Sec. 111. Financial aid offers
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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: The Secretary, in consultation with the heads of relevant Federal agencies, shall develop standard terminology and a standard form for financial aid offers based on recommendations from representatives of students, veterans, servicemembers, families of students, 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, college access professionals, nonprofit organizations, and consumer groups.
The standard form developed pursuant to subsection
(a)shall be titled Financial Aid Offer and shall include the following items in a consumer-friendly manner that is simple and understandable, with costs listed first, followed by grants and scholarships, clearly separated from each other with separate headings: Information on the student’s estimated cost of attendance, including the following: The total cost of all items described in section 472 that are billed to the student by the institution or otherwise required by the institution for enrollment, including such total cost disaggregated by the cost of each such item, including, as determined under such section— tuition and fees (and other required expenses); and housing and food for a student electing institutionally owned or operated food services or institutionally owned or operated housing. The total cost (including such total cost disaggregated by the cost of each item) as determined under section 472, of— housing and food for a student not electing institutionally owned or operated food services and not living in institutionally owned or operated housing; books, school supplies, equipment, course materials, and rental or purchase of a personal computer; transportation; and any other item described in such section and not described in clause
(i)determined to be necessary by the institution. The academic period covered by the financial aid offer, and an explanation that the amount of financial aid offered may differ— for academic periods not covered by the aid offer, such as a summer term or future academic year; or by program. An indication of whether cost and aid estimates are based on full-time or part-time enrollment. An indication, as applicable, about whether any costs described in subparagraph (A)(i) which are subject to change are— estimated based on the previous year; or set for the academic period indicated in accordance with subparagraph (B). The aggregate amount of grants and scholarships, differentiated by source, that the student does not have to repay, such as grant aid offered under title IV, grant aid offered through other Federal programs, grant aid offered by the institution, grant aid offered by the State, and, if known, grant aid or scholarship from an outside source to the student for such academic period, including a disclosure that the grants and scholarships do not have to be repaid, except that institutions shall be authorized to list individual grants and scholarships by name at the discretion of the institution. The net price that the student, is estimated to have to pay for the student to attend the institution for such academic period, including the following: The net price of tuition and fees (and other required expenses), which is equal to— the sum of the costs described in paragraph (1)(A) that are required for students (as determined under paragraph (5)(B)) for the period indicated in paragraph (1)(B); minus the total amount of grant and scholarship aid described in paragraph
(2)that is included in the financial aid offer and available to the student for the costs described in subclause (I). The estimated net price of attendance, which is equal to— the cost of attendance for the student for the period indicated in paragraph (1)(B); minus the total amount of grant and scholarship aid described in paragraph (2). A disclosure that the estimated annual net price of attendance as calculated under subparagraph (A)(ii) is based on an estimate of the total cost of attendance for the year and not necessarily equivalent to the amount the student will owe directly to the institution. Information on any education loan offered through any Federal or State program (including any loan under part D or part E of title IV other than a Federal Direct PLUS Loan) that the institution offers 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. If applicable, a disclosure that such loans have to be repaid with interest. Information on any other loan that the student or parent has applied for and been approved for, regardless of the source. Information on work-study employment opportunities (including work-study programs under part C of title IV, institutional work-study programs, or State work-study programs), including— the maximum annual amount the student may earn through the program; and a disclosure that any amounts received pursuant to such a program may be— subject to the availability of qualified employment opportunities upon students enrollment; and disbursed over time as earned by the student. The deadlines and a summary of the process (including the next steps) for— accepting the financial aid offered; adjusting the amount of aid offered; and declining the aid offered. Information on when and how costs described in paragraph (1)(A)(i) must be paid, including a clear indication of whether each such cost is required or optional for the student. A disclosure that verification of information provided on the Free Application for Federal Student Aid 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. Information about where a student or a student’s family can seek additional information on college costs and student outcomes, including a link to the Department of Education’s College Scorecard website (or successor website). A link to the universal net price calculator website described in section 132(c)(4). A standardized quick reference box to enable students to compare information on the costs and financial aid described in paragraphs
(1)and (2). The quick reference box shall include the following two data elements: The minimum amount covered by the student for enrollment described in paragraph (3)(A)(i). The estimated annual net price of attendance described in paragraph (3)(A)(ii). Any other information the Secretary, 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 and input of the consumer testing under subsection (h)(2), and limited only to effectively communicating college costs and financial aid eligibility to students and parents. The standard form developed under subsection
(a)shall include, in addition to the information described in subsection (b), the following information in a concise format determined by the Secretary, in consultation with the heads of relevant Federal agencies and the individuals and entities described in subsection (a): Additional options and potential resources for paying for the amount listed in subsection (b)(3), such as tuition payment plans. The following information relating to private student loans and Federal Direct PLUS Loans: A disclosure that Federal Direct PLUS Loans, private education loans, or income share agreements may be available to cover remaining need, except that the institution may not include Federal Direct PLUS Loans or private education loans other than under the conditions described in subsection (b)(4)(C) and must include a disclosure that such loans— are subject to an additional application process; and must be repaid by the borrower or their co-signer, and may not be eligible for the benefits available for Federal Direct Loans or Federal Direct Unsubsidized Loans. 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. The financial aid offer shall meet the following requirements: Clearly distinguish between the aid offered under paragraphs
(2)and
(4)of subsection (b), 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. Use standard terminology and definitions, as described in subsection (f)(1), and use plain language where possible. Use the standard aid offer described in subsection (f)(2). In the case of an electronic financial aid offer that includes a requirement that a student confirm receipt of such offer, such confirmation may not be considered an acceptance or rejection of such offer. In addition to the standard form described under subsection (a), institutions shall provide, in supplemental documents or through easily accessible weblinks to the institution’s portal or a website, the following: The renewability requirements and 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. Whether the aid offer may change if aid from outside sources is applied after the student receives the initial aid offer, and, if applicable, how that aid will change. If loans under part D or part E of title IV or other education loans offered through Federal programs are included— a disclosure that the interest rates and fees on such loans are set annually and affect total cost over time, and a link to any website that includes current information on interest rates and fees; and 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 and the process for requesting higher loan amounts if offered loan amounts were included. If the institution opts not to disclose other items described in subsection (b)(1)(A)(ii)(V) as part of the aid offer, a list of such other items and the allowance amount for each such item. Not later than 3 months after the date of enactment of the College Cost Reduction Act, the Secretary, in consultation with the heads of relevant Federal agencies, and the individuals and entities described in subsection
(a)shall establish standard terminology and definitions for the terms described in subsection (b). The Secretary of Education shall develop multiple draft financial aid offers for consumer testing, carry out consumer testing for such forms, and establish a finalized standard financial aid offer in accordance with— the process established under subsection (h); and the requirements of this section. The Secretary shall develop separate financial aid offers for— undergraduate students; and graduate students. Nothing in this section shall preclude an institution from— supplementing the financial aid offer with additional information, provided that such information utilizes the same standard terminology identified in subsection (f)(1) and does not misrepresent costs, financial aid offered, or net price; or deleting a required item or disclosure if— the student is ineligible for such aid; the institution does not participate in the aid program or type; the aid offer does not include the aid program or type; or a cost of attendance item is not applicable to the student. Not later than 9 months after the date of enactment of the College Cost Reduction Act, the Secretary of Education, in consultation with the heads of relevant Federal agencies and the individuals and entities described in subsection
(a)shall design and produce multiple draft financial aid offers for consumer testing with postsecondary students or prospective students. In developing that form, the Secretary shall ensure that— the headings described in paragraphs
(1)through
(4)of subsection
(b)are in the same font, appears in the same order, and are displayed prominently on the financial aid offer, such that none of that information is inappropriately omitted or deemphasized; the other information required under subsection
(b)appears in a standard format and design on the financial aid offer; and the institution may include a logo or brand alongside the title of the financial aid offer. Not later than 9 months after the date of enactment of the College Cost Reduction Act, the Secretary, in consultation with the heads of relevant Federal agencies, shall establish a process to submit the financial aid offer 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. The Secretary shall ensure that the consumer testing under this paragraph lasts not longer than 8 months after the process for consumer testing is developed under subparagraph (A). Subchapter I of chapter 35 of title 44, United States Code, shall not apply to the consumer testing process under this paragraph. The results of consumer testing under paragraph
(2)shall be used in the development of the finalized standard financial aid offer required under subsection (f)(2). Not later than 3 months after the date on which the consumer testing under paragraph
(2)concludes, the Secretary 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 added, modified, or moved any additional items to the standard financial aid offer pursuant to subsection (b)(6). The Secretary may modify or remove 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 form, or in subsequent consumer testing. The Secretary may also recommend additional changes to Congress. In this section, the term cost of attendance has the meaning given such term in section 472. Notwithstanding any other provision of law, each institution of higher education that receives Federal financial assistance under this Act shall— use the financial aid offer developed under this section in providing paper, mobile-optimized offers, or other electronic offers to all students who apply for aid and are accepted at the institution; and use the standard terminology and definitions developed by the Secretary under subsection (f)(1) for all communications from the institution related to financial aid offers. The requirements under this section shall take effect on the first date on which the Secretary releases the Free Application for Federal Student Aid for the applicable award year associated with that application, if such date occurs not less than 1 year after the Secretary of Education finalizes the standard terminology and form developed in accordance with this section. Notwithstanding any other provision of law, the Secretary shall not have the authority to prescribe regulations to carry out this section, including with respect to the definition of income share agreement or private education loan (as such term is defined in section 140(a) of the Truth in Lending Act ( 15 U.S.C. 1650(a) )). . Section 484 of the Higher Education Opportunity Act ( 20 U.S.C. 1092 note) is amended by adding at the end the following: The authority of the Secretary to carry out this section shall terminate on the date on which the standard form for financial aid offers under section 124 of the Higher Education Act of 1965 ( 20 U.S.C. 1001 et seq. ) is released. .
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