College Cost Transparency and Student Protection Act
This bill outlines requirements for financial aid offers that must be provided to prospective and enrolled students.
Specifically, the bill requires the Department of Education (ED) to publish requirements for financial aid offers that each institution of higher education (IHE) participating in federal student aid programs must provide to students. These requirements include standardized terms and definitions, certain formatting requirements, and components regarding costs.
In particular, a financial aid offer must first include a component related to direct costs (i.e., tuition, fees, and other expenses required for the student to enroll in the IHE). If the student completes the component related to direct costs and confirms that the student is seeking financial assistance for indirect costs (e.g., housing and food, books and supplies, and transportation), then the offer must include components related to those indirect costs. IHEs may not refer to these offers as award letters.
The bill requires ED to ensure that information published on the website of each IHE or the College Scorecard includes information on costs, earnings, and loan payments in a manner consistent with financial aid offers. The College Scorecard is a comparison tool for information on school sizes, settings, graduation rates, average costs, and salary ranges per field of study.
[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9429 Introduced in House (IH)]
<DOC>
117th CONGRESS
2d Session
H. R. 9429
To amend the Higher Education Act of 1965 to direct the Secretary of
Education to publish requirements for financial aid offers to be
provided by institutions of higher education to enrolled and
prospective students, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
December 5, 2022
Mrs. McClain (for herself and Ms. Foxx) introduced the following bill;
which was referred to the Committee on Education and Labor
_______________________________________________________________________
A BILL
To amend the Higher Education Act of 1965 to direct the Secretary of
Education to publish requirements for financial aid offers to be
provided by institutions of higher education to enrolled and
prospective students, 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 ``College Cost Transparency and
Student Protection Act''.
SEC. 2. FINANCIAL AID OFFERS.
Section 485 of the Higher Education Act of 1965 (20 U.S.C. 1092) is
amended by adding at the end the following:
``(n) Financial Aid Offers.--
``(1) Institutional requirements.--Beginning with the first
award year that begins not less than 1 year after the Secretary
publishes requirements under subparagraph (2), each institution
of higher education participating in any program under this
title shall provide to each enrolled student (and prospective
student accepted for enrollment) at such institution who
applies for financial assistance under this title, a financial
aid offer that--
``(A) shall comply with the requirements published
by the Secretary under paragraph (2); and
``(B) may be supplemented by the institution with
additional, non-contradictory information related to
financial aid as long as such supplementary information
uses the standardized terms and definitions described
in paragraph (2).
``(2) Secretarial requirements.--Not later than 18 months
after the date of enactment of the College Cost Transparency
and Student Protection Act, the Secretary shall, based on the
consumer testing conducted under paragraph (4), publish
requirements for financial aid offers to be used by
institutions of higher education under paragraph (1), which
shall--
``(A) serve as the primary source for Federal,
State, and institutional financial aid information
provided by an institution of higher education
participating in any program under this title to each
enrolled student (and prospective student accepted for
enrollment) at such institution;
``(B) include a requirement that no financial aid
offer may be referred to as an award letter;
``(C) include the required content described in
paragraph (3);
``(D) establish standardized terms and definitions,
including for the required content described in
paragraph (3), which shall be included in each
financial aid offer; and
``(E) establish formatting requirements with
respect to the organization of the contents described
in paragraph (3), which--
``(i) shall include--
``(I) a requirement that prohibits
any such offer from displaying loans in
a manner that indicates or implies that
such loans reduce the amount owed to
the institution or reduce the out-of-
pocket costs; and
``(II) requirements that ensure
that before completing the component of
an offer relating to indirect costs, a
student completes the component of an
offer relating to direct costs and
confirms that such student is seeking
financial assistance for indirect
costs; and
``(ii) may not establish, or require that
institutions of higher education use, a uniform
format for such offers.
``(3) Required content for a financial aid offer.--
``(A) In general.--An institution of higher
education shall provide, to each enrolled student (and
prospective student accepted for enrollment) at such
institution who applies for financial assistance under
this title, a financial aid offer for an academic
period covered by such offer, which shall include the
following:
``(i) A component relating to the direct
costs for such student for such academic
period, which shall include the content
described in subparagraphs (B) and (D).
``(ii) In a case in which the student
completes the component described in clause (i)
and confirms that such student is seeking
financial assistance for indirect costs for
such academic period, a component relating to
such indirect costs, which shall include the
content described in subparagraphs (C) and (D).
``(B) Component for direct costs.--The component of
a financial aid offer relating to direct costs shall
include the following content:
``(i) Estimated sum of direct costs.--The
estimated sum of the student's direct costs for
the academic period covered by such offer,
which shall be the sum of--
``(I) the cost of tuition and fees,
as defined in section 472(a)(1), as
amended by section 702 of the FAFSA
Simplification Act; and
``(II) any other required expenses,
as determined by the institution and
presented as an itemized list.
``(ii) Grants and scholarships.--
``(I) In general.--The aggregate
amount of grants and scholarships by
source that the student does not have
to repay, such as grant aid offered
under this title 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
for such academic period.
``(II) Federal grant aid.--With
respect to Federal grant aid, the
conditions under which the student can
expect to receive similar amounts of
such Federal grant aid for each
academic period the student is enrolled
at the institution.
``(III) Institutional grant aid.--
With respect to institutional grant
aid--
``(aa) the conditions under
which the student can expect to
receive similar amounts of such
institutional grant aid for
each academic period the
student is enrolled at the
institution; and
``(bb) whether the
institutional grant aid offer
may change if grants or
scholarships from outside
sources are applied after the
student receives the financial
aid offer, and, if applicable,
how that institutional grant
aid will change.
``(IV) Indirect costs.--An
identification of any grants or
scholarships described in subclause (I)
that are required to be used for any
indirect costs selected by the student
under subparagraph (C)(i).
``(iii) Out-of-pocket costs (relating to
direct costs).--The out-of-pocket costs
(relating to direct costs) 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 estimated sum of the
student's direct costs described in
clause (i); minus
``(II) the aggregate amount of
grants and scholarships described in
clause (ii) that may be used to cover
such direct costs.
``(iv) Financing options.--
``(I) In general.--In plain
language and based on consumer testing
under paragraph (4), the offer shall
include the following financing options
(in the following order) to cover the
total out-of-pocket costs determined
under clause (iii):
``(aa) Cash or other
personal resources, including
the expected family
contribution of the student.
``(bb) Loans made to the
student under part D (excluding
Federal Direct PLUS Loans),
which shall--
``(AA) clearly
label whether the loan
is subsidized or
unsubsidized; and
``(BB) require the
student to (1) accept
any such loan by
specifying the loan
amount the student is
accepting (which may be
an amount that is less
than the maximum amount
for which such student
is eligible under part
D) or (2) decline any
such loan.
``(cc) Work-study
employment opportunities,
offered in accordance with part
C, and other campus employment,
if applicable, which shall
require the student to (1)
accept any such opportunity or
(2) decline any such
opportunity.
``(II) Disclosures related to
covered financing options.--The
following disclosures, in a simple,
plain-language, and consumer-friendly
manner (based on the consumer testing
under paragraph (4)):
``(aa) Grants and
scholarships.--Grants and
scholarships do not have to be
repaid.
``(bb) All loans.--All
loans must be repaid with
interest.
``(cc) Federal work-study
aid.--Any work-study employment
opportunity offered under part
C is subject to the
availability of qualified
employment opportunities and is
disbursed over time as earned
by the student.
``(III) Disclosure related to other
financing options.--A disclosure that
other financing options (not listed in
subclause (I)) may be available,
including private education loans,
Federal Direct PLUS loans, or
institutional or State loans, if
applicable.
``(IV) Tuition payment plans.--In
plain language, the offer shall include
information on tuition payment plans,
if applicable.
``(v) Disclosure and confirmation relating
to indirect costs.--A disclosure that the
financing options for indirect costs selected
by the student under subparagraph (C)(i) may
include loans that must be repaid with
interest, and a requirement for the student to
confirm whether the student is seeking
financial assistance for such indirect costs.
``(C) Component for indirect costs.--The component
of a financial aid relating to indirect costs shall
include the following content:
``(i) Selection of indirect costs.--The
student shall have the ability to select each
component of the cost of attendance under
section 472, as amended by section 702 of the
FAFSA Simplification Act (other than the direct
costs determined under subparagraph (B)(i)) for
which the student needs support for the
academic period covered by the offer, which may
include components relating to housing and
food, books and supplies, transportation, and
miscellaneous personal expenses.
``(ii) Estimated sum of indirect costs.--
The estimated sum of the student's indirect
costs for the academic period covered by such
offer, as determined by the sum of each of the
components of indirect costs selected under
clause (i).
``(iii) Grants and scholarships.--Any
amounts of the grants and scholarships
identified under subparagraph (B)(ii), which--
``(I) remain available after
financing the direct costs determined
under subparagraph (B)(i); or
``(II) are required to be used for
indirect costs, as described in
subclause (II) of subparagraph (B)(ii).
``(iv) Out-of-pocket costs (relating to
indirect costs).--The out-of-pocket costs
(relating to indirect costs) 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 estimated sum of indirect
costs determined under clause (ii);
minus
``(II) the amount of grants and
scholarships determined under clause
(iii).
``(v) Total cost of attendance.--The total
cost of attendance for the student, equal to
the sum of--
``(I) the estimated sum of the
student's direct costs determined
subparagraph (B)(i); and
``(II) the estimated sum of the
student's indirect costs determined
under clause (ii).
``(vi) Total out-of-pocket costs.--The
total out-of-pocket costs 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 the sum of--
``(I) the out-of-pocket costs
(relating to direct costs) determined
under subparagraph (B)(iii); and
``(II) the out-of-pocket costs
(relating to indirect costs) determined
under clause (iv).
``(vii) Financing options.--In plain
language, the offer shall include--
``(I) each of the financing options
listed under subparagraph (B)(iv)(I),
which remain available after financing
the direct costs determined under
subparagraph (B)(i); and
``(II) the disclosures described in
subclauses (II) and (III) of
subparagraph (B)(iv).
``(D) Required contents for both components.--Each
component of the offer described in clauses (i) and
(ii) of subparagraph (A) shall include the following
content:
``(i) Academic period.--An indication of
the academic period covered by the financial
aid offer, an explanation that the financial
aid offered may change for academic periods not
covered by the aid offer or by program, and an
indication, as applicable, about whether the
costs identified under such offer are estimated
based on the previous year, or are set, for the
academic period covered by such offer.
``(ii) Enrollment intensity.--An indication
of whether cost and aid estimates are based on
full-time or part-time enrollment.
``(iii) Institutional grant aid.--In the
case of an institution of higher education that
adjusts awards of institutional grant aid based
on student receipt of financial assistance not
received under this title--
``(I) a statement that eligibility
for institutional grant aid may be
impacted by the receipt of financial
assistance not received under this
title (including all scholarships,
grants, loans, or other assistance
known to the institution at the time
the determination of the student's need
is made); and
``(II) the institutional policies
relating to how receipt of such
assistance may impact eligibility for,
and the amount of, institutional grant
aid.
``(iv) Next step instructions.--Next step
instructions, including--
``(I) the process and deadlines for
accepting (and declining) the financial
aid offered in the offer; and
``(II) information about where to
find additional information on the
financial aid offered, including
contact information for the
institution's financial aid office and
the Department of Education's website
on financial aid.
``(v) Statistics on post completion
earnings and loan repayment.--
``(I) In general.--Statistics
(which may be presented as monthly
amounts) on the median earnings and
median payments on loans made under
part D (excluding Federal Direct PLUS
Loans), for graduates of, or
individuals who complete, the program
for which the student receiving the
financial aid offer is enrolled (or, in
a case in which the student has not
selected a program of study, for the
institution).
``(II) Disclosure.--Any statistics
provided under this clause shall
include a disclosure that such
statistics may not apply to the student
receiving the offer.
``(vi) Information for prospective
students.--In the case of a prospective
student, the process and deadlines for
enrolling at the institution, if such
information is determined necessary by the
Secretary based on the consumer testing
conducted under paragraph (4).
``(vii) Delivery confirmation.-- Include a
delivery confirmation for electronic financial
aid offer forms, except that receipt of the
forms shall not be considered an acceptance or
rejection of aid.
``(4) Consumer testing.--The Secretary shall--
``(A) conduct consumer testing that shall--
``(i) serve as the basis in determining the
requirements for financial aid offers published
under paragraph (2); and
``(ii) include students (including low-
income students, English learners, first
generation college students, veteran students,
graduate students, and undergraduate students
(including prospective students and returning
students)), students' families (including low-
income families, families of English learners,
and families with first generation college
students), institutions of higher education
(including representatives from two- and four-
year institutions, public and private
institutions, and minority-serving
institutions), secondary school and
postsecondary counselors, financial aid
administrators, nonprofit college access
organizations, and nonprofit consumer groups;
and
``(B) not later than 60 days after the publication
of the requirements under paragraph (2)--
``(i) issue a report on the findings of the
consumer testing under this paragraph; and
``(ii) specify ways in which the findings
are reflected in such requirements.
``(5) Data reporting.--Not later than 18 months after the
date of enactment of the College Cost Transparency and Student
Protection Act, the Secretary shall ensure that information
published on the College Scorecard website of the Department
(or any successor website), or the website of each institution
of higher education participating in any program under this
title--
``(A) with respect to the net price or the cost of
attendance of an institution of higher education,
provides separate cost estimates for direct costs and
indirect costs, in a manner consist with the standard
terms and definitions published under paragraph (2);
and
``(B) with respect to the median earnings or median
payments on loans made under this title for students
who complete a program of study at an institution of
higher education, provides such information in a manner
consistent with paragraph (3)(D)(v).
``(6) Definitions.--In this subsection--
``(A) the term `cost of attendance' has the meaning
given the term in section 472;
``(B) the term `direct costs', used with respect to
a student, means the costs determined under paragraph
(3)(B)(i) for such student;
``(C) the term `English learner' has the meaning
given the term in section 8101(20) of the Elementary
and Secondary Education Act of 1965 (20 U.S.C.
7801(20)), except that such term does not include
individuals described in subparagraph (B) of such
section;
``(D) the term `first generation college student'
has the meaning given the term in section 402A(h);
``(E) the term `indirect costs', used with respect
to a student, means the costs determined under
paragraph (3)(C)(ii) for such student;
``(F) the term `low-income student' has the meaning
given the term in section 419N(b)(7);
``(G) the term `minority-serving institution' means
an institution of higher education described in section
371(a); and
``(H) the term `private education loan' has the
meaning given the term in section 140 of the Truth in
Lending Act.''.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Education and Labor.
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