The issue of college student debt has started to have an impact on the political atmosphere of the United States, becoming an issue mentioned in political stump speeches across the country.
“A 3% raise to tuition is more than Rutgers students can afford. But so is a 1% raise, and so is maintaining current tuition levels. New Jersey's new laws protect us only from fraudulent practices as we pay back our loans, not from having those loans in the first place,” said Navruz Baum, a School of Engineering senior, an undergraduate associate in the Eagleton Institute of Politics and the director of RU for Warren, a political student organization that supports Sen. Elizabeth Warren (D-Ma.) for president in the 2020 elections.
Many Democrats have come to support some measures to alleviate college student debt, with Sen. Bernie Sanders (I-Vt.) campaigning on a similar debt-elimination proposal to Warren, while also calling for in-state college to be offered for free to students, according to USA Today. President Donald J. Trump signed an executive order in August eliminating student loan debt for veterans, according to a separate article from USA Today.
“So, just in summing, I think that this is a good idea. It makes students be much more alert consumers. It gives them information to make better decisions in terms of where they go to school, and I think it makes you very alert to what kind of debt you are carrying,” McAnuff said.
News of the state law was first reported by NJ Advance Media.