[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 528 Introduced in Senate (IS)]
<DOC>
118th CONGRESS
1st Session
S. 528
To require a standard financial aid offer form, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
February 27, 2023
Mr. Grassley (for himself, Ms. Smith, and Ms. Ernst) introduced the
following bill; which was read twice and referred to the Committee on
Health, Education, Labor, and Pensions
_______________________________________________________________________
A BILL
To require a standard financial aid offer form, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Understanding the True Cost of
College Act of 2023''.
SEC. 2. INSTITUTION FINANCIAL AID OFFER FORM.
Section 484 of the Higher Education Opportunity Act (20 U.S.C. 1092
note) is amended to read as follows:
``SEC. 484. INSTITUTION FINANCIAL AID OFFER FORM.
``(a) Standard Format and Terminology.--The Secretary of Education,
in consultation with the heads of relevant Federal agencies, shall
develop standard terminology and a standard format for financial aid
offer forms based on recommendations from representatives of students,
veterans, servicemembers, students' families, institutions of higher
education (including community colleges, for-profit institutions, four
year public institutions, and four year private nonprofit
institutions), financial aid experts, secondary school and
postsecondary counselors, nonprofit organizations, and consumer groups.
``(b) Key Required Contents for Offer Form.--The standard format
developed under subsection (a) shall include, in a consumer-friendly
manner that is simple and understandable, a form titled `Financial Aid
Offer', which shall include the following items, with costs listed
first followed by grants and scholarships, clearly separated from each
other with separate headings:
``(1) Cost information.--
``(A) Information on the student's estimated cost
of attendance, including the following:
``(i) Total direct costs, including the
component totals each for--
``(I) tuition and fees, as
determined under section 472 of the
Higher Education Act of 1965 (20 U.S.C.
1087ll); and
``(II) college-sponsored housing
and food costs (as determined based on
the costs for room and board under such
section).
``(ii) Total estimated other expenses,
including--
``(I) the component totals each for
housing and food costs for students who
reside off-campus; and
``(II) for all students, books,
supplies, transportation, and
miscellaneous personal expenses (which
may include costs of health insurance
and dependent care), as determined
under section 472 of the Higher
Education Act of 1965 (20 U.S.C.
1087ll).
``(B) An indication of the academic period covered
by the financial aid offer, and an explanation that the
financial aid offered may change for academic periods
not covered by the aid offer or by program.
``(C) An indication of whether cost and aid
estimates are based on full-time or part-time
enrollment.
``(D) An indication, as applicable, about whether
the tuition and fees are estimated based on the
previous year, or are set, for the academic period
indicated in accordance with subparagraph (B).
``(2) Grants and scholarships.--The aggregate amount of
grants and scholarships by source that the student does not
have to repay, such as grant aid offered under title IV of the
Higher Education Act of 1965 (20 U.S.C. 1070 et seq.) and grant
aid offered through other Federal programs, grant aid offered
by the institution, grant aid offered by the State, and, if
known, grant aid from an outside source to the student for such
academic period, including--
``(A) a disclosure that the grants and scholarships
do not have to be repaid; and
``(B) if institutional aid is included--
``(i) the conditions under which the
student can expect to receive similar amounts
of such financial aid for each academic period
the student is enrolled at the institution; and
``(ii) whether the institutional aid offer
may change if grants or scholarships from
outside sources are applied after the student
receives the offer form, and, if applicable,
how that aid will change.
``(3) Net price.--
``(A) The net price that the student, or the
student's family on behalf of the student, is estimated
to have to pay for the student to attend the
institution for such academic period, equal to--
``(i) the cost of attendance as described
in paragraph (1)(A) for the student for the
period indicated in paragraph (1)(B); minus
``(ii) the amount of grant aid described in
paragraph (2) that is included in the financial
aid offer form.
``(B) A disclosure that the net price is an
estimate of the total expenses for the year and not
equivalent to the amount the student will owe directly
to the institution.
``(4) Loans.--
``(A) Information on any loan under part D or part
E of title IV of the Higher Education Act of 1965 (20
U.S.C. 1087a et seq.; 20 U.S.C. 1087aa et seq.) (except
a Federal Direct PLUS Loan under part D of that Act)
that the institution recommends for the student for the
academic period covered by the offer, which shall be
made--
``(i) with clear use of the word `loan' to
describe the recommended loan amounts; and
``(ii) with clear labeling of subsidized
and unsubsidized loans.
``(B) A disclosure that such loans have to be
repaid and a disclosure that the student can borrow a
lesser or, if applicable, greater amount than the
recommended loan amount.
``(C) A disclosure that the interest rates and fees
on such loans are set annually and affect total cost
over time, and a link to a Department of Education
website that includes current information on interest
rates and fees.
``(D) A link to the Department of Education's
repayment calculator website for students with
instruction that this website contains customizable
estimates of expected repayment costs under different
loan repayment plans.
``(5) Process for accepting or declining aid and next
steps.--
``(A) The deadlines and a summary of the process
(including the next steps) for--
``(i) accepting the financial aid offered
in the financial aid offer form;
``(ii) requesting higher loan amounts if
recommended loan amounts were included; and
``(iii) declining aid offered in the form.
``(B) Information on when and how direct costs to
the institution must be paid.
``(C) A disclosure that verification of financial
circumstances may require the student to submit further
documentation.
``(D) Information about where a student or the
student's family can seek additional information
regarding the financial aid offered, including contact
information for the institution's financial aid office
and the Department of Education's website on financial
aid.
``(6) Additional information.--Any other information the
Secretary of Education, in consultation with the heads of
relevant Federal agencies, including the Secretary of the
Treasury and the Director of the Bureau of Consumer Financial
Protection, determines necessary (based on the results of the
consumer testing under paragraph (g)(2)) so that students and
parents can make informed loan borrowing decisions, which may
include--
``(A) the most recent cohort default rate, as
defined in section 435(m) of the Higher Education Act
of 1965 (20 U.S.C. 1085(m)) with respect to an
institution where more than 30 percent of enrolled
students borrow loans to pay for their education, and a
comparison to the national average cohort default rate;
``(B) the percentage of students at the institution
who borrow student loans;
``(C) the median loan debt at graduation for
students at the institution (clearly marked as
including only Federal loans if private loan data are
not available to be included); and
``(D) any additional calculations determined
necessary for ensuring that students understand full
college costs, financial aid gaps, and options for
covering those gaps.
``(c) Other Required Contents for the Offer Form.--The standard
form developed under subsection (a) shall include, in addition to the
information described in subsection (b), the following information to
be included on the financial aid offer form in a concise format
determined by the Secretary of Education, in consultation with the
heads of relevant Federal agencies:
``(1) At the institution's discretion--
``(A) additional options and potential resources
for paying for the amount listed in subsection (b)(3),
such as tuition payment plans; and
``(B) a disclosure that Federal Direct PLUS Loans
or private education loans may be available to cover
remaining need, except that the institution may not
include an amount for Federal Direct PLUS Loans or
private education loans and must include a disclosure
for Federal Direct PLUS Loans that such loans are
subject to an additional application process, and a
disclosure that both types of loans have to be repaid
by the borrower, and may not be eligible for all the
benefits available for Federal Direct Stafford Loans or
Federal Direct Unsubsidized Stafford Loans.
``(2) The following information relating to private student
loans:
``(A) A statement that students considering
borrowing to cover the cost of attendance should
consider available Federal student loans prior to
applying for private education loans, including an
explanation that Federal student loans offer generally
more favorable terms and beneficial repayment options
than private loans.
``(B) The impact of a proposed private education
loan on the student's potential eligibility for other
financial assistance, including Federal financial
assistance under title IV of the Higher Education Act
of 1965 (20 U.S.C. 1070 et seq.).
``(C) A statement explaining the student's ability
to select a private educational lender of the student's
choice.
``(3) Information on work-study employment opportunities,
offered in accordance with part C of title IV of the Higher
Education Act of 1965 (20 U.S.C. 1087-51 et seq.) including a
disclosure that the work-study aid offered is subject to the
availability of qualified employment opportunities and is
disbursed over time as earned by the student. Work-study
employment opportunities (or a student's potential income based
on those opportunities) shall not be included in the category
of financial aid described under subsection (b)(2).
``(d) Additional Requirements for Financial Aid Offer Form.--The
financial aid offer form shall meet the following requirements:
``(1) Include, in addition to the requirements described in
subsections (b) and (c), a concise summary, in plain language,
of--
``(A) the terms and conditions of financial aid
recommended under paragraphs (2) and (4) of subsection
(b) and subsection (c)(3), and a method to provide
students with additional information about such terms
and conditions, such as links to the supplementary
information; and
``(B) Federal, State, or institutional conditions
required to receive and renew financial aid and a
method to provide students with additional information
about these conditions, such as links to the
supplementary information.
``(2) Clearly distinguish between the aid offered under
paragraphs (2) and (4) of subsection (b) and subsection (c)(3),
by including a subtotal for the aid offered in each of such
paragraphs and by refraining from commingling the different
types of aid described in such paragraphs.
``(3) Use standard terminology and definitions, as
described in subsection (e)(1) and use plain language where
possible.
``(4) If an institution's recommended Federal student loan
aid offered in subsection (b)(4) is less than the Federal
maximum available to the student, the institution shall provide
additional information on Federal student loans, including the
types and amounts for which the student is eligible in an
attached document or webpage.
``(5) Use the standard offer form described in subsection
(e)(2).
``(6) Include the standardized statement regarding the
possible availability of Federal education benefits, as
established by the Secretary in accordance with subsection
(e)(3).
``(7) Include a delivery confirmation for electronic
financial aid offer forms, except that receipt of the financial
aid offer form shall not be considered an acceptance or
rejection of aid by the student.
``(8) With respect to dependent students, any reference to
private education loans shall be accompanied by--
``(A) information about the availability of, and
terms and conditions associated with, Federal Direct
PLUS Loans under section 455 of the Higher Education
Act of 1965 (20 U.S.C. 1087e) for the student's parents
regardless of family income; and
``(B) a notification of the student's increased
eligibility for Federal student loans under title IV of
the Higher Education Act of 1965 (20 U.S.C. 1070 et
seq.) if the student's parents are not able to borrow
under the Federal Direct PLUS Loan program.
``(e) Standard Information Established by the Secretary.--
``(1) Standard terminology.--Not later than 3 months after
the date of enactment of the Understanding the True Cost of
College Act of 2023, the Secretary of Education, in
consultation with the heads of relevant Federal agencies,
including the Secretary of the Treasury and the Director of the
Consumer Financial Protection Bureau, representatives of
institutions of higher education, nonprofit consumer groups,
students, and secondary school and higher education guidance
counselors, shall establish standard terminology and
definitions for the terms described in subsection (b).
``(2) Standard form.--
``(A) In general.--The Secretary of Education shall
develop multiple draft financial aid offer forms for
consumer testing, carry out consumer testing for such
forms, and establish a finalized standard financial aid
offer form, in accordance with the process established
in subsection (g) and the requirements of this section.
``(B) Separate financial aid offer forms.--The
Secretary may develop separate financial aid offer
forms for--
``(i) undergraduate students and graduate
students; and
``(ii) first-time students and returning
students.
``(3) Additional benefits.--The Secretary of Education, in
consultation with the heads of relevant Federal agencies,
including the Secretary of the Treasury, the Secretary of
Veterans Affairs, the Secretary of Defense, and the Director of
the Consumer Financial Protection Bureau, shall establish
standard language notifying students that they may be eligible
for education benefits (and where students can locate more
information about such benefits) including benefits in
accordance with each of the following:
``(A) Chapter 30, 31, 32, 33, 34, or 35 of title
38, United States Code.
``(B) Chapter 101, 105, 106A, 1606, 1607, or 1608
of title 10, United States Code.
``(C) Section 1784a, 2005, or 2007 of title 10,
United States Code.
``(f) Supplemental Information; Removal of Information.--
``(1) Nothing in this section shall preclude an institution
from supplementing the financial aid offer form with additional
information if such additional information supplements the
financial aid offer form and is not located on the financial
aid offer form, and provided such information utilizes the same
standard terminology identified in subsection (e)(1).
``(2) Nothing in this section shall preclude an institution
from deleting a required item if the student is ineligible for
such aid.
``(g) Development of Financial Aid Offer Form.--
``(1) Draft form.--Not later than 9 months after the date
of enactment of the Understanding the True Cost of College Act
of 2023, the Secretary of Education, in consultation with the
heads of relevant Federal agencies, including the Secretary of
the Treasury and the Director of the Consumer Financial
Protection Bureau, representatives of institutions of higher
education, nonprofit consumer groups, students, and secondary
school and higher education guidance counselors, shall design
and produce multiple draft financial aid offer forms for
consumer testing with postsecondary students or prospective
students. In developing that form, the Secretary shall ensure--
``(A) that the headings described in paragraphs (1)
through (4) of subsection (b) is in the same font,
appears in the same order, and is displayed prominently
on the financial aid offer form, such that none of that
information is inappropriately omitted or de-
emphasized;
``(B) that the other information required in
subsection (b) appears in a standard format and design
on the financial aid offer form; and
``(C) that the institution may include a logo or
brand alongside the title of the financial aid offer
form.
``(2) Consumer testing.--
``(A) In general.--Not later than 9 months after
the date of enactment of the Understanding the True
Cost of College Act of 2023, the Secretary of
Education, in consultation with the heads of relevant
Federal agencies, shall establish a process to submit
the financial aid offer form drafts developed under
paragraph (1) for consumer testing among
representatives of students (including low-income
students, first generation college students, adult
students, veterans, servicemembers, and prospective
students), students' families (including low-income
families, families with first generation college
students, and families with prospective students),
institutions of higher education, secondary school and
postsecondary counselors, and nonprofit consumer
groups.
``(B) Pilot.--During such consumer testing, the
Secretary shall ensure that not less than 16 and not
more than 24 eligible institutions use the draft forms
developed under paragraph (1), including institutions--
``(i) that reflect a proportionate
representation (based on the total number of
students enrolled in postsecondary education)
of community colleges, for-profit institutions,
four year public institutions, and four year
private nonprofit institutions; and
``(ii) that reflect geographic diversity.
``(C) Length of consumer testing.--The Secretary of
Education shall ensure that the consumer testing under
this paragraph lasts no longer than 8 months after the
process for consumer testing is developed under
subparagraph (A).
``(3) Final form.--
``(A) In general.--The results of consumer testing
under paragraph (2) shall be used in the final
development of the financial aid offer form.
``(B) Reporting requirement.--Not later than 3
months after the date the consumer testing under
paragraph (2) concludes, the Secretary of Education
shall submit to Congress and publish on its website the
final standard financial aid offer form and a report
detailing the results of such testing, including
whether the Secretary of Education added any additional
items to the standard financial aid offer form pursuant
to subsection (b)(6).
``(4) Authority to modify.--The Secretary of Education may
modify the definitions, terms, formatting, and design of the
financial aid offer form based on the results of consumer
testing required under this subsection and before finalizing
the form, or in subsequent consumer testing. The Secretary may
also recommend additional changes to Congress.''.
SEC. 3. MANDATORY FORM.
Part B of title I of the Higher Education Act of 1965 (20 U.S.C.
1011 et seq.) is amended by adding at the end the following:
``SEC. 124. USE OF MANDATORY FINANCIAL AID OFFER FORM AND TERMS.
``(a) In General.--Notwithstanding any other provision of law, each
institution of higher education that receives Federal financial
assistance under this Act shall--
``(1) use the financial aid offer form developed under
section 484 of the Higher Education Opportunity Act (20 U.S.C.
1092 note) in providing paper, mobile-optimized offers, or
other electronic offers to all students who apply for aid and
are accepted at the institution; and
``(2) use the standard terminology and definitions
developed by the Secretary of Education under subsection (e)(1)
of that Act for all communications from the institution related
to financial aid offers.
``(b) Effective Dates.--The requirements under this section shall
take effect at the start of the first award year after the Secretary of
Education finalizes the standard terminology and form developed in
accordance with section 484 of the Higher Education Opportunity Act (20
U.S.C. 1092 note).''.
``(c) Administrative Procedures.--Section 492 of the Higher
Education Act (20 U.S.C. 1098a) shall not apply with respect to
regulations promulgated in accordance with this section.''.
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