FACT Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 4343 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 SEPTEMBER 17, 2019 Mrs. TRAHAN (for herself and Mr. SMUCKER) introduced the following bill; which was referred to the Committee on Education and Labor 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 ‘‘Financial Aid Commu- 4 nication and Transparency Act of 2019’’ or the ‘‘FACT 5 Act of 2019’’. 6 VerDate Sep 11 2014 02:17 Sep 18, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H4343.IH H4343 kjohnson on DSK79L0C42 with BILLS 2 •HR 4343 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) REQUIREMENTS FOR OFFERS.— 6 ‘‘(A) SECRETARIAL REQUIREMENTS.—Not 7 later than 18 months after the date of enact- 8 ment of the Financial Aid Communication and 9 Transparency Act of 2019 the Secretary shall, 10 based on the consumer testing conducted under 11 subparagraph (E), publish requirements for fi- 12 nancial aid offers that shall— 13 ‘‘(i) include a requirement that finan- 14 cial aid offers shall serve as the primary 15 source for Federal, State, and institutional 16 financial aid information provided by an 17 institution of higher education partici- 18 pating in any program under this title to 19 each prospective student accepted for ad- 20 mission and each enrolled student at such 21 institution; 22 ‘‘(ii) include a requirement that such 23 offers include a standardized quick ref- 24 erence box described in subparagraph (D); 25 VerDate Sep 11 2014 02:17 Sep 18, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H4343.IH H4343 kjohnson on DSK79L0C42 with BILLS 3 •HR 4343 IH ‘‘(iii) establish standardized terms and 1 definitions, including for the elements list- 2 ed in subparagraph (C), that shall be in- 3 cluded in each such offer; 4 ‘‘(iv) establish formatting require- 5 ments with respect to the organization of 6 the elements listed in subparagraph (C), 7 which shall include, at a minimum, a re- 8 quirement that prohibits such offers from 9 displaying loans in a manner that indicates 10 or implies that such loans reduce the 11 amount owed to the institution or reduce 12 the net price; and 13 ‘‘(v) specify the simple, plain-lan- 14 guage, and consumer-friendly information 15 to be included in each such offer with re- 16 spect to the financial aid being offered to 17 a student, which shall include— 18 ‘‘(I) an explanation of differences 19 among each such type of financial aid, 20 including clear explanations that— 21 ‘‘(aa) grants and scholar- 22 ships do not have to be repaid; 23 ‘‘(bb) loans (including loans 24 made under part D and private 25 VerDate Sep 11 2014 02:17 Sep 18, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4343.IH H4343 kjohnson on DSK79L0C42 with BILLS 4 •HR 4343 IH education loans (as defined in 1 section 140 of the Truth in 2 Lending Act)) must be repaid 3 with interest; and 4 ‘‘(cc) payments under Fed- 5 eral work-study programs under 6 part C are contingent on finding 7 qualified employment and are 8 typically disbursed incrementally 9 in paychecks; 10 ‘‘(II) information clarifying that 11 students may— 12 ‘‘(aa) decline to accept a 13 loan made under part D; or 14 ‘‘(bb) accept an amount of 15 such loan that is less than the 16 amount of such loan included in 17 the financial aid offer; and 18 ‘‘(III) in a case in which the in- 19 stitution offers a student such a loan 20 in an amount that is less than the 21 maximum amount for which the stu- 22 dent is eligible, an explanation that 23 the student is eligible for additional 24 loans under part D. 25 VerDate Sep 11 2014 02:17 Sep 18, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H4343.IH H4343 kjohnson on DSK79L0C42 with BILLS 5 •HR 4343 IH ‘‘(B) INSTITUTIONAL REQUIREMENTS.— 1 Beginning with the award year that begins not 2 less than 1 year after the Secretary publishes 3 requirements under subparagraph (A), each in- 4 stitution of higher education described in sub- 5 paragraph (A)(i) shall provide a financial aid 6 offer to each student described in such subpara- 7 graph prior to each academic year that— 8 ‘‘(i) shall comply with the require- 9 ments published by the Secretary under 10 subparagraph (A); and 11 ‘‘(ii) may be supplemented by the in- 12 stitution with additional, non-contradictory 13 information related to financial aid as long 14 as such supplementary information uses 15 the standardized terms and definitions de- 16 scribed in subparagraph (A)(iii). 17 ‘‘(C) ELEMENTS.—A financial aid offer 18 provided by an institution of higher education 19 shall include the following elements with respect 20 to the academic year for which the offer is 21 being provided: 22 ‘‘(i) The cost of attendance, which 23 shall include separately calculated sub- 24 totals of— 25 VerDate Sep 11 2014 02:17 Sep 18, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H4343.IH H4343 kjohnson on DSK79L0C42 with BILLS 6 •HR 4343 IH ‘‘(I) an itemized list of estimated 1 direct costs owed to the institution; 2 and 3 ‘‘(II) an itemized list of antici- 4 pated student expenses not covered 5 under subclause (I). 6 ‘‘(ii) Federal, State, and institutional 7 financial aid available to the student, 8 which shall include separately calculated 9 subtotals of— 10 ‘‘(I) grants and scholarships; 11 ‘‘(II) loans made under part D 12 (excluding Federal Direct Parent 13 PLUS Loans); and 14 ‘‘(III) Federal work-study pro- 15 grams under part C and other on- 16 campus employment. 17 ‘‘(iii) Other options that may be avail- 18 able to students to cover the cost of at- 19 tendance (including Federal Direct Parent 20 PLUS Loans, tuition payment plans, sav- 21 ings, and earnings from other employ- 22 ment). 23 VerDate Sep 11 2014 02:17 Sep 18, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H4343.IH H4343 kjohnson on DSK79L0C42 with BILLS 7 •HR 4343 IH ‘‘(iv) The net price, which shall be de- 1 termined by calculating the difference be- 2 tween— 3 ‘‘(I) the cost of attendance de- 4 scribed in clause (i); and 5 ‘‘(II) the grants and scholarships 6 described in clause (ii)(I). 7 ‘‘(v) Next step instructions, includ- 8 ing— 9 ‘‘(I) the process and deadlines for 10 accepting the financial aid; and 11 ‘‘(II) information about where to 12 find additional information on the fi- 13 nancial aid offered. 14 ‘‘(vi) Any other information deter- 15 mined necessary by the Secretary based on 16 the consumer testing conducted under sub- 17 paragraph (E), which may include the fol- 18 lowing: 19 ‘‘(I) An estimate of the net direct 20 cost, which shall be determined by cal- 21 culating the difference between— 22 ‘‘(aa) the direct costs owed 23 to the institution described in 24 clause (i)(I); and 25 VerDate Sep 11 2014 02:17 Sep 18, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H4343.IH H4343 kjohnson on DSK79L0C42 with BILLS 8 •HR 4343 IH ‘‘(bb) the grants and schol- 1 arships described in clause (ii)(I). 2 ‘‘(II) Information on average stu- 3 dent debt, loan repayment and default 4 rates, loan repayment options, and 5 graduation rates. 6 ‘‘(III) In the case of a prospec- 7 tive student, the process and deadlines 8 for enrolling at the institution. 9 ‘‘(IV) Information regarding the 10 enrollment period covered by the aid 11 offer, and whether the cost and aid 12 estimates are based on full-time or 13 part-time enrollment. 14 ‘‘(D) STANDARDIZED QUICK REFERENCE 15 BOX.—A financial aid offer provided by an in- 16 stitution of higher education shall include a 17 standardized quick reference box to enable stu- 18 dents to quickly and easily compare key infor- 19 mation on college costs and financial aid— 20 ‘‘(i) that shall be included in an iden- 21 tical fashion for each student receiving a 22 financial aid offer from the institution on 23 the first page of such offer; 24 VerDate Sep 11 2014 02:17 Sep 18, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H4343.IH H4343 kjohnson on DSK79L0C42 with BILLS 9 •HR 4343 IH ‘‘(ii) the contents and structure of 1 which shall be developed through consumer 2 testing conducted under paragraph (E); 3 and 4 ‘‘(iii) shall include three data ele- 5 ments: 6 ‘‘(I) Cost of attendance. 7 ‘‘(II) Total grants and scholar- 8 ships offered. 9 ‘‘(III) Net price. 10 ‘‘(E) CONSUMER TESTING.—The Secretary 11 shall— 12 ‘‘(i) conduct consumer testing that 13 shall serve as the basis in determining the 14 requirements for financial aid offers pub- 15 lished under subparagraph (A), which shall 16 include students (including low-income stu- 17 dents, English learners, first generation 18 college students, veteran students, grad- 19 uate students, and undergraduate students 20 (including prospective students and return- 21 ing students)), students’ families (includ- 22 ing low-income families, families of English 23 learners, and families with first generation 24 college students), institutions of higher 25 VerDate Sep 11 2014 02:17 Sep 18, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H4343.IH H4343 kjohnson on DSK79L0C42 with BILLS 10 •HR 4343 IH education (including representatives from 1 two- and four-year institutions, public and 2 private institutions, and minority-serving 3 institutions), secondary school and postsec- 4 ondary counselors, financial aid adminis- 5 trators, nonprofit college access organiza- 6 tions, and nonprofit consumer groups; and 7 ‘‘(ii) not later than 60 days after the 8 publication of the requirements under sub- 9 paragraph (A)— 10 ‘‘(I) issue a report on the find- 11 ings of the consumer testing under 12 this subparagraph; and 13 ‘‘(II) specify ways in which the 14 findings are reflected in such require- 15 ments. 16 ‘‘(2) DEFINITIONS.—In this subsection— 17 ‘‘(A) the term ‘cost of attendance’ has the 18 meaning given the term in section 472; 19 ‘‘(B) the term ‘English learner’ has the 20 meaning given the term in section 8101(20) of 21 the Elementary and Secondary Education Act 22 of 1965 (20 U.S.C. 7801(20)), except that such 23 term does not include individuals described in 24 subparagraph (B) of such section; 25 VerDate Sep 11 2014 02:17 Sep 18, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H4343.IH H4343 kjohnson on DSK79L0C42 with BILLS 11 •HR 4343 IH ‘‘(C) the term ‘first generation college stu- 1 dent’ has the meaning given the term in section 2 402A(h); 3 ‘‘(D) the term ‘low-income student’ has the 4 meaning given the term in section 419N(b)(7); 5 and 6 ‘‘(E) the term ‘minority-serving institution’ 7 means an institution of higher education de- 8 scribed in section 371(a).’’. 9 Æ VerDate Sep 11 2014 02:17 Sep 18, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6301 E:\BILLS\H4343.IH H4343 kjohnson on DSK79L0C42 with BILLS