Sec. 8. Making institutional student aid award letters comparable and easier to understand

3,755 words·~17 min read·/bill/116/s/2557/is/section-8

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

Section 485 ( 20 U.S.C. 1092 ), as amended by section 3(o), is amended by inserting after subsection

(j)the following: The Secretary of Education, in consultation with the heads of relevant Federal agencies, shall develop standard terminology and a standard format for financial aid offers (including a uniform title used to describe the applicable document) based on recommendations from representatives of students, veterans, servicemembers, students’ families, institutions of higher education (including community colleges, for-profit institutions, 4-year public institutions, and 4-year private nonprofit institutions), financial aid experts, secondary school and postsecondary counselors, nonprofit organizations, and consumer groups. The standard format developed under paragraph

(1)shall be presented in a consumer-friendly manner that is simple and understandable. The standard format shall include the following items clearly separated from each other with separate headings, and, if in a format designed for paper shall be listed on the first page of the financial aid offer and if in a format designed for digital viewing shall be listed first: Information on the student’s estimated annual cost of attendance, including the following: Total direct costs, including the component annual totals each for— tuition and fees, as determined under section 472; and institutionally owned or operated housing and food costs (as determined based on the costs for housing and food under section 472). Total estimated other annual expenses, including— the component totals each for housing and food costs for students who do not reside on campus, as determined under section 472(3)(D); and for all students, books, supplies, transportation, miscellaneous personal expenses, health insurance (if applicable), and child care (if applicable), as determined under section 472. An indication of the academic period covered by the financial aid offer relative to the published program length, and an explanation that the financial aid offered may change for academic periods not covered by the aid offer. An indication of whether cost and aid estimates are based on full-time or part-time enrollment. An indication, as applicable, about whether the tuition and fees are estimated based on the previous year, or are set, for the academic period covered by the financial aid offer indicated in accordance with clause (ii). The amount and source of financial aid that the student does not have to repay, such as scholarships, grant aid offered under this title, grant aid offered through other Federal programs, or grant aid offered by the institution, a State, or, if known, an outside source to the student for such academic period, including— a disclosure that the financial aid does not have to be repaid; and if institutional aid is included— 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 whether the institutional aid offer may change if grants or scholarships from outside sources are applied after the student receives the offer, and, if applicable, how that aid will change. 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— the cost of attendance as described in subparagraph (A)(i) for the student for the period indicated in subparagraph (A)(ii); and minus the amount of grant aid described in subparagraph

(B)that is included in the financial aid offer. A disclosure that the net price is an estimate of the total expenses for the year and not the amount that the student will owe directly to the institution. Information on work-study employment opportunities, offered in accordance with part C. This information shall include— the amount of work-study offered; a disclosure that the work-study aid offered is subject to the availability of qualified employment opportunities; a statement that work-study aid does not need to be repaid and can offset the need to borrow; and a disclosure that work-study 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 subparagraph (B). Information on the amount of loans under part D (except a Federal Direct PLUS Loan under part D) that the institution recommends for the student for the academic period covered by the offer, which shall be made— with clear use of the word loan to describe the recommended loan amounts; and with clear labeling of subsidized and unsubsidized loans. 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. If an institution’s recommended Federal student loan amount is less than the Federal maximum available to the student, the institution shall clearly state the applicable loan limit for Federal student loans for which the student is eligible and a prominent recommendation that students should exhaust any Federal student loan eligibility before taking out private education loans. A disclosure that the interest rates and fees on such loans are set annually and affect total cost over time, and a link to electronic information by the Department of Education that includes current information on interest rates and fees. A link to the Department of Education’s electronic repayment calculator for students with instruction that this calculator contains customizable estimates of expected repayment costs under different loan repayment plans. If the institution does not participate in the loan program under part D, an explanation of why the institution does not participate, and a disclosure that students may have the option to borrower Federal student loans at another institution. The deadlines and a summary of the process (including the next steps) for— accepting the financial aid offered in the financial aid offer; requesting different loan amounts than the recommended loan amounts; and declining aid offered. Information on when and how direct costs to the institution must be paid. A disclosure that verification of financial circumstances may require the student to submit further documentation. 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. If 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, the Secretary determines the inclusion of additional information is necessary (based on the results of the consumer testing under paragraph (7)(B)) so that students and parents can make informed loan borrowing decisions, this information shall be included. Such information may include— the most recent cohort default rate, as defined in section 435(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; the percentage of students at the institution who borrow student loans; 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); the estimated monthly loan payment based on— the median loan debt at graduation calculated under clause

(iii)and the standard repayment plan; and the median loan debt at graduation calculated under clause

(iii)and the median payment for various example salaries under the Income Contingent Repayment plan known as Revised Pay As You Earn; and the estimated institutional charges that the student, or the student’s family on behalf of the student, will have to pay directly to the institution for the student to attend the institution for the academic period described in subparagraph (A)(ii), equal to— the total direct costs described in subparagraph (A)(i)(I) for the student for the period indicated in subparagraph (A)(ii); minus the amount of grant aid described in subparagraph

(B)that is included on the financial aid offer. The standard financial aid offer developed under paragraph

(1)shall include, in addition to the information described in paragraph (2), the following information in a concise format located after the requirements of paragraph (2), where the format shall be designed by the Secretary of Education in consultation with the heads of relevant Federal agencies: At the institution’s discretion— additional options and potential resources for paying for the amount listed in paragraph (2)(C), such as tuition payment plans; for an undergraduate student, a disclosure that Federal Direct Parent PLUS Loans borrowed on behalf of the student or private education loans may be available to cover unmet financial need, except that the institution must include a disclosure that such loans are subject to an additional application process, have to be repaid by the borrower or the borrower’s parents, as applicable, include the applicable interest rate in the case of Federal Direct PLUS Loans, and that such loans may not be eligible for all the benefits available for Federal Direct Subsidized Loans or Federal Direct Unsubsidized Loans; and for a graduate student, a disclosure that private education loans may be available to cover unmet financial need, except that the institution must include a disclosure that such loans are subject to an additional application process, have to be repaid by the borrower, and are not eligible for all the benefits available for Federal Direct Loans or Federal PLUS Loans. If the institution includes private education loans in the financial aid offer, as allowed under subparagraph (A), the following information shall be included: A statement that students considering borrowing to cover unmet need should exhaust available Federal financial aid, including Federal student loans, prior to applying for or taking out private education loans, including an explanation that Federal student loans offer generally more favorable terms and beneficial repayment options than private education loans. The impact of private education loans on the student’s potential eligibility for other financial assistance, including Federal financial assistance under this title. A statement explaining the student’s ability to select a private educational lender of the student’s choice. For any dependent student, information about the availability of, and terms and conditions associated with, Federal Direct PLUS Loans under section 455 for the student’s parents regardless of family income. For any dependent student, a notification of the student’s increased eligibility for Federal student loans under this title if the student’s parents apply for a Federal Direct PLUS loan and are denied. The following information regarding the total cost of a degree or certificate program: Information on the student’s estimated total cost of attendance, based on the published program length, including the following: Total estimated direct costs based on the published program length, including the component totals each for— tuition and fees, as determined under section 472; and institutionally owned or operated housing and food costs (as determined based on the costs for housing and food under section 472). Total estimated other expenses based on the published program length, including— the component totals each for housing and food costs for students who reside off-campus; and for all students, books, supplies, transportation, miscellaneous personal expenses, health insurance (if applicable), and child care (if applicable), as determined under section 472. The estimated total 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 the published program length, equal to— the estimated total cost of attendance as described in clause

(i)for the student based on the published program length; minus the estimated total amount of grant aid described in paragraph (2)(B) that is estimated to continue for the program length and is included in the financial aid offer, based on the published program length. A disclosure that the estimated total net price is an estimate of the total expenses for the published program length and not equivalent to the amount the student will owe directly to the institution over the published program length. The financial aid offer shall meet the following requirements: Include, in addition to the requirements described in paragraphs

(2)and (3), a concise summary, in plain language, of— the terms and conditions of financial aid recommended under subparagraphs (B), (D), and

(E)of paragraph (2), and a method to provide students with additional information about such terms and conditions, such as links to the supplementary information; and 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. Clearly distinguish between the aid offered in subparagraphs (B), (D), and

(E)of paragraph (2), by including a subtotal for the aid offered in each of such subparagraphs which shall not combine the different types of aid described in such subparagraphs. Use standard terminology and definitions, as required in paragraph (5)(A), and use plain language where possible. Use the standard financial aid offer described in paragraph (5)(B). Include the standardized statement regarding the possible availability of Federal education benefits, as established by the Secretary in accordance with paragraph (5)(C). Include a delivery confirmation for electronic financial aid offer, except that receipt of the financial aid offer shall not be considered an acceptance or rejection of aid by the student. The Secretary of Education shall use the standard terminology developed under paragraph (8). The Secretary of Education shall develop multiple draft financial aid offers for consumer testing, carry out consumer testing for such offers, and establish a finalized standard financial aid offer or offers, in accordance with the process established in paragraph

(7)and the requirements of this subsection. Subject to the requirements for consumer testing and development described in paragraph (7), the Secretary may develop separate financial aid offer formatting for each of the following individual types of students that must follow a standard format within each such individual type of students: New undergraduate students. Returning undergraduate students. New graduate and professional students. Returning graduate and professional students. 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: Chapter 30, 31, 32, 33, 34, or 35 of title 38, United States Code. Chapter 101, 105, 106A, 1606, 1607, or 1608 of title 10, United States Code. Section 1784a, 2005, or 2007 of title 10, United States Code. The Secretary of Education, in consultation with the heads of relevant Federal agencies, shall establish standard language notifying students that they may be eligible for means-tested benefits (and where students can locate more information about such benefits) including benefits from— the supplemental security income program under title XVI of the Social Security Act ( 42 U.S.C. 1381 et seq.); the supplemental nutrition assistance program under the Food and Nutrition Act of 2008 ( 7 U.S.C. 2011 et seq.); the program of block grants for States for temporary assistance for needy families established under part A of title IV of the Social Security Act ( 42 U.S.C. 601 et seq.); the special supplemental nutrition program for women, infants, and children established by section 17 of the Child Nutrition Act of 1966 ( 42 U.S.C. 1786 ); the Medicaid program under title XIX of the Social Security Act ( 42 U.S.C. 1396 et seq.); and any other means-tested program determined by the Secretary to be appropriate. Nothing in this section shall preclude an institution from supplementing the financial aid offer with additional information if such additional information supplements the financial aid offer and is not located on the financial aid offer, and provided such information utilizes the same standard terminology identified in paragraph (5)(A). Nothing in this section shall preclude an institution from deleting a required item if the borrower is ineligible for such aid. Not later than 13 months after the date of enactment of the Student Aid Improvement Act of 2019 , 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 offers for consumer testing with postsecondary students or prospective students. In developing that offer or those offers, the Secretary shall ensure— that the information described in subparagraphs

(A)through

(E)of paragraph

(2)is in the same font, appears in the same order, and is displayed prominently on the first page of the financial aid offer, if in paper format, or in a similarly prominent place if in electronic format, such that none of that information is inappropriately omitted or de-emphasized; that the other information required in paragraph

(2)appears in a standard format and design on the financial aid offer; and that the institution may include a logo or brand alongside the title of the financial aid offer. The Secretary of Education, in consultation with the heads of relevant Federal agencies, shall establish a process to submit the financial aid offer drafts developed under subparagraph

(A)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. During such consumer testing, the Secretary shall ensure that not less than 25 and not more than 50 eligible institutions use the draft offers developed under subparagraph (A), including institutions— that reflect a proportionate representation (based on the total number of students enrolled in postsecondary education) of community colleges, for-profit institutions, 4-year public institutions, and 4-year private nonprofit institutions; and that reflect geographic diversity. The results of consumer testing under subparagraph

(B)shall be used in the final development of the financial aid offer. Not later than 2 years after the date of enactment of the Student Aid Improvement Act of 2019 , the Secretary of Education shall submit to Congress and publish on its website the final standard financial aid offer 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 pursuant to paragraph (2)(G) or whether the Secretary of Education is recommending the use of multiple formats under paragraph (5)(B). If, based on the consumer testing under subparagraph (B), there is strong evidence for the use of different offers that follow a standard format for individual types of students as described in paragraph (5)(B)(ii), the Secretary shall release more than one standardized final financial aid offer so long as each form follows a standard format for each individual type of student. The Secretary of Education may modify the definitions, terms, formatting, and design of the financial aid offer based on the results of consumer testing required under this subsection and before finalizing the offer, or in subsequent consumer testing. The Secretary may also recommend additional changes to Congress. As soon as practicable, and not later than for the 2023–2024 award year, each eligible institution shall use the final standard financial aid offer, as published in accordance with subparagraph

(C)(which may include different standardized final financial aid offers if established under subparagraph (C)(iii)). Not later than 180 days after the date of enactment of the Student Aid Improvement Act of 2019 , the Secretary, in consultation with other relevant Federal agencies, representatives of institutions of higher education, nonprofit consumer groups, students, and secondary school and postsecondary school guidance counselors, shall develop or identify and release for notice and comment for a period of 60 days— standard terms and definitions for each term listed in subparagraphs

(A)through

(E)of paragraph (2); standard names and a summary of the terms and conditions of each individual Federal grant and work-study program under this title, including general information about eligibility; and standard names and a summary of the terms and conditions of each Federal loan program under this title, including general information about eligibility, current interest rates, the ability to make payments based on income, forgiveness, cancellation, and any other available benefits of the Federal loan program. The Secretary shall conduct consumer testing on the items developed under this paragraph among representatives of students (including low-income students, first generation college students, adult students, and prospective students), students’ families (including low-income families, families of first generation college students, and families of prospective students), institutions of higher education, secondary school and postsecondary school counselors, and nonprofit consumer groups. The Secretary shall— use the results of the consumer testing under this clause in the final establishment of each of the items listed in subparagraph (A); and share the results of that testing with relevant stakeholders. Not later than 1 year after the date of enactment of the Student Aid Improvement Act of 2019 , and after the consideration of public comments received pursuant to subparagraph (A), the Secretary shall submit a report to Congress containing— the final names, definitions, summaries, terms, conditions, and other information described in subparagraph

(A)determined necessary by the Secretary; and the results of the consumer testing under subparagraph (B). Not later than 1 year after the date of enactment of the Student Aid Improvement Act of 2019 , the Secretary shall publish in the Federal Register and make publicly available the final established names, definitions, summaries, terms, and conditions, as described in subparagraph

(A)and contained in the report under subparagraph (C). As soon as practicable, and not later than for the 2022–2023 award year, each eligible institution shall use the final established names, definitions, summaries, and terms and conditions, as published in accordance with clause (i), for any communication that is required under this subsection. As soon as practicable, the Department of Education shall use the final established names, definitions, summaries, terms, and conditions, as published in accordance with clause (i), for any communication regarding programs under this title. The Secretary shall— issue updates to the items listed in subparagraph

(A)as necessary and appropriate; issue such updates in a manner that is consistent with and sensitive to established institutional financial aid processes; issue significant updates only after conducting additional consumer testing in accordance with subparagraph (B); and publish any such updates in the Federal Register and make them publicly available. .

Connectionstraces to 6

Traces to 6 documents

U.S. Code

Citation graph

cites case law

Sec. 8

Making institutional student aid award letters comparable and easier to understand

Cites 6Cited by 0 across 0 sources