College Cost Transparency and Student Protection Act
Bill: H.R.9429 | Sponsor: Rep. McClain, Lisa C. (R-MI)
Policy area: Education

Summary:
College Cost Transparency and Student Protection Act
This bill outlines requirements for financial aid offers that must be provided to prospective and enrolled students.
Specifically, the bill requires the Department of Education (ED) to publish requirements for financial aid offers that each institution of higher education (IHE) participating in federal student aid programs must provide to students. These requirements include standardized terms and definitions, certain formatting requirements, and components regarding costs.
In particular, a financial aid offer must first include a component related to direct costs (i.e., tuition, fees, and other expenses required for the student to enroll in the IHE). If the student completes the component related to direct costs and confirms that the student is seeking financial assistance for indirect costs (e.g., housing and food, books and supplies, and transportation), then the offer must include components related to those indirect costs. IHEs may not refer to these offers as award letters.
The bill requires ED to ensure that information published on the website of each IHE or the College Scorecard includes information on costs, earnings, and loan payments in a manner consistent with financial aid offers. The College Scorecard is a comparison tool for information on school sizes, settings, graduation rates, average costs, and salary ranges per field of study.

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.

    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 ``College Cost Transparency and 
Student Protection Act''.

SEC. 2. FINANCIAL AID OFFERS.

    Section 485 of the Higher Education Act of 1965 (20 U.S.C. 1092) is 
amended by adding at the end the following:
    ``(n) Financial Aid Offers.--
            ``(1) Institutional requirements.--Beginning with the first 
        award year that begins not less than 1 year after the Secretary 
        publishes requirements under subparagraph (2), each institution 
        of higher education participating in any program under this 
        title shall provide to each enrolled student (and prospective 
        student accepted for enrollment) at such institution who 
        applies for financial assistance under this title, a financial 
        aid offer that--
                    ``(A) shall comply with the requirements published 
                by the Secretary under paragraph (2); and
                    ``(B) may be supplemented by the institution with 
                additional, non-contradictory information related to 
                financial aid as long as such supplementary information 
                uses the standardized terms and definitions described 
                in paragraph (2).
            ``(2) Secretarial requirements.--Not later than 18 months 
        after the date of enactment of the College Cost Transparency 
        and Student Protection Act, the Secretary shall, based on the 
        consumer testing conducted under paragraph (4), publish 
        requirements for financial aid offers to be used by 
        institutions of higher education under paragraph (1), which 
        shall--
                    ``(A) serve as the primary source for Federal, 
                State, and institutional financial aid information 
                provided by an institution of higher education 
                participating in any program under this title to each 
                enrolled student (and prospective student accepted for 
                enrollment) at such institution;
                    ``(B) include a requirement that no financial aid 
                offer may be referred to as an award letter;
                    ``(C) include the required content described in 
                paragraph (3);
                    ``(D) establish standardized terms and definitions, 
                including for the required content described in 
                paragraph (3), which shall be included in each 
                financial aid offer; and
                    ``(E) establish formatting requirements with 
                respect to the organization of the contents described 
                in paragraph (3), which--
                            ``(i) shall include--
                                    ``(I) a requirement that prohibits 
                                any such offer from displaying loans in 
                                a manner that indicates or implies that 
                                such loans reduce the amount owed to 
                                the institution or reduce the out-of-
                                pocket costs; and
                                    ``(II) requirements that ensure 
                                that before completing the component of 
                                an offer relating to indirect costs, a 
                                student completes the component of an 
                                offer relating to direct costs and 
                                confirms that such student is seeking 
                                financial assistance for indirect 
                                costs; and
                            ``(ii) may not establish, or require that 
                        institutions of higher education use, a uniform 
                        format for such offers.
            ``(3) Required content for a financial aid offer.--
                    ``(A) In general.--An institution of higher 
                education shall provide, to each enrolled student (and 
                prospective student accepted for enrollment) at such 
                institution who applies for financial assistance under 
                this title, a financial aid offer for an academic 
                period covered by such offer, which shall include the 
                following:
                            ``(i) A component relating to the direct 
                        costs for such student for such academic 
                        period, which shall include the content 
                        described in subparagraphs (B) and (D).
                            ``(ii) In a case in which the student 
                        completes the component described in clause (i) 
                        and confirms that such student is seeking 
                        financial assistance for indirect costs for 
                        such academic period, a component relating to 
                        such indirect costs, which shall include the 
                        content described in subparagraphs (C) and (D).
                    ``(B) Component for direct costs.--The component of 
                a financial aid offer relating to direct costs shall 
                include the following content:
                            ``(i) Estimated sum of direct costs.--The 
                        estimated sum of the student's direct costs for 
                        the academic period covered by such offer, 
                        which shall be the sum of--
                                    ``(I) the cost of tuition and fees, 
                                as defined in section 472(a)(1), as 
                                amended by section 702 of the FAFSA 
                                Simplification Act; and
                                    ``(II) any other required expenses, 
                                as determined by the institution and 
                                presented as an itemized list.
                            ``(ii) Grants and scholarships.--
                                    ``(I) In general.--The aggregate 
                                amount of grants and scholarships by 
                                source that the student does not have 
                                to repay, such as grant aid offered 
                                under this title and grant aid offered 
                                through other Federal programs, grant 
                                aid offered by the institution, grant 
                                aid offered by the State, and, if 
                                known, grant aid from an outside source 
                                for such academic period.
                                    ``(II) Federal grant aid.--With 
                                respect to Federal grant aid, the 
                                conditions under which the student can 
                                expect to receive similar amounts of 
                                such Federal grant aid for each 
                                academic period the student is enrolled 
                                at the institution.
                                    ``(III) Institutional grant aid.--
                                With respect to institutional grant 
                                aid--
                                            ``(aa) the conditions under 
                                        which the student can expect to 
                                        receive similar amounts of such 
                                        institutional grant aid for 
                                        each academic period the 
                                        student is enrolled at the 
                                        institution; and
                                            ``(bb) whether the 
                                        institutional grant aid offer 
                                        may change if grants or 
                                        scholarships from outside 
                                        sources are applied after the 
                                        student receives the financial 
                                        aid offer, and, if applicable, 
                                        how that institutional grant 
                                        aid will change.
                                    ``(IV) Indirect costs.--An 
                                identification of any grants or 
                                scholarships described in subclause (I) 
                                that are required to be used for any 
                                indirect costs selected by the student 
                                under subparagraph (C)(i).
                            ``(iii) Out-of-pocket costs (relating to 
                        direct costs).--The out-of-pocket costs 
                        (relating to direct costs) 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, equal to--
                                    ``(I) the estimated sum of the 
                                student's direct costs described in 
                                clause (i); minus
                                    ``(II) the aggregate amount of 
                                grants and scholarships described in 
                                clause (ii) that may be used to cover 
                                such direct costs.
                            ``(iv) Financing options.--
                                    ``(I) In general.--In plain 
                                language and based on consumer testing 
                                under paragraph (4), the offer shall 
                                include the following financing options 
                                (in the following order) to cover the 
                                total out-of-pocket costs determined 
                                under clause (iii):
                                            ``(aa) Cash or other 
                                        personal resources, including 
                                        the expected family 
                                        contribution of the student.
                                            ``(bb) Loans made to the 
                                        student under part D (excluding 
                                        Federal Direct PLUS Loans), 
                                        which shall--

                                                    ``(AA) clearly 
                                                label whether the loan 
                                                is subsidized or 
                                                unsubsidized; and

                                                    ``(BB) require the 
                                                student to (1) accept 
                                                any such loan by 
                                                specifying the loan 
                                                amount the student is 
                                                accepting (which may be 
                                                an amount that is less 
                                                than the maximum amount 
                                                for which such student 
                                                is eligible under part 
                                                D) or (2) decline any 
                                                such loan.

                                            ``(cc) Work-study 
                                        employment opportunities, 
                                        offered in accordance with part 
                                        C, and other campus employment, 
                                        if applicable, which shall 
                                        require the student to (1) 
                                        accept any such opportunity or 
                                        (2) decline any such 
                                        opportunity.
                                    ``(II) Disclosures related to 
                                covered financing options.--The 
                                following disclosures, in a simple, 
                                plain-language, and consumer-friendly 
                                manner (based on the consumer testing 
                                under paragraph (4)):
                                            ``(aa) Grants and 
                                        scholarships.--Grants and 
                                        scholarships do not have to be 
                                        repaid.
                                            ``(bb) All loans.--All 
                                        loans must be repaid with 
                                        interest.
                                            ``(cc) Federal work-study 
                                        aid.--Any work-study employment 
                                        opportunity offered under part 
                                        C is subject to the 
                                        availability of qualified 
                                        employment opportunities and is 
                                        disbursed over time as earned 
                                        by the student.
                                    ``(III) Disclosure related to other 
                                financing options.--A disclosure that 
                                other financing options (not listed in 
                                subclause (I)) may be available, 
                                including private education loans, 
                                Federal Direct PLUS loans, or 
                                institutional or State loans, if 
                                applicable.
                                    ``(IV) Tuition payment plans.--In 
                                plain language, the offer shall include 
                                information on tuition payment plans, 
                                if applicable.
                            ``(v) Disclosure and confirmation relating 
                        to indirect costs.--A disclosure that the 
                        financing options for indirect costs selected 
                        by the student under subparagraph (C)(i) may 
                        include loans that must be repaid with 
                        interest, and a requirement for the student to 
                        confirm whether the student is seeking 
                        financial assistance for such indirect costs.
                    ``(C) Component for indirect costs.--The component 
                of a financial aid relating to indirect costs shall 
                include the following content:
                            ``(i) Selection of indirect costs.--The 
                        student shall have the ability to select each 
                        component of the cost of attendance under 
                        section 472, as amended by section 702 of the 
                        FAFSA Simplification Act (other than the direct 
                        costs determined under subparagraph (B)(i)) for 
                        which the student needs support for the 
                        academic period covered by the offer, which may 
                        include components relating to housing and 
                        food, books and supplies, transportation, and 
                        miscellaneous personal expenses.
                            ``(ii) Estimated sum of indirect costs.--
                        The estimated sum of the student's indirect 
                        costs for the academic period covered by such 
                        offer, as determined by the sum of each of the 
                        components of indirect costs selected under 
                        clause (i).
                            ``(iii) Grants and scholarships.--Any 
                        amounts of the grants and scholarships 
                        identified under subparagraph (B)(ii), which--
                                    ``(I) remain available after 
                                financing the direct costs determined 
                                under subparagraph (B)(i); or
                                    ``(II) are required to be used for 
                                indirect costs, as described in 
                                subclause (II) of subparagraph (B)(ii).
                            ``(iv) Out-of-pocket costs (relating to 
                        indirect costs).--The out-of-pocket costs 
                        (relating to indirect costs) 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, equal to--
                                    ``(I) the estimated sum of indirect 
                                costs determined under clause (ii); 
                                minus
                                    ``(II) the amount of grants and 
                                scholarships determined under clause 
                                (iii).
                            ``(v) Total cost of attendance.--The total 
                        cost of attendance for the student, equal to 
                        the sum of--
                                    ``(I) the estimated sum of the 
                                student's direct costs determined 
                                subparagraph (B)(i); and
                                    ``(II) the estimated sum of the 
                                student's indirect costs determined 
                                under clause (ii).
                            ``(vi) Total out-of-pocket costs.--The 
                        total out-of-pocket costs 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, equal to the sum of--
                                    ``(I) the out-of-pocket costs 
                                (relating to direct costs) determined 
                                under subparagraph (B)(iii); and
                                    ``(II) the out-of-pocket costs 
                                (relating to indirect costs) determined 
                                under clause (iv).
                            ``(vii) Financing options.--In plain 
                        language, the offer shall include--
                                    ``(I) each of the financing options 
                                listed under subparagraph (B)(iv)(I), 
                                which remain available after financing 
                                the direct costs determined under 
                                subparagraph (B)(i); and
                                    ``(II) the disclosures described in 
                                subclauses (II) and (III) of 
                                subparagraph (B)(iv).
                    ``(D) Required contents for both components.--Each 
                component of the offer described in clauses (i) and 
                (ii) of subparagraph (A) shall include the following 
                content:
                            ``(i) Academic period.--An indication of 
                        the academic period covered by the financial 
                        aid offer, an explanation that the financial 
                        aid offered may change for academic periods not 
                        covered by the aid offer or by program, and an 
                        indication, as applicable, about whether the 
                        costs identified under such offer are estimated 
                        based on the previous year, or are set, for the 
                        academic period covered by such offer.
                            ``(ii) Enrollment intensity.--An indication 
                        of whether cost and aid estimates are based on 
                        full-time or part-time enrollment.
                            ``(iii) Institutional grant aid.--In the 
                        case of an institution of higher education that 
                        adjusts awards of institutional grant aid based 
                        on student receipt of financial assistance not 
                        received under this title--
                                    ``(I) a statement that eligibility 
                                for institutional grant aid may be 
                                impacted by the receipt of financial 
                                assistance not received under this 
                                title (including all scholarships, 
                                grants, loans, or other assistance 
                                known to the institution at the time 
                                the determination of the student's need 
                                is made); and
                                    ``(II) the institutional policies 
                                relating to how receipt of such 
                                assistance may impact eligibility for, 
                                and the amount of, institutional grant 
                                aid.
                            ``(iv) Next step instructions.--Next step 
                        instructions, including--
                                    ``(I) the process and deadlines for 
                                accepting (and declining) the financial 
                                aid offered in the offer; and
                                    ``(II) information about where to 
                                find additional information on the 
                                financial aid offered, including 
                                contact information for the 
                                institution's financial aid office and 
                                the Department of Education's website 
                                on financial aid.
                            ``(v)  Statistics on post completion 
                        earnings and loan repayment.--
                                    ``(I) In general.--Statistics 
                                (which may be presented as monthly 
                                amounts) on the median earnings and 
                                median payments on loans made under 
                                part D (excluding Federal Direct PLUS 
                                Loans), for graduates of, or 
                                individuals who complete, the program 
                                for which the student receiving the 
                                financial aid offer is enrolled (or, in 
                                a case in which the student has not 
                                selected a program of study, for the 
                                institution).
                                    ``(II) Disclosure.--Any statistics 
                                provided under this clause shall 
                                include a disclosure that such 
                                statistics may not apply to the student 
                                receiving the offer.
                            ``(vi) Information for prospective 
                        students.--In the case of a prospective 
                        student, the process and deadlines for 
                        enrolling at the institution, if such 
                        information is determined necessary by the 
                        Secretary based on the consumer testing 
                        conducted under paragraph (4).
                            ``(vii) Delivery confirmation.-- Include a 
                        delivery confirmation for electronic financial 
                        aid offer forms, except that receipt of the 
                        forms shall not be considered an acceptance or 
                        rejection of aid.
            ``(4) Consumer testing.--The Secretary shall--
                    ``(A) conduct consumer testing that shall--
                            ``(i) serve as the basis in determining the 
                        requirements for financial aid offers published 
                        under paragraph (2); and
                            ``(ii) include students (including low-
                        income students, English learners, first 
                        generation college students, veteran students, 
                        graduate students, and undergraduate students 
                        (including prospective students and returning 
                        students)), students' families (including low-
                        income families, families of English learners, 
                        and families with first generation college 
                        students), institutions of higher education 
                        (including representatives from two- and four-
                        year institutions, public and private 
                        institutions, and minority-serving 
                        institutions), secondary school and 
                        postsecondary counselors, financial aid 
                        administrators, nonprofit college access 
                        organizations, and nonprofit consumer groups; 
                        and
                    ``(B) not later than 60 days after the publication 
                of the requirements under paragraph (2)--
                            ``(i) issue a report on the findings of the 
                        consumer testing under this paragraph; and
                            ``(ii) specify ways in which the findings 
                        are reflected in such requirements.
            ``(5) Data reporting.--Not later than 18 months after the 
        date of enactment of the College Cost Transparency and Student 
        Protection Act, the Secretary shall ensure that information 
        published on the College Scorecard website of the Department 
        (or any successor website), or the website of each institution 
        of higher education participating in any program under this 
        title--
                    ``(A) with respect to the net price or the cost of 
                attendance of an institution of higher education, 
                provides separate cost estimates for direct costs and 
                indirect costs, in a manner consist with the standard 
                terms and definitions published under paragraph (2); 
                and
                    ``(B) with respect to the median earnings or median 
                payments on loans made under this title for students 
                who complete a program of study at an institution of 
                higher education, provides such information in a manner 
                consistent with paragraph (3)(D)(v).
            ``(6) Definitions.--In this subsection--
                    ``(A) the term `cost of attendance' has the meaning 
                given the term in section 472;
                    ``(B) the term `direct costs', used with respect to 
                a student, means the costs determined under paragraph 
                (3)(B)(i) for such student;
                    ``(C) the term `English learner' has the meaning 
                given the term in section 8101(20) of the Elementary 
                and Secondary Education Act of 1965 (20 U.S.C. 
                7801(20)), except that such term does not include 
                individuals described in subparagraph (B) of such 
                section;
                    ``(D) the term `first generation college student' 
                has the meaning given the term in section 402A(h);
                    ``(E) the term `indirect costs', used with respect 
                to a student, means the costs determined under 
                paragraph (3)(C)(ii) for such student;
                    ``(F) the term `low-income student' has the meaning 
                given the term in section 419N(b)(7);
                    ``(G) the term `minority-serving institution' means 
                an institution of higher education described in section 
                371(a); and
                    ``(H) the term `private education loan' has the 
                meaning given the term in section 140 of the Truth in 
                Lending Act.''.
                                 <all>