[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 4435 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
2d Session
S. 4435
To establish requirements for financial aid offers made by institutions
of higher education, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
April 29, 2026
Mr. Cassidy (for himself and Mr. Grassley) introduced the following
bill; which was read twice and referred to the Committee on Health,
Education, Labor, and Pensions
_______________________________________________________________________
A BILL
To establish requirements for financial aid offers made by institutions
of higher education, 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 ``Improving Financial Aid Offers for
Students Act''.
SEC. 2. FINANCIAL AID OFFER REQUIREMENTS.
Section 484 of the Higher Education Opportunity Act (20 U.S.C. 1092
note) is amended to read as follows:
``SEC. 484. FINANCIAL AID OFFER REQUIREMENTS.
``(a) Financial Aid Offer.--In this section, the term `financial
aid offer' means a document or electronic notification that is provided
or made available by a postsecondary educational institution to a
student (or prospective student) that outlines the amounts and details
of the financial aid being offered to the student (or prospective
student), which may include scholarships, grants, loans, employment, or
other forms of financial assistance, to pay for expenses related to
attending the institution.
``(b) Standard Terminology and Model Form.--The Secretary of
Education, in consultation with the heads of relevant Federal agencies
and in accordance with subsections (g) and (h), shall develop standard
terminology and a model form for financial aid offers based on
recommendations from representatives of students, veterans,
servicemembers, students' families, institutions of higher education
(including 2-year public institutions, 2-year private nonprofit
institutions, for-profit institutions, 4-year public institutions, and
4-year private nonprofit institutions), higher education associations,
financial aid experts, financial aid administrators, secondary school
and postsecondary counselors, college access professionals, nonprofit
organizations, and consumer groups. Such model form shall meet the
requirements of subsections (c) and (d) and use the standard
terminology developed pursuant to subsection (g)(1).
``(c) Key Required Contents for Aid Offer.--An institution of
higher education receiving Federal financial assistance under the
Higher Education Act of 1965 (20 U.S.C. 1001 et seq.) shall use a
financial aid offer that includes the following items in a consumer-
friendly manner that is simple and understandable, with costs listed
first, followed by grants and scholarships, and with each of the
following categories of information clearly separated from each other
with separate headings:
``(1) Cost information.--
``(A) In general.--Information on the student's
estimated cost of attendance, including the following:
``(i) Direct costs.--The total cost of all
items described in section 472 of the Higher
Education Act of 1965 (20 U.S.C. 1087ll) 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--
``(I) tuition and fees (and other
required expenses); and
``(II) housing and food for a
student participating in
institutionally owned or operated food
services or institutionally owned or
operated housing.
``(ii) Indirect costs.--The total cost of
all items described in section 472 of the
Higher Education Act of 1965 (20 U.S.C. 1087ll)
that are not 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--
``(I) the component totals each for
housing and food costs for students who
reside off campus or off campus with
family;
``(II) books, supplies, equipment,
course materials, and rental or
purchase of a personal computer (if
such expenses are not charged with
tuition and fees); and
``(III) transportation.
``(B) Academic period.--The academic period covered
by the financial aid offer, and an explanation that the
amount of financial aid offered may change--
``(i) for academic periods not covered by
the financial aid offer; or
``(ii) by program.
``(C) Enrollment status.--An indication of whether
cost and aid estimates are based on full-time or part-
time enrollment.
``(D) Estimated or set.--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, differentiated 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 and scholarship aid offered by the institution, grant and
scholarship aid offered by the State, and, if known, grant and
scholarship 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 financial aid offer and, to the
extent practicable, how that aid may change.
``(3) Net price.--
``(A) In general.--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 and scholarship
aid described in paragraph (2) that is included
in the financial aid offer.
``(B) Disclosure.--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) In general.--Information on any loan under
part D of title IV of the Higher Education Act of 1965
(20 U.S.C. 1087a 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 financial aid 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) Disclosure on repayment.--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) Disclosure on interest rates and fees.--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) Link to repayment calculator.--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, adjusting, or declining aid
and next steps.--
``(A) In general.--The deadlines and a summary of
the process (including the next steps) for--
``(i) accepting the financial aid offered;
``(ii) adjusting the amount of financial
aid offered; and
``(iii) declining the financial aid
offered.
``(B) Information on paying costs.--Information on
when and how costs described in paragraph (1)(A)(i)
must be paid, including a clear indication of whether
such cost is required or optional for the student.
``(C) Disclosure on verification of information.--A
disclosure that verification of information provided on
the Free Application for Federal Student Aid, or other
applicable financial aid applications, may require the
student to submit further documentation.
``(D) Contact information.--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.
``(d) Optional Contents for Financial Aid Offer.--A financial aid
offer made by an institution of higher education receiving Federal
financial assistance under the Higher Education Act of 1965 (20 U.S.C.
1001 et seq.) may include, at the institution's discretion, the
information described in paragraphs (1), (2), or (3). If an institution
does include information described in paragraph (1), (2), or (3), such
information shall meet the requirements of the applicable paragraphs.
``(1) Additional options.--Any of the following, which, if
included, shall comply with the requirements of this paragraph:
``(A) Additional options and potential resources
for paying for the amount listed in subsection (c)(3),
such as tuition payment plans and the terms and
conditions of those plans.
``(B) A disclosure that Federal Direct PLUS Loans
made under part D of title IV of the Higher Education
Act of 1965 (20 U.S.C. 1087a et seq.), private
education loans, or other financing products may be
available to cover remaining need, except that--
``(i) the institution may not include an
amount for such Federal Direct PLUS Loans,
private education loans, or other financing
products, except as part of a revised or
updated offer provided after such loan or
financing product has been requested by the
student or parent and approved or certified;
``(ii) if a Federal Direct PLUS Loan,
private education loan, or other financing
product amount is included in accordance with
clause (i), the institution shall not represent
the amount of such a loan or financing product
in a manner in which that amount is commingled
with the amount of other forms of financial
assistance, such as those described in
paragraphs (2) and (4) of subsection (c); and
``(iii) the institution shall include a
disclosure that such loans and agreements--
``(I) are subject to an additional
application process and have to be
repaid by the borrower; and
``(II) may not be eligible for all
the benefits available for Federal
Direct Stafford Loans or Federal Direct
Unsubsidized Stafford Loans.
``(C) Information about the net bill, which--
``(i) is defined as the amount the student,
or the student's family on behalf of the
student, is estimated to have to pay directly
to the institution for the academic period,
equal to--
``(I) the direct costs of attending
the covered institution as described in
subsection (c)(1)(A)(i); minus
``(II) the amount of grant and
scholarship aid described in subsection
(c)(2) that is included in the
financial aid offer; and
``(ii) shall include a clear explanation of
how this net bill amount differs from the net
price amount described in subsection (c)(3).
``(2) Information on private education loans and other
financing products.--Information relating to private education
loans and other financing products, which, if included, shall
contain the following:
``(A) A disclosure that students considering
borrowing to cover the cost of attendance should
consider available Federal student loans and compare
the terms and repayment options prior to accepting
private education loans or other financing products,
including an explanation that Federal student loans
generally offer more flexible repayment and forgiveness
options than private education loans and other
financing products.
``(B) The impact of a proposed private education
loan or other financing product 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 or other
financing product provider of the student's choice.
``(3) Student employment.--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.), institutional work-study programs, or State work-
study programs, which, if included shall contain the following:
``(A) The maximum annual amount the student may
earn through the program.
``(B) A disclosure that any work-study amount
offered may be--
``(i) subject to the availability of
qualified employment opportunities upon the
student's enrollment; and
``(ii) disbursed over time as earned by the
student.
``(e) Additional Requirements for Financial Aid Offers.--Each
financial aid offer made by an institution of higher education
receiving Federal financial assistance under the Higher Education Act
of 1965 (20 U.S.C. 1001 et seq.) shall meet the following requirements:
``(1) The financial aid offer shall include, in addition to
the requirements described in subsection (c), a concise
summary, in plain language, of--
``(A) the terms and conditions of financial aid
recommended under paragraphs (2) and (4) of subsection
(c) (and subsection (d)(3), if included), 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) The financial aid offer shall clearly distinguish
between the aid offered under subsection (c)(2), subsection
(c)(4), and subsection (d)(3) (if included), 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) The financial aid offer shall use standard
terminology and definitions, as described in subsection (g)(1)
and use plain language where possible.
``(4) If an institution's recommended Federal student loan
aid offered in subsection (c)(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 web page.
``(5) The financial aid offer shall include the
standardized statement regarding the possible availability of
Federal education benefits, as established by the Secretary in
accordance with subsection (g)(2).
``(6) With respect to dependent students, any reference to
private education loans in the financial aid offer shall be
accompanied by--
``(A) information about the availability of, and
terms and conditions associated with, Federal Direct
PLUS Loans under part D of title IV of the Higher
Education Act of 1965 (20 U.S.C. 1087a et seq.) for the
student's parents regardless of family income; and
``(B) a notification of the student's increased
eligibility for Federal student loans under part D of
such title if the student's parents are not able to
borrow under the Federal Direct PLUS Loan program under
part D of such title.
``(7) The financial aid offer shall include an explanation
of how the indirect costs included in the financial aid offer
pursuant to subsection (c)(1)(A)(ii) are estimated, and a
disclosure that the student's actual costs for these items may
differ from the estimated costs.
``(8) The financial aid offer shall not include any net
price information except cost of attendance information in
accordance with subsection (c)(1), net price information in
accordance with subsection (c)(3), or (as applicable) net bill
information in accordance with subsection (d)(1)(C).
``(9) The financial aid offer shall not be titled or
otherwise referred to as an `award'.
``(f) Supplemental Information; Removal of Information.--
``(1) Supplemental information.--Nothing in this section
shall preclude an institution of higher education receiving
Federal financial assistance under the Higher Education Act of
1965 (20 U.S.C. 1001 et seq.) from supplementing the financial
aid offer with additional information if such additional
information utilizes the same standard terminology identified
in subsection (g)(1) and does not misrepresent costs, financial
aid offered, or net price.
``(2) Removal of information.--Nothing in this section
shall preclude an institution from deleting a required item on
a financial aid offer if--
``(A) the student is ineligible for such item;
``(B) the institution does not participate in the
program related to such item; or
``(C) the cost of attendance item is not applicable
to the student.
``(g) Standard Terminology and Definitions; Additional Benefits.--
``(1) Standard terminology and definitions.--Not later than
9 months after the date of enactment of the Improving Financial
Aid Offers for Students Act, 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, and the individuals and
entities described in subsection (b), shall establish standard
terminology and definitions for the terms described in
subsections (c) and (d).
``(2) 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.
``(3) Authority to modify.--The Secretary of Education may
modify the standard terminology and definitions for the terms
described in subsections (c) and (d) if such modifications are
made after consultation with the individuals and entities
described in subsection (b) and are issued not less than 12
months before the Free Application for Federal Student Aid for
the affected award year first becomes available.
``(h) Development of Model Financial Aid Offer Form.--
``(1) Model 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 model financial aid
offer form, in accordance with the process established
under this subsection and the requirements of this
section.
``(B) Separate financial aid offer forms.--The
Secretary may develop separate model financial aid
offer forms for--
``(i) undergraduate students and graduate
students; and
``(ii) first-time students and returning
students.
``(2) Draft model form.--Not later than 1 year after the
date of enactment of the Improving Financial Aid Offers for
Students Act, 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, and the individuals and entities described
in subsection (b), shall design and produce multiple draft
financial aid offer forms for consumer testing with
postsecondary students or prospective students. In developing
those forms, the Secretary shall ensure--
``(A) that the headings described in paragraphs (1)
through (4) of subsection (c) are in the same font,
appear in the same order, and are 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 (c) appears in a standard format and design
on the financial aid offer; and
``(C) that the institution may include a logo or
brand alongside the title of the financial aid offer.
``(3) Consumer testing.--
``(A) In general.--Not later than 1 year after the
date of enactment of the Improving Financial Aid Offers
for Students Act, the Secretary of Education, in
consultation with the heads of relevant Federal
agencies, shall establish a process for consumer
testing of the draft model forms developed under
paragraph (2) 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 may conduct a pilot in which eligible
institutions, on a voluntary basis, use the draft forms
developed under paragraph (2).
``(C) Length of consumer testing.--The Secretary of
Education shall ensure that the consumer testing under
this paragraph lasts no longer than 1 year after the
process for consumer testing is developed under
subparagraph (A).
``(4) Final model form.--
``(A) In general.--The results of consumer testing
under paragraph (3) shall be used in the final
development of the model financial aid offer form.
``(B) Reporting requirement.--Not later than 3
months after the date the consumer testing under
paragraph (3) concludes, the Secretary of Education
shall submit to Congress and publish on its website the
final model 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 model financial aid offer.
``(5) Authority to modify.--The Secretary of Education may
modify or remove the definitions, terms, formatting, or design
of the model financial aid offer form based on the results of
consumer testing required under this subsection and before
finalizing the model form, or in subsequent consumer testing.
The Secretary may also recommend additional changes to
Congress.''.
SEC. 3. MANDATORY USE OF TERMS; FINANCIAL AID OFFER FORM REQUIREMENTS.
(a) In General.--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 TERMS.
``(a) In General.--Notwithstanding any other provision of law, each
institution of higher education that receives Federal financial
assistance under this Act shall use the standard terminology and
definitions developed by the Secretary of Education under subsection
(g)(1) of section 484 of the Higher Education Opportunity Act (20
U.S.C. 1092 note) for all communications from the institution related
to financial aid offers (as defined in subsection (a) of such section),
regardless of whether such communications are electronic, written, or
through another medium.
``(b) Effective Date.--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, that occurs later than 1 year after
the Secretary of Education finalizes the standard terminology and model
form developed in accordance with section 484 of the Higher Education
Opportunity Act (20 U.S.C. 1092 note).
``(c) Administrative Procedures.--Section 492 shall not apply with
respect to regulations promulgated in accordance with this section.
``SEC. 125. REQUIREMENTS FOR FINANCIAL AID OFFER FORMS.
``(a) In General.--Beginning on July 1 following the effective date
of section 124, and annually thereafter, each institution of higher
education that receives Federal financial assistance under this Act
shall submit to the Secretary a template of the form (without any
student data) that the institution uses for financial aid offers (as
defined in section 484(a) of the Higher Education Opportunity Act) to
enrolled and prospective students. Institutions that use electronic
systems to communicate financial aid offers may submit digital
representations (such as screenshots) of those systems.
``(b) Forms.--Such institutions shall--
``(1) use the model financial aid offer form developed
pursuant to section 484(h) of the Higher Education Opportunity
Act (20 U.S.C. 1092 note); or
``(2) use the institution's own form for financial aid
offers if that form meets the requirements of subsections (c),
(d), and (e) of such section and uses the required terminology
and definitions in accordance with section 124.
``(c) Public Availability.--The Secretary shall make each template
received under this section publicly available.''.
(b) Financial Aid Offer Compliance.--Section 485(a) of the Higher
Education Act of 1965 (20 U.S.C. 1092(a)) is amended by adding at the
end the following:
``(8) Each eligible institution participating in any
program under this title shall ensure that any financial aid
offer (as defined in section 484(a) of the Higher Education
Opportunity Act) communicated to a prospective or enrolled
student complies with the requirements of sections 124 and
125.''.
SEC. 4. GAO STUDY.
Not later than 1 year after the date on which the financial aid
offer form templates of institutions of higher education are submitted
to the Secretary of Education in accordance with section 125 of the
Higher Education Act of 1965, as added by section 3 of this Act, the
Comptroller General of the United States shall prepare and submit to
Congress, and make publicly available, an initial study of such
financial aid offer form templates, and 3 years after the initial study
is submitted to Congress, the Comptroller General shall submit a final
study examining such templates. Both studies shall include
recommendations about how to improve such templates, as appropriate.
Additional studies of such financial aid offer form templates may be
conducted, as determined necessary by the Comptroller General or the
Chair or Ranking Member of the Committee on Health, Education, Labor,
and Pensions of the Senate or the Committee on Education and Workforce
of the House of Representatives.
SEC. 5. RULES OF CONSTRUCTION.
(a) No Authorization for Approval or Mandated Forms.--Nothing in
this Act, or the amendments made by this Act, shall be construed to
authorize the Secretary of Education to--
(1) require that a postsecondary educational institution
receive approval from the Department of Education, or any other
Federal agency, for the institution's financial aid offer; or
(2) regulate or require a mandated standard financial aid
offer.
(b) Additional Resources.--Any requirements in this Act, and the
amendments made by this Act, for a financial aid offer to contain
certain information may be satisfied through the inclusion of specific
and relevant website links or additional resources that contain such
information, provided that the dollar amounts of direct and indirect
costs (as described in paragraph (1) of subsection (c) of section 484
of the Higher Education Opportunity Act (20 U.S.C. 1092 note)), grants
and scholarships (as described in paragraph (2) of such subsection),
and net price (as described in paragraph (3) of such subsection) are
stated in the financial aid offer.
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