Understanding the True Cost of College Act of 2013 - Amends the Higher Education Opportunity Act to refer to the Secretary of Education's model institution of higher eduction (IHE) financial aid offer form as the standard form.
Requires the standard form to include certain additional items, such as: (1) information concerning work study assistance, including its dependence on the availability of employment opportunities; (2) the disclosure that federal student loans offer generally more favorable terms and repayment options than private education loans; (3) the deadline for and a summary of the financial aid acceptance process; (4) the academic period covered by the offer and whether the aid is based on full-time or part-time enrollment; and (5) the IHE's most recent cohort default rate compared to the national average cohort default rate, if more than 30% of the school's students take out student loans.
Requires more detailed information to be included on the form.
Includes among those details, with respect to federal education loans, information: (1) identifying the type and amount of loan recommended for the applicable student; (2) clearly indicating that such loans need to be repaid; (3) disclosing the student's right to borrow less than the recommended amount; (4) detailing the interest rates, fees, expected monthly repayment amounts, and sums to be paid over the life of such loans (assuming a ten-year repayment plan); and (5) disclosing the student's possible eligibility for longer repayment terms and that longer repayment terms may result in the student paying more over the life of such loans.
Requires that certain steps be taken to improve the clarity of the form and provide recipients with access to additional information.
Directs the Secretary, before finalizing the standard form, to submit it to consumer testing among students, their families, IHEs, secondary school and postsecondary counselors, and nonprofit consumer groups.
Amends title IV (Student Assistance) of the Higher Education Act of 1965 to require each IHE receiving federal financial assistance under the Act to use the standard form in providing written or electronic financial aid offers to students enrolled in, or accepted for enrollment in, the IHE.
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 1156 Introduced in Senate (IS)]
113th CONGRESS
1st Session
S. 1156
To amend the Higher Education Opportunity Act to add disclosure
requirements to the institution financial aid offer form and to amend
the Higher Education Act of 1965 to make such form mandatory.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 13, 2013
Mr. Franken (for himself, Mr. Grassley, Mr. Harkin, Mr. Rubio, Mrs.
Gillibrand, Mrs. Murray, Mr. Cardin, Mr. Schumer, Mr. Carper, Mr.
Blumenthal, Mr. Wyden, Mr. Durbin, Mr. Whitehouse, Mr. Johnson of South
Dakota, Mr. Coons, and Ms. Mikulski) introduced the following bill;
which was read twice and referred to the Committee on Health,
Education, Labor, and Pensions
_______________________________________________________________________
A BILL
To amend the Higher Education Opportunity Act to add disclosure
requirements to the institution financial aid offer form and to amend
the Higher Education Act of 1965 to make such form mandatory.
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 2013''.
SEC. 2. INSTITUTION FINANCIAL AID OFFER FORM.
(a) Institution Financial Aid Offer Form.--Section 484 of the
Higher Education Opportunity Act (20 U.S.C. 1092 note) is amended--
(1) by striking subsection (a) and inserting the following:
``(a) Standard Format.--The Secretary of Education, in consultation
with the heads of relevant Federal agencies, shall develop a standard
format for financial aid offer forms based on recommendations from
representatives of students, students' families, institutions of higher
education, secondary school and postsecondary counselors, and nonprofit
consumer groups.'';
(2) by striking subsection (b) and inserting the following:
``(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, the following items clearly
separated from each other and listed on the first page of the financial
aid offer form in either electronic or written format:
``(1) Information on the student's cost of attendance based
on the most current costs for the academic period covered by
the financial aid offer form, including the following:
``(A) Tuition and fees, as determined under section
472 of the Higher Education Act of 1965 (20 U.S.C.
1087ll).
``(B) Room and board costs, as determined under
section 472 of the Higher Education Act of 1965 (20
U.S.C. 1087ll).
``(C) Books and supplies, as determined under
section 472 of the Higher Education Act of 1965 (20
U.S.C. 1087ll).
``(D) Transportation, as determined under section
472 of the Higher Education Act of 1965 (20 U.S.C.
1087ll).
``(E) Miscellaneous personal expenses, as
determined under section 472 of the Higher Education
Act of 1965 (20 U.S.C. 1087ll).
``(2) The amount of financial aid that the student does not
have to repay, such as scholarships, grant aid offered under
title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et
seq.), or grant aid offered by the institution, a State, or an
outside source to the student for such academic period,
including a disclosure that the financial aid does not have to
be repaid and whether the student can expect to receive similar
amounts of such financial aid for each academic period the
student is enrolled at the institution.
``(3) The net price that the student, or the student's
family on behalf of the student, will have to pay for the
student to attend the institution for such academic period,
equal to--
``(A) the cost of attendance as described in
paragraph (1) for the student for such academic period,
minus
``(B) the amount of financial aid described in
paragraph (2) that is included in the financial aid
offer form.
``(4) Work study assistance, including a disclosure that
the aid must be earned by the student and a disclosure that the
assistance offered is subject to the availability of employment
opportunities.
``(5) The types and amounts of loans under part D or E of
title IV of the Higher Education Act of 1965 (20 U.S.C. 1087a
et seq., 1087aa et seq.) that the institution recommends for
the student for such academic period, a disclosure that such
loans have to be repaid, a disclosure that the student can
borrow a lesser amount than the recommended loan amount, a
clear use of the word `loan' to describe the recommended loan
amounts, the interest rates, fees, the expected monthly
repayment amounts (assuming a 10-year repayment plan), the
total amount the student will pay over the life of the loans
(assuming a 10-year repayment plan), and a disclosure that the
student may be eligible for longer repayment terms, such as
extended or income-based plans, and that longer repayment terms
may result in the student paying more money over the life of
the loans.
``(6) 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.
``(7) A disclosure that Federal student loans offer
generally more favorable terms and beneficial repayment options
than private education loans so students should examine
available Federal student loan options before applying for
private education loans, and an explanation to be written by
the Secretary of Education, in consultation with the heads of
relevant Federal agencies, of the benefits unique to Federal
student loans, including various repayment plans, loan
forgiveness, and loan deferment, and the terms to examine
carefully if considering a private education loan.
``(8) The deadline and summary of the process, if any, for
accepting the financial aid offered in the financial aid offer
form.
``(9) The academic period covered by the financial aid
offer form and a clear indication whether the aid offered is
based on full-time or part-time enrollment.
``(10) With respect to institutions where more than 30
percent of enrolled students borrow loans to pay for their
education, the institution's most recent cohort default rate,
as defined in section 435(m) of the Higher Education Act of
1965 (20 U.S.C. 1085(m)), compared to the national average
cohort default rate.
``(11) Any other information the Secretary of Education, in
consultation with the heads of relevant Federal agencies,
determines necessary so that students and parents can make
informed loan borrowing decisions, including quality metrics
such as percentage of students at the institution who take out
student loans and average debt at graduation for students at
the institution.''; and
(3) by adding at the end the following:
``(c) Other Required Contents for the Offer Form.--The standard
format developed under subsection (a) shall also include 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) A concise summary of the terms and conditions of
financial aid recommended under paragraphs (2), (4), and (5) of
subsection (b), and a method to provide students with
additional information about such terms and conditions, such as
links to the supplementary information.
``(2) At the institution's discretion, additional options
for paying for the net amount listed in subsection (b)(3), such
as the amount recommended to be paid by the student or
student's family, Federal Direct PLUS Loans under section 455
of the Higher Education Act of 1965 (20 U.S.C. 1087e), or
private education loans. If the institution recommends private
education loans, as defined in section 140 of the Truth in
Lending Act (15 U.S.C. 1650), the financial aid offer form
shall contain the additional following disclosures on the offer
form:
``(A) The availability of, and the student's
potential eligibility for, Federal financial assistance
under title IV of the Higher Education Act of 1965 (20
U.S.C. 1070 et seq.).
``(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) The student's ability to select a private
educational lender of the student's choice.
``(D) The student's right to accept or reject a
private education loan within the 30-day period
following a private educational lender's approval of a
student's application and a student's 3-day right-to-
cancel period.
``(E) With respect to dependent students, any
reference to private education loans shall be
accompanied by information about the recommended family
contribution and 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 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.
``(3) The following disclosures:
``(A) That the financial aid offer form only
contains information for 1 academic period and the
financial aid offered in following academic periods may
change, unless the institution is offering aid that
covers multiple academic periods.
``(B) How non-institutional scholarships awarded to
the student affect the financial aid package offered to
the student.
``(C) A concise summary of any Federal 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.
``(d) Additional Requirements for Financial Aid Offer Form.--In
addition to the requirements listed under subsections (b) and (c), the
financial aid offer form shall meet the following requirements:
``(1) Clearly distinguish between the aid offered in
paragraphs (2), (4), and (5) of subsection (b), 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.
``(2) Use standard definitions and names for the terms
described in subsection (b) that are developed by the Secretary
of Education in consultation with the heads of relevant Federal
agencies, representatives of institutions of higher education,
nonprofit consumer groups, students, and secondary school and
higher education guidance counselors, not later than 3 months
after the date of enactment of the Understanding the True Cost
of College Act of 2013.
``(3) If an institution's recommended Federal student loan
aid offered in subsection (b)(5) 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.
``(4) Use standard formatting and design that the Secretary
of Education, in consultation with the heads of relevant
Federal agencies, representatives of institutions of higher
education, nonprofit consumer groups, students, and secondary
school and higher education guidance counselors determine is
appropriate to produce multiple draft financial aid offer
designs for consumer testing not later than 3 months after the
date of enactment of the Understanding the True Cost of College
Act of 2013 to ensure--
``(A) that figures described in paragraphs (1)
through (5) of subsection (b) are in the same font,
appear in the same order, and are displayed prominently
on the first page of the financial aid offer form
whether produced in written or electronic format; and
``(B) that the other information required in (b)
and (c) appears in a standard format and design on the
financial aid offer form.
``(5) Include an attestation that the student has accessed
and read the financial aid offer form, if provided to the
student in electronic format.
``(6) Include language developed by the Secretary of
Education, in consultation with the heads of relevant Federal
agencies, notifying eligible students that they may be eligible
for education benefits, and where they can locate more
information about such benefits, described in the following
provisions:
``(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.
``(e) Additional Information.--Nothing in this section shall
preclude an institution from supplementing the financial aid offer form
with additional information so long as such additional information
supplements the financial aid offer form and is not located on the
financial aid offer form.
``(f) Consumer Testing.--
``(1) In general.--Not later than 3 months after the date
of enactment of the Understanding the True Cost of College Act
of 2013, the Secretary of Education, in consultation with the
heads of relevant Federal agencies, shall establish a process
to submit the financial aid offer form developed under this
section for consumer testing among representatives of students
(including low-income students, first generation college
students, adult students, 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.
``(2) Length of consumer testing.--The Secretary of
Education shall ensure that the consumer testing lasts no
longer than 6 months after the process for consumer testing is
developed under paragraph (1).
``(3) Use of results.--The results of consumer testing
under paragraph (1) shall be used in the final development of
the financial aid offer form.
``(4) Reporting requirement.--Not later than 3 months after
the date the consumer testing under paragraph (1) concludes,
the Secretary of Education shall submit to Congress the final
standard financial aid offer form and a report detailing the
results of such testing, including whether the Secretary added
any additional items to the standard financial aid offer form
pursuant to subsection (b)(10).
``(5) 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.''.
(b) 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.
``(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 financial aid offer form
developed under section 484 of the Higher Education Opportunity Act (20
U.S.C. 1092 note) in providing written or electronic financial aid
offers to students enrolled in, or accepted for enrollment in, the
institution.
``(b) Effective Date.--The requirement under subsection (a) shall
take effect 8 months after the Secretary of Education finalizes the
offer form developed under section 484(a) of the Higher Education
Opportunity Act (20 U.S.C. 1092 note).''.
<all>
Introduced in Senate
Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
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