[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 528 Introduced in Senate (IS)]

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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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