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Just a few days back, Shopping Sheet or the financial aid award letter model was unveiled by the Obama administration through the Department of Education. This was done in a bid to help students understand how much and what type of aid they are opting for. This letter also allows them to compare aids offered by various institutions.

In order to ensure transparency in financial disclosures for students, the Financial Aid Shopping Sheet was developed by the Consumer Financial Protection Bureau and the Department of Education. This will is designed in such a manner that students will be able to understand clearly how much scholarships and financial grants they receive from the institution and also better understand the loan amount recommended by the institution to cover their other costs.

Shopping Sheet certainly seems to be format that will help students compare costs associated with different colleges before making a choice. This format is not mandatory however. According to Arne Duncan, the Education Secretary, most students actually do not understand the implications of their student loans until they receive their first bill.

Students and their families, he said, have to be given an opportunity to make smart choices by understanding what is involved in the pricing. He lauded the Shopping Sheet initiative saying that this is indeed a positive step in that direction.

In our country, there are over 7000 higher education institutions each one of which has their own financial aid award letter. Many of them are confusing and misleading for students while some provide valuable information.

According to Richard Cordray, Director of CFPB, it is the right of every student to know beforehand what they are going to owe. We come across many borrowers who say that when they actually signed up for the loan, they did not know what they were getting into. A clear format and real numbers are given to students by the Financial Aid Shopping Sheet. They can now understand with clarity the confusing and complex financial undertaking.

This sheet is a good model of an aid award letter that places before students’ upfront information on the student loan costs, even before they enrol in an institution. The amount of grant money they will receive and the total estimated annual costs will be clear apart from the monthly commitment towards loan repayments they have to make after they graduate.

After extensive feedback from higher education community leaders, consumer advocacy groups and the public, the Shopping Sheet product was created. Before the final version was released, at least a thousand comments were reviewed by posting a draft version of the sheet in October 2011.

Asking university and colleges to adopt the Shopping Sheet voluntarily, Duncan said that doing this will be in the interest of students. He said that he wants to challenge every university and college in the country to adopt transparency and accountability as this will be a step towards meeting our President’s 2020 goal. Students and families can make smart decisions with the help of easy to understand information.