WASHINGTON (Reuters) - The Obama administration and 10 private colleges and state university systems are taking steps this week aimed at improving transparency about the cost of college, including loans and options for repaying them.
An administration official said Vice President Joe Biden on Tuesday will lead a meeting with university and college presidents whose institutions serve 1.4 million students, or about 5 percent of college enrollees.
They will focus on the need to provide “clear and useful information” about the costs of college to students and their families, the official said.
The action comes as Congress struggles to end a politically charged, election-year standoff over maintaining low interest rates on federal education loans, a centerpiece of financing for students throughout the U.S. higher education system.
Interest rates on such loans are set to double to 6.8 percent on July 1 without new action on rates or an extension of current law. The change would add significant new costs over time for many students already pinched by steadily rising education expenses.
Community colleges, often for two years, can cost several thousand dollars annually, while some four-year state schools can exceed $20,000 per year. Private colleges can cost more than $50,000.
Student loans are the largest component of household debt after mortgages. They rose 3.4 percent to $904 billion in the first quarter of this year compared with the final three months of 2011, the New York Federal Reserve Bank said in a report last week.
At the meeting, each higher education official is expected to commit to several measures for incoming students as part of the financial aid package beginning with the 2013-14 school year.
This includes information about the cost of college for one year and options for meeting the bill that clearly differentiate between grants and scholarships, which do not have to be repaid, and loans, which do.
The schools will lay out an example of payments due for federal student loans after graduation and information about default rates.
Participants include Arizona State University, Miami Dade College, North Carolina Agricultural & Technical State University, the State University System of New York, Syracuse University in New York, the University of Massachusetts System, the University of North Carolina at Chapel Hill, the University System of Maryland, the University of Texas System, and Vassar College in New York.
Ahead of his visit on Thursday to the University of Nevada, Las Vegas, President Barack Obama will direct his administration to improve student information about options that can help them pay off their debt - in particular an income-based scenario that caps monthly payments based on the ability to pay.
Reporting by John Crawley; Editing by Jackie Frank