Federal

College Cost Transparency and Student Protection Act

Source: Congress.gov · 3,883 words in original text

What This Bill Does

This bill requires the Secretary of Education to publish rules for how colleges must present financial aid offers to students. Colleges participating in federal student aid programs must follow these rules when showing aid packages to students who apply for help paying for college. The bill also requires colleges to include specific information in their offers to help students understand their true out-of-pocket costs.

Who It Affects

Colleges and universities that participate in federal student aid programs; enrolled students applying for financial aid; prospective students accepted for enrollment who apply for financial aid; the Secretary of Education; the Department of Education.

Key Provisions

- Colleges must provide financial aid offers that follow requirements published by the Secretary and include specific required information, with the ability to add supplementary details using standardized terms. (Sec. 2, para. 1) - The Secretary must publish requirements for financial aid offers within 18 months that establish standardized terms and definitions, content requirements, and formatting rules that prohibit loans from appearing to reduce costs owed or out-of-pocket expenses. (Sec. 2, para. 2) - Financial aid offers must separate direct costs (tuition, fees, and required expenses) from indirect costs (housing, food, books, transportation, and personal expenses) and show grants and scholarships separately from loans. (Sec. 2, para. 3) - Students must see financing options in plain language in this order: cash or personal resources, federal student loans, work-study employment and campus jobs. (Sec. 2, para. 3(B)(iv)) - Offers must include statistics on median earnings and median loan payments for graduates of the student's program, with a note that these statistics may not apply to the individual student. (Sec. 2, para. 3(D)(v))

What Changes

Colleges must change how they present financial aid to students. Instead of calling offers "award letters," they must follow specific government rules about what information to include and how to organize it. Students will see clearer separation between costs they must pay directly to the college versus costs for living expenses. Loans will no longer appear alongside grants in ways that might make loans look like free money. Students will learn what their actual out-of-pocket costs are before being asked to accept loans for living expenses. College websites and the College Scorecard website must separate direct and indirect cost information.

Important Definitions

- **Direct costs**: Tuition, fees, and any other required expenses as determined by the college. (Sec. 2, para. 6(B)) - **Indirect costs**: Components of cost of attendance other than direct costs, which may include housing and food, books and supplies, transportation, and miscellaneous personal expenses. (Sec. 2, para. 6(E)) - **Cost of attendance**: Not specified in bill text - **English learner**: Has the meaning given in section 8101(20) of the Elementary and Secondary Education Act of 1965, excluding certain individuals. (Sec. 2, para. 6(C)) - **First generation college student**: Has the meaning given in section 402A(h). (Sec. 2, para. 6(D)) - **Low-income student**: Has the meaning given in section 419N(b)(7). (Sec. 2, para. 6(F)) - **Minority-serving institution**: An institution of higher education described in section 371(a). (Sec. 2, para. 6(G))

Effective Date

Colleges must begin providing financial aid offers following the Secretary's requirements starting with the first award year that begins at least one year after the Secretary publishes the requirements. The Secretary must publish requirements no later than 18 months after the bill becomes law. (Sec. 2, para. 1 and 2)

I 118TH CONGRESS 1ST SESSION H. R. 1311 To amend the Higher Education Act of 1965 to direct the Secretary of Education to publish requirements for financial aid offers to be provided by institutions of higher education to enrolled and prospective students, and for other purposes. IN THE HOUSE OF REPRESENTATIVES MARCH 1, 2023 Mrs. MCCLAIN (for herself and Ms. FOXX) introduced the following bill; which was referred to the Committee on Education and the Workforce A BILL To amend the Higher Education Act of 1965 to direct the Secretary of Education to publish requirements for finan- cial aid offers to be provided by institutions of higher education to enrolled and prospective students, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘College Cost Trans- 4 parency and Student Protection Act’’. 5 VerDate Sep 11 2014 03:18 Mar 17, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H1311.IH H1311 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 1311 IH SEC. 2. FINANCIAL AID OFFERS. 1 Section 485 of the Higher Education Act of 1965 (20 2 U.S.C. 1092) is amended by adding at the end the fol- 3 lowing: 4 ‘‘(n) FINANCIAL AID OFFERS.— 5 ‘‘(1) INSTITUTIONAL REQUIREMENTS.—Begin- 6 ning with the first award year that begins not less 7 than 1 year after the Secretary publishes require- 8 ments under subparagraph (2), each institution of 9 higher education participating in any program under 10 this title shall provide to each enrolled student (and 11 prospective student accepted for enrollment) at such 12 institution who applies for financial assistance under 13 this title, a financial aid offer that— 14 ‘‘(A) shall comply with the requirements 15 published by the Secretary under paragraph 16 (2); and 17 ‘‘(B) may be supplemented by the institu- 18 tion with additional, non-contradictory informa- 19 tion related to financial aid as long as such sup- 20 plementary information uses the standardized 21 terms and definitions described in paragraph 22 (2). 23 ‘‘(2) SECRETARIAL REQUIREMENTS.—Not later 24 than 18 months after the date of enactment of the 25 College Cost Transparency and Student Protection 26 VerDate Sep 11 2014 03:18 Mar 17, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1311.IH H1311 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 1311 IH Act, the Secretary shall, based on the consumer test- 1 ing conducted under paragraph (4), publish require- 2 ments for financial aid offers to be used by institu- 3 tions of higher education under paragraph (1), 4 which shall— 5 ‘‘(A) serve as the primary source for Fed- 6 eral, State, and institutional financial aid infor- 7 mation provided by an institution of higher edu- 8 cation participating in any program under this 9 title to each enrolled student (and prospective 10 student accepted for enrollment) at such insti- 11 tution; 12 ‘‘(B) include a requirement that no finan- 13 cial aid offer may be referred to as an award 14 letter; 15 ‘‘(C) include the required content described 16 in paragraph (3); 17 ‘‘(D) establish standardized terms and 18 definitions, including for the required content 19 described in paragraph (3), which shall be in- 20 cluded in each financial aid offer; and 21 ‘‘(E) establish formatting requirements 22 with respect to the organization of the contents 23 described in paragraph (3), which— 24 ‘‘(i) shall include— 25 VerDate Sep 11 2014 03:18 Mar 17, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H1311.IH H1311 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 1311 IH ‘‘(I) a requirement that prohibits 1 any such offer from displaying loans 2 in a manner that indicates or implies 3 that such loans reduce the amount 4 owed to the institution or reduce the 5 out-of-pocket costs; and 6 ‘‘(II) requirements that ensure 7 that before completing the component 8 of an offer relating to indirect costs, 9 a student completes the component of 10 an offer relating to direct costs and 11 confirms that such student is seeking 12 financial assistance for indirect costs; 13 and 14 ‘‘(ii) may not establish, or require 15 that institutions of higher education use, a 16 uniform format for such offers. 17 ‘‘(3) REQUIRED CONTENT FOR A FINANCIAL 18 AID OFFER.— 19 ‘‘(A) IN GENERAL.—An institution of high- 20 er education shall provide, to each enrolled stu- 21 dent (and prospective student accepted for en- 22 rollment) at such institution who applies for fi- 23 nancial assistance under this title, a financial 24 VerDate Sep 11 2014 03:18 Mar 17, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H1311.IH H1311 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 1311 IH aid offer for an academic period covered by 1 such offer, which shall include the following: 2 ‘‘(i) A component relating to the di- 3 rect costs for such student for such aca- 4 demic period, which shall include the con- 5 tent described in subparagraphs (B) and 6 (D). 7 ‘‘(ii) In a case in which the student 8 completes the component described in 9 clause (i) and confirms that such student 10 is seeking financial assistance for indirect 11 costs for such academic period, a compo- 12 nent relating to such indirect costs, which 13 shall include the content described in sub- 14 paragraphs (C) and (D). 15 ‘‘(B) COMPONENT FOR DIRECT COSTS.— 16 The component of a financial aid offer relating 17 to direct costs shall include the following con- 18 tent: 19 ‘‘(i) ESTIMATED SUM OF DIRECT 20 COSTS.—The estimated sum of the stu- 21 dent’s direct costs for the academic period 22 covered by such offer, which shall be the 23 sum of— 24 VerDate Sep 11 2014 03:18 Mar 17, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H1311.IH H1311 kjohnson on DSK79L0C42PROD with BILLS 6 •HR 1311 IH ‘‘(I) the cost of tuition and fees, 1 as defined in section 472(a)(1), as 2 amended by section 702 of the 3 FAFSA Simplification Act; and 4 ‘‘(II) any other required ex- 5 penses, as determined by the institu- 6 tion and presented as an itemized list. 7 ‘‘(ii) GRANTS AND SCHOLARSHIPS.— 8 ‘‘(I) IN GENERAL.—The aggre- 9 gate amount of grants and scholar- 10 ships by source that the student does 11 not have to repay, such as grant aid 12 offered under this title and grant aid 13 offered through other Federal pro- 14 grams, grant aid offered by the insti- 15 tution, grant aid offered by the State, 16 and, if known, grant aid from an out- 17 side source for such academic period. 18 ‘‘(II) FEDERAL GRANT AID.— 19 With respect to Federal grant aid, the 20 conditions under which the student 21 can expect to receive similar amounts 22 of such Federal grant aid for each 23 academic period the student is en- 24 rolled at the institution. 25 VerDate Sep 11 2014 03:18 Mar 17, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H1311.IH H1311 kjohnson on DSK79L0C42PROD with BILLS 7 •HR 1311 IH ‘‘(III) INSTITUTIONAL GRANT 1 AID.—With respect to institutional 2 grant aid— 3 ‘‘(aa) the conditions under 4 which the student can expect to 5 receive similar amounts of such 6 institutional grant aid for each 7 academic period the student is 8 enrolled at the institution; and 9 ‘‘(bb) whether the institu- 10 tional grant aid offer may change 11 if grants or scholarships from 12 outside sources are applied after 13 the student receives the financial 14 aid offer, and, if applicable, how 15 that institutional grant aid will 16 change. 17 ‘‘(IV) INDIRECT COSTS.—An 18 identification of any grants or scholar- 19 ships described in subclause (I) that 20 are required to be used for any indi- 21 rect costs selected by the student 22 under subparagraph (C)(i). 23 ‘‘(iii) OUT-OF-POCKET COSTS (RELAT- 24 ING TO DIRECT COSTS).—The out-of-pocket 25 VerDate Sep 11 2014 03:18 Mar 17, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H1311.IH H1311 kjohnson on DSK79L0C42PROD with BILLS 8 •HR 1311 IH costs (relating to direct costs) that the stu- 1 dent, or the student’s family on behalf of 2 the student, is estimated to have to pay for 3 the student to attend the institution for 4 such academic period, equal to— 5 ‘‘(I) the estimated sum of the 6 student’s direct costs described in 7 clause (i); minus 8 ‘‘(II) the aggregate amount of 9 grants and scholarships described in 10 clause (ii) that may be used to cover 11 such direct costs. 12 ‘‘(iv) FINANCING OPTIONS.— 13 ‘‘(I) IN GENERAL.—In plain lan- 14 guage and based on consumer testing 15 under paragraph (4), the offer shall 16 include the following financing options 17 (in the following order) to cover the 18 total out-of-pocket costs determined 19 under clause (iii): 20 ‘‘(aa) Cash or other personal 21 resources, including the expected 22 family contribution of the stu- 23 dent. 24 VerDate Sep 11 2014 03:18 Mar 17, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H1311.IH H1311 kjohnson on DSK79L0C42PROD with BILLS 9 •HR 1311 IH ‘‘(bb) Loans made to the 1 student under part D (excluding 2 Federal Direct PLUS Loans), 3 which shall— 4 ‘‘(AA) clearly label 5 whether the loan is sub- 6 sidized or unsubsidized; and 7 ‘‘(BB) require the stu- 8 dent to (1) accept any such 9 loan by specifying the loan 10 amount the student is ac- 11 cepting (which may be an 12 amount that is less than the 13 maximum amount for which 14 such student is eligible 15 under part D) or (2) decline 16 any such loan. 17 ‘‘(cc) Work-study employ- 18 ment opportunities, offered in ac- 19 cordance with part C, and other 20 campus employment, if applica- 21 ble, which shall require the stu- 22 dent to (1) accept any such op- 23 portunity or (2) decline any such 24 opportunity. 25 VerDate Sep 11 2014 03:18 Mar 17, 2023 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H1311.IH H1311 kjohnson on DSK79L0C42PROD with BILLS 10 •HR 1311 IH ‘‘(II) DISCLOSURES RELATED TO 1 COVERED FINANCING OPTIONS.—The 2 following disclosures, in a simple, 3 plain-language, and consumer-friendly 4 manner (based on the consumer test- 5 ing under paragraph (4)): 6 ‘‘(aa) GRANTS AND SCHOL- 7 ARSHIPS.—Grants and scholar- 8 ships do not have to be repaid. 9 ‘‘(bb) ALL LOANS.—All 10 loans must be repaid with inter- 11 est. 12 ‘‘(cc) FEDERAL WORK- 13 STUDY AID.—Any work-study 14 employment opportunity offered 15 under part C is subject to the 16 availability of qualified employ- 17 ment opportunities and is dis- 18 bursed over time as earned by 19 the student. 20 ‘‘(III) DISCLOSURE RELATED TO 21 OTHER FINANCING OPTIONS.—A dis- 22 closure that other financing options 23 (not listed in subclause (I)) may be 24 available, including private education 25 VerDate Sep 11 2014 03:18 Mar 17, 2023 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H1311.IH H1311 kjohnson on DSK79L0C42PROD with BILLS 11 •HR 1311 IH loans, Federal Direct PLUS loans, or 1 institutional or State loans, if applica- 2 ble. 3 ‘‘(IV) TUITION PAYMENT 4 PLANS.—In plain language, the offer 5 shall include information on tuition 6 payment plans, if applicable. 7 ‘‘(v) DISCLOSURE AND CONFIRMATION 8 RELATING TO INDIRECT COSTS.—A disclo- 9 sure that the financing options for indirect 10 costs selected by the student under sub- 11 paragraph (C)(i) may include loans that 12 must be repaid with interest, and a re- 13 quirement for the student to confirm 14 whether the student is seeking financial as- 15 sistance for such indirect costs. 16 ‘‘(C) COMPONENT FOR INDIRECT COSTS.— 17 The component of a financial aid relating to in- 18 direct costs shall include the following content: 19 ‘‘(i) SELECTION OF INDIRECT 20 COSTS.—The student shall have the ability 21 to select each component of the cost of at- 22 tendance under section 472, as amended 23 by section 702 of the FAFSA Simplifica- 24 tion Act (other than the direct costs deter- 25 VerDate Sep 11 2014 03:18 Mar 17, 2023 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H1311.IH H1311 kjohnson on DSK79L0C42PROD with BILLS 12 •HR 1311 IH mined under subparagraph (B)(i)) for 1 which the student needs support for the 2 academic period covered by the offer, 3 which may include components relating to 4 housing and food, books and supplies, 5 transportation, and miscellaneous personal 6 expenses. 7 ‘‘(ii) ESTIMATED SUM OF INDIRECT 8 COSTS.—The estimated sum of the stu- 9 dent’s indirect costs for the academic pe- 10 riod covered by such offer, as determined 11 by the sum of each of the components of 12 indirect costs selected under clause (i). 13 ‘‘(iii) GRANTS AND SCHOLARSHIPS.— 14 Any amounts of the grants and scholar- 15 ships identified under subparagraph 16 (B)(ii), which— 17 ‘‘(I) remain available after fi- 18 nancing the direct costs determined 19 under subparagraph (B)(i); or 20 ‘‘(II) are required to be used for 21 indirect costs, as described in sub- 22 clause (II) of subparagraph (B)(ii). 23 ‘‘(iv) OUT-OF-POCKET COSTS (RELAT- 24 ING TO INDIRECT COSTS).—The out-of- 25 VerDate Sep 11 2014 03:18 Mar 17, 2023 Jkt 039200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H1311.IH H1311 kjohnson on DSK79L0C42PROD with BILLS 13 •HR 1311 IH pocket costs (relating to indirect costs) 1 that the student, or the student’s family on 2 behalf of the student, is estimated to have 3 to pay for the student to attend the insti- 4 tution for such academic period, equal to— 5 ‘‘(I) the estimated sum of indi- 6 rect costs determined under clause 7 (ii); minus 8 ‘‘(II) the amount of grants and 9 scholarships determined under clause 10 (iii). 11 ‘‘(v) TOTAL COST OF ATTENDANCE.— 12 The total cost of attendance for the stu- 13 dent, equal to the sum of— 14 ‘‘(I) the estimated sum of the 15 student’s direct costs determined sub- 16 paragraph (B)(i); and 17 ‘‘(II) the estimated sum of the 18 student’s indirect costs determined 19 under clause (ii). 20 ‘‘(vi) TOTAL OUT-OF-POCKET 21 COSTS.—The total out-of-pocket costs that 22 the student, or the student’s family on be- 23 half of the student, is estimated to have to 24 pay for the student to attend the institu- 25 VerDate Sep 11 2014 03:18 Mar 17, 2023 Jkt 039200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\H1311.IH H1311 kjohnson on DSK79L0C42PROD with BILLS 14 •HR 1311 IH tion for such academic period, equal to the 1 sum of— 2 ‘‘(I) the out-of-pocket costs (re- 3 lating to direct costs) determined 4 under subparagraph (B)(iii); and 5 ‘‘(II) the out-of-pocket costs (re- 6 lating to indirect costs) determined 7 under clause (iv). 8 ‘‘(vii) FINANCING OPTIONS.—In plain 9 language, the offer shall include— 10 ‘‘(I) each of the financing options 11 listed under subparagraph (B)(iv)(I), 12 which remain available after financing 13 the d [Text truncated for display. Full text available on Congress.gov.]

Important: This plain English summary was generated by AI and is provided for informational purposes only. It is not legal advice. Always consult the official bill text on Congress.gov or a qualified attorney for legal matters.