Understanding the True Cost of College Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 2321 To require a standard financial aid offer form, and for other purposes. IN THE HOUSE OF REPRESENTATIVES APRIL 12, 2019 Mr. VAN DREW introduced the following bill; which was referred to the Committee on Education and Labor A BILL To require a standard financial aid offer form, 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 ‘‘Understanding the 4 True Cost of College Act of 2019’’. 5 SEC. 2. INSTITUTION FINANCIAL AID OFFER FORM. 6 Section 484 of the Higher Education Opportunity 7 Act (20 U.S.C. 1092 note) is amended to read as follows: 8 ‘‘SEC. 484. INSTITUTION FINANCIAL AID OFFER FORM. 9 ‘‘(a) STANDARD FORMAT AND TERMINOLOGY.—The 10 Secretary of Education, in consultation with the heads of 11 VerDate Sep 11 2014 23:35 Apr 23, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2321.IH H2321 pamtmann on DSKBFK8HB2PROD with BILLS 2 •HR 2321 IH relevant Federal agencies, shall develop standard termi- 1 nology and a standard format for financial aid offer forms 2 based on recommendations from representatives of stu- 3 dents, veterans, servicemembers, students’ families, insti- 4 tutions of higher education (including community colleges, 5 for-profit institutions, four-year public institutions, and 6 four-year private nonprofit institutions), financial aid ex- 7 perts, secondary school and postsecondary counselors, 8 nonprofit organizations, and consumer groups. 9 ‘‘(b) KEY REQUIRED CONTENTS FOR OFFER 10 FORM.—The standard format developed under subsection 11 (a) shall include, in a consumer-friendly manner that is 12 simple and understandable, a form titled ‘Financial Aid 13 Offer’, which shall include the following items clearly sepa- 14 rated from each other with separate headings, and, if in 15 paper format, listed on the first page of the financial aid 16 offer form: 17 ‘‘(1) COST INFORMATION.— 18 ‘‘(A) Information on the student’s esti- 19 mated cost of attendance, including the fol- 20 lowing: 21 ‘‘(i) Total direct costs, including the 22 component totals each for— 23 ‘‘(I) tuition and fees, as deter- 24 mined under section 472 of the High- 25 VerDate Sep 11 2014 21:44 Apr 24, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2321.IH H2321 pamtmann on DSKBFK8HB2PROD with BILLS 3 •HR 2321 IH er Education Act of 1965 (20 U.S.C. 1 1087ll); and 2 ‘‘(II) college-sponsored housing 3 and food costs (as determined based 4 on the costs for room and board 5 under such section). 6 ‘‘(ii) Total estimated other expenses, 7 including— 8 ‘‘(I) the component totals each 9 for housing and food costs for stu- 10 dents who reside off-campus; and 11 ‘‘(II) for all students, books, sup- 12 plies, transportation, and miscella- 13 neous personal expenses (which may 14 include costs of health insurance and 15 dependent care), as determined under 16 section 472 of the Higher Education 17 Act of 1965 (20 U.S.C. 1087ll). 18 ‘‘(B) An indication of the academic period 19 covered by the financial aid offer, and an expla- 20 nation that the financial aid offered may 21 change for academic periods not covered by the 22 aid offer. 23 VerDate Sep 11 2014 23:35 Apr 23, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2321.IH H2321 pamtmann on DSKBFK8HB2PROD with BILLS 4 •HR 2321 IH ‘‘(C) An indication of whether cost and aid 1 estimates are based on full-time or part-time 2 enrollment. 3 ‘‘(D) An indication, as applicable, about 4 whether the tuition and fees are estimated 5 based on the previous year, or are set, for the 6 academic period indicated in accordance with 7 subparagraph (B). 8 ‘‘(2) FINANCIAL AID.—The amount and source 9 of financial aid that the student does not have to 10 repay, such as scholarships, grant aid offered under 11 title IV of the Higher Education Act of 1965 (20 12 U.S.C. 1070 et seq.), grant aid offered through 13 other Federal programs, or grant aid offered by the 14 institution, a State, or, if known, an outside source 15 to the student for such academic period, including— 16 ‘‘(A) a disclosure that the financial aid 17 does not have to be repaid; and 18 ‘‘(B) if institutional aid is included— 19 ‘‘(i) the conditions under which the 20 student can expect to receive similar 21 amounts of such financial aid for each aca- 22 demic period the student is enrolled at the 23 institution; and 24 VerDate Sep 11 2014 23:35 Apr 23, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2321.IH H2321 pamtmann on DSKBFK8HB2PROD with BILLS 5 •HR 2321 IH ‘‘(ii) whether the institutional aid 1 offer may change if grants or scholarships 2 from outside sources are applied after the 3 student receives the offer form, and, if ap- 4 plicable, how that aid will change. 5 ‘‘(3) NET PRICE.— 6 ‘‘(A) The net price that the student, or the 7 student’s family on behalf of the student, is es- 8 timated to have to pay for the student to attend 9 the institution for such academic period, equal 10 to— 11 ‘‘(i) the cost of attendance as de- 12 scribed in paragraph (1)(A) for the stu- 13 dent for the period indicated in paragraph 14 (1)(B); minus 15 ‘‘(ii) the amount of grant aid de- 16 scribed in paragraph (2) that is included in 17 the financial aid offer form. 18 ‘‘(B) A disclosure that the net price is an 19 estimate of the total expenses for the year and 20 not equivalent to the amount the student will 21 owe directly to the institution. 22 ‘‘(4) WORK-STUDY.—Information on work- 23 study employment opportunities, offered in accord- 24 ance with part C of title IV of the Higher Education 25 VerDate Sep 11 2014 21:44 Apr 24, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2321.IH H2321 pamtmann on DSKBFK8HB2PROD with BILLS 6 •HR 2321 IH Act of 1965 (20 U.S.C. 1087–51 et seq.) including 1 a disclosure that the work-study aid offered is sub- 2 ject to the availability of qualified employment op- 3 portunities and is disbursed over time as earned by 4 the student. Work-study employment opportunities 5 (or a student’s potential income based on those op- 6 portunities) shall not be included in the category of 7 financial aid described under paragraph (2). 8 ‘‘(5) LOANS.— 9 ‘‘(A) Information on any loan under part 10 D or part E of title IV of the Higher Education 11 Act of 1965 (20 U.S.C. 1087a et seq.; 20 12 U.S.C. 1087aa et seq.) (except a Federal Direct 13 PLUS Loan under part D of that Act) that the 14 institution recommends for the student for the 15 academic period covered by the offer, which 16 shall be made— 17 ‘‘(i) with clear use of the word ‘loan’ 18 to describe the recommended loan 19 amounts; and 20 ‘‘(ii) with clear labeling of subsidized 21 and unsubsidized loans. 22 ‘‘(B) A disclosure that such loans have to 23 be repaid and a disclosure that the student can 24 VerDate Sep 11 2014 21:44 Apr 24, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2321.IH H2321 pamtmann on DSKBFK8HB2PROD with BILLS 7 •HR 2321 IH borrow a lesser or, if applicable, greater amount 1 than the recommended loan amount. 2 ‘‘(C) A disclosure that the interest rates 3 and fees on such loans are set annually and af- 4 fect total cost over time, and a link to a De- 5 partment of Education website that includes 6 current information on interest rates and fees. 7 ‘‘(D) A link to the Department of Edu- 8 cation’s repayment calculator website for stu- 9 dents with instruction that this website contains 10 customizable estimates of expected repayment 11 costs under different loan repayment plans. 12 ‘‘(6) PROCESS FOR ACCEPTING OR DECLINING 13 AID AND NEXT STEPS.— 14 ‘‘(A) The deadlines and a summary of the 15 process (including the next steps) for— 16 ‘‘(i) accepting the financial aid offered 17 in the financial aid offer form; 18 ‘‘(ii) requesting higher loan amounts 19 if recommended loan amounts were in- 20 cluded; and 21 ‘‘(iii) declining aid offered in the 22 form. 23 ‘‘(B) Information on when and how direct 24 costs to the institution must be paid. 25 VerDate Sep 11 2014 23:35 Apr 23, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2321.IH H2321 pamtmann on DSKBFK8HB2PROD with BILLS 8 •HR 2321 IH ‘‘(C) A disclosure that verification of finan- 1 cial circumstances may require the student to 2 submit of further documentation. 3 ‘‘(D) Information about where a student or 4 the student’s family can seek additional infor- 5 mation regarding the financial aid offered, in- 6 cluding contact information for the institution’s 7 financial aid office and the Department of Edu- 8 cation’s website on financial aid. 9 ‘‘(7) ADDITIONAL INFORMATION.—Any other 10 information the Secretary of Education, in consulta- 11 tion with the heads of relevant Federal agencies, in- 12 cluding the Secretary of the Treasury and the Direc- 13 tor of the Bureau of Consumer Financial Protection, 14 determines necessary (based on the results of the 15 consumer testing under paragraph (g)(2)) so that 16 students and parents can make informed loan bor- 17 rowing decisions, which may include— 18 ‘‘(A) the most recent cohort default rate, 19 as defined in section 435(m) of the Higher 20 Education Act of 1965 (20 U.S.C. 1085(m)) 21 with respect to an institution where more than 22 30 percent of enrolled students borrow loans to 23 pay for their education, and a comparison to 24 the national average cohort default rate; 25 VerDate Sep 11 2014 23:35 Apr 23, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2321.IH H2321 pamtmann on DSKBFK8HB2PROD with BILLS 9 •HR 2321 IH ‘‘(B) the percentage of students at the in- 1 stitution who borrow student loans; 2 ‘‘(C) the median loan debt at graduation 3 for students at the institution (clearly marked 4 as including only Federal loans if private loan 5 data are not available to be included); and 6 ‘‘(D) the estimated institutional charges 7 that the student, or the student’s family on be- 8 half of the student, will have to pay directly to 9 the institution for the student to attend the in- 10 stitution for the academic period described in 11 paragraph (1)(B), equal to— 12 ‘‘(i) the total direct costs as described 13 in paragraph (1)(A)(i) for the student for 14 the period indicated in paragraph (1)(B); 15 minus 16 ‘‘(ii) the amount of grant aid de- 17 scribed in paragraph (2) that is included 18 on the financial aid offer form. 19 ‘‘(c) OTHER REQUIRED CONTENTS FOR THE OFFER 20 FORM.—The standard form developed under subsection 21 (a) shall include, in addition to the information described 22 in subsection (b), the following information to be included 23 on the financial aid offer form in a concise format deter- 24 VerDate Sep 11 2014 23:35 Apr 23, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2321.IH H2321 pamtmann on DSKBFK8HB2PROD with BILLS 10 •HR 2321 IH mined by the Secretary of Education, in consultation with 1 the heads of relevant Federal agencies: 2 ‘‘(1) At the institution’s discretion— 3 ‘‘(A) additional options and potential re- 4 sources for paying for the amount listed in sub- 5 section (b)(3), such as tuition payment plans; 6 and 7 ‘‘(B) a disclosure that Federal Direct 8 PLUS Loans or private education loans may be 9 available to cover remaining need, except that 10 the institution may not include an amount for 11 Federal Direct PLUS Loans or private edu- 12 cation loans and must include a disclosure for 13 Federal Direct PLUS Loans that such loans 14 are subject to an additional application process, 15 have to be repaid by the borrower, and may not 16 be eligible for all the benefits available for Fed- 17 eral Direct Stafford Loans or Federal Direct 18 Unsubsidized Stafford Loans. 19 ‘‘(2) The following information relating to pri- 20 vate student loans: 21 ‘‘(A) A statement that students consid- 22 ering borrowing to cover the cost of attendance 23 should consider available Federal student loans 24 prior to applying for private education loans, in- 25 VerDate Sep 11 2014 23:35 Apr 23, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H2321.IH H2321 pamtmann on DSKBFK8HB2PROD with BILLS 11 •HR 2321 IH cluding an explanation that Federal student 1 loans offer generally more favorable terms and 2 beneficial repayment options than private loans. 3 ‘‘(B) The impact of a proposed private 4 education loan on the student’s potential eligi- 5 bility for other financial assistance, including 6 Federal financial assistance under title IV of 7 the Higher Education Act of 1965 (20 U.S.C. 8 1070 et seq.). 9 ‘‘(C) A statement explaining the student’s 10 ability to select a private educational lender of 11 the student’s choice. 12 ‘‘(d) ADDITIONAL REQUIREMENTS FOR FINANCIAL 13 AID OFFER FORM.—The financial aid offer form shall 14 meet the following requirements: 15 ‘‘(1) Include, in addition to the requirements 16 described in subsections (b) and (c), a concise sum- 17 mary, in plain language, of— 18 ‘‘(A) the terms and conditions of financial 19 aid recommended under paragraphs (2), (4), 20 and (5) of subsection (b), and a method to pro- 21 vide students with additional information about 22 such terms and conditions, such as links to the 23 supplementary information; and 24 VerDate Sep 11 2014 23:35 Apr 23, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H2321.IH H2321 pamtmann on DSKBFK8HB2PROD with BILLS 12 •HR 2321 IH ‘‘(B) Federal, State, or institutional condi- 1 tions required to receive and renew financial aid 2 and a method to provide students with addi- 3 tional information about these conditions, such 4 as links to the supplementary information. 5 ‘‘(2) Clearly distinguish between the aid offered 6 in paragraphs (2), (4), and (5) of subsection (b), by 7 including a subtotal for the aid offered in each of 8 such paragraphs and by refraining from commin- 9 gling the different types of aid described in such 10 paragraphs. 11 ‘‘(3) Use standard terminology and definitions, 12 as described in subsection (e)(1) and use plain lan- 13 guage where possible. 14 ‘‘(4) If an institution’s recommended Federal 15 student loan aid offered in subsection (b)(5) is less 16 than the Federal maximum available to the student, 17 the institution shall provide additional information 18 on Federal student loans, including the types and 19 amounts for which the student is eligible in an at- 20 tached document or webpage. 21 ‘‘(5) Use the standard offer form described in 22 subsection (e)(2). 23 ‘‘(6) Include the standardized statement regard- 24 ing the possible availability of Federal education 25 VerDate Sep 11 2014 23:35 Apr 23, 2019 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sf [Text truncated for display. 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