Understanding the True Cost of College Act of 2015

Summary: Understanding the True Cost of College Act of 2015  This bill amends the Higher Education Opportunity Act and the Higher Education Act of 1965 to require institutions of higher education to use a standardized financial aid offer form that meets specified requirements.  The Department of Education (ED) must 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.  The form must include specified details and disclosures regarding:    the cost of attendance;  aid that does not need to be repaid;   the net price that a student or family is estimated to pay;   work study assistance;   types and amounts of loans, including monthly repayment amounts;   sources for additional information;   deadlines and the process for accepting financial aid;   the academic period covered by the aid;   default rates;   private loans; scholarships; and  the terms and conditions of federal financial aid.   ED must: (1) test the form with representatives of students, students' families, institutions of higher education, secondary school and postsecondary counselors, and nonprofit consumer groups; and (2) use the results to develop the final form.  Each institution of higher education that receives federal financial assistance under the Higher Education Act of 1965 must use the standard form when offering financial aid to students. 

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Understanding the True Cost of 
College Act of 2015''.

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, 
        which denotes figures that are estimates with a disclaimer that 
        actual costs may depend on decisions made by the student, 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, is estimated to have to pay 
        for the student to attend the institution for such academic 
        period, with a disclaimer that actual costs for some items may 
        depend on decisions by the student, 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 2015.
            ``(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 2015 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 2015, 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).''.