II 

112TH CONGRESS 

2D SESSION S. 3244 

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 

MAY 24, 2012 

Mr. FRANKEN (for himself, Mr. HARKIN, Mr. GRASSLEY, Mr. BLUMENTHAL, 

Mr. SCHUMER, Ms. MIKULSKI, Mr. JOHNSON of South Dakota, Mr. 

WYDEN, and Mr. CARDIN) 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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Understanding the 

5 True Cost of College Act of 2012’’. 


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1 SEC. 2. INSTITUTION FINANCIAL AID OFFER FORM. 

2 (a) INSTITUTION FINANCIAL AID OFFER FORM.— 

3 Section 484 of the Higher Education Opportunity Act (20 

4 U.S.C. 1092 note) is amended— 

5 (1) by striking subsection (a) and inserting the 

6 following: 

7 ‘‘(a) STANDARD FORMAT.—The Secretary of Edu8 cation, in consultation with the heads of relevant Federal 

9 agencies, shall develop a standard format for financial aid 

10 offer forms based on recommendations from representa11 tives of students, students’ families, institutions of higher 

12 education, secondary school and postsecondary counselors, 

13 and nonprofit consumer groups.’’; 

14 (2) by striking subsection (b) and inserting the 

15 following: 

16 ‘‘(b) KEY REQUIRED CONTENTS FOR OFFER

17 FORM.—The standard format developed under subsection 

18 (a) shall include, in a consumer-friendly manner that is 

19 simple and understandable, the following items clearly sep20 arated from each other and listed on the first page of the 

21 financial aid offer form in either electronic or written for22 mat: 

23 ‘‘(1) Information on the student’s cost of at24 tendance based on the most current costs for the 

25 academic period covered by the financial aid offer 

26 form, including the following: 


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1 ‘‘(A) Tuition and fees, as determined 

2 under section 472 of the Higher Education Act 

3 of 1965 (20 U.S.C. 1087ll). 

4 ‘‘(B) Room and board costs, as determined 

5 under section 472 of the Higher Education Act 

6 of 1965 (20 U.S.C. 1087ll). 

7 ‘‘(C) Books and supplies, as determined 

8 under section 472 of the Higher Education Act 

9 of 1965 (20 U.S.C. 1087ll). 

10 ‘‘(D) Transportation, as determined under 

11 section 472 of the Higher Education Act of 

12 1965 (20 U.S.C. 1087ll). 

13 ‘‘(E) Miscellaneous personal expenses, as 

14 determined under section 472 of the Higher 

15 Education Act of 1965 (20 U.S.C. 1087ll). 

16 ‘‘(2) The amount of financial aid that the stu17 dent does not have to repay, such as scholarships, 

18 grant aid offered under title IV of the Higher Edu19 cation Act of 1965 (20 U.S.C. 1070 et seq.), or 

20 grant aid offered by the institution, a State, or an 

21 outside source to the student for such academic pe22 riod, including a disclosure that the financial aid 

23 does not have to be repaid and whether the student 

24 can expect to receive similar amounts of such finanVerDate Mar 15 2010 23:55 May 29, 2012 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3244.IS S3244

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1 cial aid for each academic period the student is en2 rolled at the institution. 

3 ‘‘(3) The net amount that the student, or the 

4 student’s family on behalf of the student, will have 

5 to pay for the student to attend the institution for 

6 such academic period, equal to— 

7 ‘‘(A) the cost of attendance as described in 

8 paragraph (1) for the student for such aca9 demic period, minus 

10 ‘‘(B) the amount of financial aid described 

11 in paragraph (2) that is included in the finan12 cial aid offer form. 

13 ‘‘(4) Work study assistance, including a disclo14 sure that the aid must be earned by the student and 

15 a disclosure that the assistance offered is subject to 

16 the availability of employment opportunities. 

17 ‘‘(5) The types and amounts of loans under 

18 part D or E of title IV of the Higher Education Act 

19 of 1965 (20 U.S.C. 1087a et seq., 1087aa et seq.) 

20 that the institution recommends for the student for 

21 such academic period, a disclosure that such loans 

22 have to be repaid, a disclosure that the student can 

23 borrow a lesser amount than the recommended loan 

24 amount, a clear use of the word ‘loan’ to describe 

25 the recommended loan amounts, the interest rates, 


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1 fees, the expected monthly repayment amounts as2 suming a 10-year repayment plan, and the total 

3 amounts the student will pay over the life of the 

4 loans. 

5 ‘‘(6) Where a student or the student’s family 

6 can seek additional information regarding the finan7 cial aid offered, including contact information for 

8 the institution’s financial aid office and the Depart9 ment of Education’s website on financial aid. 

10 ‘‘(7) A disclosure that Federal student loans 

11 offer generally more favorable terms and beneficial 

12 repayment options than private education loans so 

13 students should examine available Federal student 

14 loan options before applying for private education 

15 loans, and an explanation to be written by the Sec16 retary of Education, in consultation with the heads 

17 of relevant Federal agencies, of the benefits unique 

18 to Federal student loans, including various repay19 ment plans, loan forgiveness, and loan deferment, 

20 and the terms to examine carefully if considering a 

21 private education loan. 

22 ‘‘(8) The deadline and summary of the process, 

23 if any, for accepting the financial aid offered in the 

24 financial aid offer form. 


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1 ‘‘(9) The academic period covered by the finan2 cial aid offer form and a clear indication whether the 

3 aid offered is based on full-time or part-time enroll4 ment. 

5 ‘‘(10) With respect to institutions where more 

6 than 30 percent of enrolled students borrow loans to 

7 pay for their education, the institution’s most recent 

8 cohort default rate, as defined in section 435(m) of 

9 the Higher Education Act of 1965 (20 U.S.C. 

10 1085(m)), compared to the national average cohort 

11 default rate. 

12 ‘‘(11) Any other information the Secretary of 

13 Education, in consultation with the heads of relevant 

14 Federal agencies, determines necessary so that stu15 dents and parents can make informed loan bor16 rowing decisions, including quality metrics such as 

17 percentage of students at the institution who take 

18 out student loans and average debt at graduation for 

19 students at the institution.’’; and 

20 (3) by adding at the end the following: 

21 ‘‘(c) OTHER REQUIRED CONTENTS FOR THE OFFER

22 FORM.—The standard format developed under subsection 

23 (a) shall also include the following information to be in24 cluded on the financial aid offer form in a concise format 


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1 determined by the Secretary of Education, in consultation 

2 with the heads of relevant Federal agencies: 

3 ‘‘(1) A concise summary of the terms and con4 ditions of financial aid recommended under para5 graphs (2), (4), and (5) of subsection (b) and a 

6 method to provide students with additional informa7 tion about such terms and conditions, such as links 

8 to the supplementary information, including that the 

9 student may be eligible for longer loan repayment 

10 terms. 

11 ‘‘(2) At the institution’s discretion, additional 

12 options for paying for the net amount listed in sub13 section (b)(3), such as the amount recommended to 

14 be paid by the student or student’s family, Federal 

15 Direct PLUS Loans under section 455 of the High16 er Education Act of 1965 (20 U.S.C. 1087e), or pri17 vate education loans. If the institution recommends 

18 private education loans, as defined in section 140 of 

19 the Truth in Lending Act (15 U.S.C. 1650), the fi20 nancial aid offer form shall contain the additional 

21 following disclosures on the offer form: 

22 ‘‘(A) The availability of, and the student’s 

23 potential eligibility for, Federal financial assist24 ance under title IV of the Higher Education 

25 Act of 1965 (20 U.S.C. 1070 et seq.). 


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1 ‘‘(B) The impact of a proposed private 

2 education loan on the student’s potential eligi3 bility for other financial assistance, including 

4 Federal financial assistance under title IV of 

5 the Higher Education Act of 1965 (20 U.S.C. 

6 1070 et seq.). 

7 ‘‘(C) The student’s ability to select a pri8 vate educational lender of the student’s choice. 

9 ‘‘(D) The student’s right to accept or re10 ject a private education loan within the 30-day 

11 period following a private educational lender’s 

12 approval of a student’s application and a stu13 dent’s 3-day right-to-cancel period. 

14 ‘‘(E) With respect to dependent students, 

15 any reference to private education loans shall be 

16 accompanied by information about the rec17 ommended family contribution and the avail18 ability of, and terms and conditions associated 

19 with, Federal Direct PLUS Loans under sec20 tion 455 of the Higher Education Act of 1965 

21 (20 U.S.C. 1087e) for the student’s parents re22 gardless of family income, and of the student’s 

23 increased eligibility for Federal student loans 

24 under title IV of the Higher Education Act of 

25 1965 (20 U.S.C. 1070 et seq.) if the student’s 


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1 parents are not able to borrow under the Fed2 eral Direct PLUS Loan program. 

3 ‘‘(3) The following disclosures: 

4 ‘‘(A) That the financial aid offer form only 

5 contains information for 1 academic period and 

6 the financial aid offered in following academic 

7 periods may change, unless the institution is of8 fering aid that covers multiple academic peri9 ods. 

10 ‘‘(B) How non-institutional scholarships 

11 awarded to the student affect the financial aid 

12 package offered to the student. 

13 ‘‘(C) A concise summary of any Federal or 

14 institutional conditions required to receive and 

15 renew financial aid and a method to provide 

16 students with additional information about 

17 these conditions, such as links to the supple18 mentary information. 

19 ‘‘(d) ADDITIONAL REQUIREMENTS FOR FINANCIAL

20 AID OFFER FORM.—In addition to the requirements listed 

21 under subsections (b) and (c), the financial aid offer form 

22 shall meet the following requirements: 

23 ‘‘(1) Clearly distinguish between the aid offered 

24 in paragraphs (2), (4), and (5) of subsection (b), by 

25 including a subtotal for the aid offered in each of 


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1 such paragraphs and by refraining from commin2 gling the different types of aid described in such 

3 paragraphs. 

4 ‘‘(2) Use standard definitions and names for 

5 the terms described in subsection (b) that are devel6 oped by the Secretary of Education in consultation 

7 with the heads of relevant Federal agencies, rep8 resentatives of institutions of higher education, non9 profit consumer groups, students, and secondary 

10 school and higher education guidance counselors, not 

11 later than 3 months after the date of enactment of 

12 the Understanding the True Cost of College Act of 

13 2012. 

14 ‘‘(3) 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 at20 tached document or webpage. 

21 ‘‘(4) Use standard formatting and design that 

22 the Secretary of Education, in consultation with the 

23 heads of relevant Federal agencies, representatives 

24 of institutions of higher education, nonprofit con25 sumer groups, students, and secondary school and 


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1 higher education guidance counselors determine is 

2 appropriate to produce multiple draft financial aid 

3 offer designs for consumer testing not later than 3 

4 months after the date of enactment of the Under5 standing the True Cost of College Act of 2012 to en6 sure— 

7 ‘‘(A) that figures described in paragraphs 

8 (1) through (5) of subsection (b) are in the 

9 same font, appear in the same order, and are 

10 displayed prominently on the first page of the 

11 financial aid offer form whether produced in 

12 written or electronic format; and 

13 ‘‘(B) that the other information required 

14 in (b) and (c) appears in a standard format and 

15 design on the financial aid offer form. 

16 ‘‘(5) Include an attestation that the student has 

17 accessed and read the financial aid offer form, if 

18 provided to the student in electronic format. 

19 ‘‘(6) Include language developed by the Sec20 retary of Education, in consultation with the heads 

21 of relevant Federal agencies, notifying eligible stu22 dents that they may be eligible for education bene23 fits, and where they can locate more information 

24 about such benefits, described in the following provi25 sions: 


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1 ‘‘(A) Chapter 30, 31, 32, 33, 34, or 35 of 

2 title 38, United States Code. 

3 ‘‘(B) Chapter 101, 105, 106A, 1606, 1607, 

4 or 1608 of title 10, United States Code. 

5 ‘‘(C) Section 1784a, 2005, or 2007 of title 

6 10, United States Code. 

7 ‘‘(e) ADDITIONAL INFORMATION.—Nothing in this 

8 section shall preclude an institution from supplementing 

9 the financial aid offer form with additional information so 

10 long as such additional information supplements the fi11 nancial aid offer form and is not located on the financial 

12 aid offer form. 

13 ‘‘(f) CONSUMER TESTING.— 

14 ‘‘(1) IN GENERAL.—Not later than 3 months 

15 after the date of enactment of the Understanding 

16 the True Cost of College Act of 2012, the Secretary 

17 of Education, in consultation with the heads of rel18 evant Federal agencies, shall establish a process to 

19 submit the financial aid offer form developed under 

20 this section for consumer testing among representa21 tives of students (including low-income students, 

22 first generation college students, adult students, and 

23 prospective students), students’ families (including 

24 low-income families, families with first generation 

25 college students, and families with prospective stuVerDate Mar 15 2010 23:55 May 29, 2012 Jkt 019200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S3244.IS S3244

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1 dents), institutions of higher education, secondary 

2 school and postsecondary counselors, and nonprofit 

3 consumer groups. 

4 ‘‘(2) LENGTH OF CONSUMER TESTING.—The 

5 Secretary of Education shall ensure that the con6 sumer testing lasts no longer than 6 months after 

7 the process for consumer testing is developed under 

8 paragraph (1). 

9 ‘‘(3) USE OF RESULTS.—The results of con10 sumer testing under paragraph (1) shall be used in 

11 the final development of the financial aid offer form. 

12 ‘‘(4) REPORTING REQUIREMENT.—Not later 

13 than 3 months after the date the consumer testing 

14 under paragraph (1) concludes, the Secretary of 

15 Education shall submit to Congress the final stand16 ard financial aid offer form and a report detailing 

17 the results of such testing, including whether the 

18 Secretary added any additional items to the stand19 ard financial aid offer form pursuant to subsection 

20 (b)(10). 

21 ‘‘(5) AUTHORITY TO MODIFY.—The Secretary 

22 of Education may modify the definitions, terms, for23 matting, and design of the financial aid offer form 

24 based on the results of consumer testing required 


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1 under this subsection and before finalizing the 

2 form.’’. 

3 (b) MANDATORY FORM.—Part B of title I of the 

4 Higher Education Act of 1965 (20 U.S.C. 1011 et seq.) 

5 is amended by adding at the end the following: 

6 ‘‘SEC. 124. USE OF MANDATORY FINANCIAL AID OFFER 

7 FORM. 

8 ‘‘(a) IN GENERAL.—Notwithstanding any other pro9 vision of law, each institution of higher education that re10 ceives Federal financial assistance under this Act shall use 

11 the financial aid offer form developed under section 484 

12 of the Higher Education Opportunity Act (20 U.S.C. 1092 

13 note) in providing written or electronic financial aid offers 

14 to students enrolled in, or accepted for enrollment in, the 

15 institution. 

16 ‘‘(b) EFFECTIVE DATE.—The requirement under 

17 subsection (a) shall take effect 8 months after the Sec18 retary of Education finalizes the offer form developed 

19 under section 484(a) of the Higher Education Oppor20 tunity Act (20 U.S.C. 1092 note).’’. 

Æ 


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