Legislating an Honest Look at College Cost

The Ohio State House of Representatives passed a higher education bill last week to ensure that colleges are transparent in their communications about the cost of their degree programs and the returns their graduates can expect on that investment.

Ohio House Bill 27, which passed by a vote of 88 to 1 Thursday, would require public colleges and universities in the state to send admitted students who qualify for financial aid a one-page “financial cost and aid disclosure form” in their aid packets. The form would offer a full breakdown of the net cost of a degree, including the expected duration of the student’s financial aid package, a clear definition of grants versus loans, and the minimum monthly loan payments required of the student after graduating. It would also mandate that institutions share with admitted students postgraduation data on outcomes.

Ohio representative Adam Mathews, the bill’s principal author and sponsor, said he brought the legislation forward for two reasons: to encourage students to apply to Ohio colleges by showing their affordability, and to identify programs that might cost students more than they’re likely to earn back in a future career.

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“We want to make sure that students know what they’re paying and how their financial aid continues to support them through their educational journey,” Mathews, a Republican, told Inside Higher Ed. “It’s important for institutions to be up front about this.”

According to a 2022 report from the Government Accountability Office, 91 percent of colleges understate the total cost of their degrees, and 65 percent omit critical details about aid packages. Another 31 percent reportedly list loans as grants, leading students to wrongly conclude they don’t require repayment.

“A student could get 12 different offers and the language used will be different in every one,” said Martin Van Der Werf, director of editorial and education policy at the Georgetown University Center on Education and the Workforce (CEW). “And for many students, even if the terminology was standardized, it might not be entirely clear what it means.”

The bill would also require that data on graduates’ earnings outcomes be part of every financial aid packet, including expected loan payments and the average income for alumni one year after graduation and five years out—for the institution as a whole and broken out by major if the applicant has declared one.

Stephen Mockabee, the government relations committee chair for the Ohio chapter of the American Association of University Professors, who testified as an interested party when the bill was under debate last month, told Inside Higher Ed that while he supported the legislation in principle, he had concerns about the metrics of affordability and economic returns it uses.

“It’s a laudable goal, but the devil is in the details,” Mockabee said. “The data also show that one of the most important factors in retention is motivation, and that liberal arts majors sometimes earn more 10 or 15 years after graduating than, say, an accounting major … We don’t want to discourage students from pursuing a liberal arts degree if they’re passionate about philosophy or English. My worry is, could the bill be a bit of a self-fulfilling prophecy?”

The ‘Leading Edge’ of a Legislative Approach

The battle for increased financial transparency in higher ed is neither new nor restricted to Ohio. New Jersey lawmakers passed legislation in 2021 requiring all public and private institutions to include an itemized breakdown of costs and opportunities for additional aid in their financial aid packets to prospective students. Virginia passed a law in 2022 requiring similar information to be distributed to high school students, though the state assigned that responsibility to K-12 school districts—not higher ed institutions.

But Mathews said the Ohio bill is a more ideal and direct form of transparency than other state proposals.

“With data about both net cost and all the factors after college—loan payments, expected income—right in front of them while they’re making their decisions, students can really get a good picture of what life might be like postgrad,” he said. “To my knowledge, we’re the leading edge on this.”

Ohio House of Representatives

The movement almost succeeded at the national level last year, when the bipartisan College Transparency Act passed the House of Representatives; it has since been stalled in the Senate. If it becomes law, it would repeal a 2008 ban on the collection of individualized student data across federal agencies, written into the last reauthorization of the Higher Education Act.

Michelle Dimino, deputy education director at the federal policy think tank Third Way, said state efforts are valuable, but a federal law is the end goal.

“State policies can be both a breeding ground for great ideas and a lab for productive experimentation,” she said. “But there are thousands of institutions operating under different state regulations. Federal legislation is really needed to make sure we’re comparing apples to apples.”

Legislation isn’t the only tool for improving college cost and outcomes transparency. Colorado’s Higher Education Commission, for example, proposed calculating the economic value of state institutions’ degree programs using a unique formula and posting those values on a public website for side-by-side comparison.

Mockabee said one drawback of pursuing legislation rather than a statewide data project is that it places the cost of collecting that data on the colleges and universities themselves, creating “unfunded mandates” that end up burdening already-struggling institutions. Research in states with similar but longer-standing data-transparency efforts also points to the fact that earnings data may not have much influence over the decisions of students and their families.

Mathews said his bill would ideally complement a state-level data-collection project, and he hopes its passage inspires such an initiative.

Van Der Werf said the boom in net cost and outcomes data collection since the 2015 launch of the College Scorecard has made data transparency a more important tool than ever, enabling both legislative efforts like Ohio’s and state-level initiatives like Colorado’s to get off the ground.

“Colleges, for a long time, have gotten away with not really talking about outcomes because they didn’t have to, because the data wasn’t widely available,” he said. “There is an increased accountability effort now because we finally have the data to actually be able to do it.”

A Hanging Partisan ‘Specter’

State lawmakers’ efforts to improve financial transparency come at a fraught moment, when Republican lawmakers are increasingly skeptical of higher ed’s value proposition and bedrock principles such as academic freedom, tenure and diversity are under attack in red states.

In Ohio, House Bill 27 advances to the Senate under the shadow of the controversial SB 83, which would defund diversity offices and initiatives at the state’s public higher ed institutions and which many critics say poses a grave threat to academic freedom. Last month that bill passed the Senate by a margin of 21 to 10, split largely along party lines.

Mockabee said that while the House bill is clearly a bipartisan effort—the lone vote against it was cast by a Republican—it is difficult to ignore the “greater context” of culture war partisanship in discussions of higher education among the state’s policy makers.

“There is this concerted effort to call into question the value of higher education by some on the right wing, and obviously that is a specter that hangs over everything,” he said. “I’m definitely worried about state disinvestment and this bill providing an excuse for that … I’m hopeful it does the opposite, but I do think that’s a concern.”

Matt Sigelman, president of the Burning Glass Institute, a nonprofit focused on workforce research, said he recognized lawmakers could have hostile motivations for introducing transparency bills in an age of increasing state disinvestment and right-wing hostility to higher education funding.

But the data, he said, are on higher ed’s side. On average, graduates with bachelor’s degrees earn 84 percent more over their lifetimes than people with only high school diplomas, according to a study from the Georgetown CEW. And if institutions or programs do underperform for students, making consumers aware of that is a worthy public service when the data are presented in good faith.

“Yes, this is being driven by hostile legislatures. But I think everything that we’ve seen in the data for the most part shows that college degrees are worth it,” Sigelman said. “If lawmakers want to bring accountability measures to prove that, I say game on.”