Title: FACT Act of 2019
Policy area: Education

Summary:
Financial Aid Communication and Transparency Act of 2019 or the FACT Act of 2019
This bill requires the Department of Education (ED) to publish certain requirements for financial aid offers.
ED must conduct consumer testing to serve as the basis for determining such requirements for financial aid offers, and a financial aid offer must contain information such as cost of attendance and sources of available financial aid. An offer must also contain a standardized quick reference box to enable comparison of information on college costs and financial aid.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4343 Introduced in House (IH)]

<DOC>






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 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 ``Financial Aid Communication and 
Transparency Act of 2019'' or the ``FACT Act of 2019''.

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) Requirements for offers.--
                    ``(A) Secretarial requirements.--Not later than 18 
                months after the date of enactment of the Financial Aid 
                Communication and Transparency Act of 2019 the 
                Secretary shall, based on the consumer testing 
                conducted under subparagraph (E), publish requirements 
                for financial aid offers that shall--
                            ``(i) include a requirement that financial 
                        aid offers shall 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 prospective student 
                        accepted for admission and each enrolled 
                        student at such institution;
                            ``(ii) include a requirement that such 
                        offers include a standardized quick reference 
                        box described in subparagraph (D);
                            ``(iii) establish standardized terms and 
                        definitions, including for the elements listed 
                        in subparagraph (C), that shall be included in 
                        each such offer;
                            ``(iv) establish formatting requirements 
                        with respect to the organization of the 
                        elements listed in subparagraph (C), which 
                        shall include, at a minimum, a requirement that 
                        prohibits such offers from displaying loans in 
                        a manner that indicates or implies that such 
                        loans reduce the amount owed to the institution 
                        or reduce the net price; and
                            ``(v) specify the simple, plain-language, 
                        and consumer-friendly information to be 
                        included in each such offer with respect to the 
                        financial aid being offered to a student, which 
                        shall include--
                                    ``(I) an explanation of differences 
                                among each such type of financial aid, 
                                including clear explanations that--
                                            ``(aa) grants and 
                                        scholarships do not have to be 
                                        repaid;
                                            ``(bb) loans (including 
                                        loans made under part D and 
                                        private education loans (as 
                                        defined in section 140 of the 
                                        Truth in Lending Act)) must be 
                                        repaid with interest; and
                                            ``(cc) payments under 
                                        Federal work-study programs 
                                        under part C are contingent on 
                                        finding qualified employment 
                                        and are typically disbursed 
                                        incrementally in paychecks;
                                    ``(II) information clarifying that 
                                students may--
                                            ``(aa) decline to accept a 
                                        loan made under part D; or
                                            ``(bb) accept an amount of 
                                        such loan that is less than the 
                                        amount of such loan included in 
                                        the financial aid offer; and
                                    ``(III) in a case in which the 
                                institution offers a student such a 
                                loan in an amount that is less than the 
                                maximum amount for which the student is 
                                eligible, an explanation that the 
                                student is eligible for additional 
                                loans under part D.
                    ``(B) Institutional requirements.--Beginning with 
                the award year that begins not less than 1 year after 
                the Secretary publishes requirements under subparagraph 
                (A), each institution of higher education described in 
                subparagraph (A)(i) shall provide a financial aid offer 
                to each student described in such subparagraph prior to 
                each academic year that--
                            ``(i) shall comply with the requirements 
                        published by the Secretary under subparagraph 
                        (A); and
                            ``(ii) 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 
                        subparagraph (A)(iii).
                    ``(C) Elements.--A financial aid offer provided by 
                an institution of higher education shall include the 
                following elements with respect to the academic year 
                for which the offer is being provided:
                            ``(i) The cost of attendance, which shall 
                        include separately calculated subtotals of--
                                    ``(I) an itemized list of estimated 
                                direct costs owed to the institution; 
                                and
                                    ``(II) an itemized list of 
                                anticipated student expenses not 
                                covered under subclause (I).
                            ``(ii) Federal, State, and institutional 
                        financial aid available to the student, which 
                        shall include separately calculated subtotals 
                        of--
                                    ``(I) grants and scholarships;
                                    ``(II) loans made under part D 
                                (excluding Federal Direct Parent PLUS 
                                Loans); and
                                    ``(III) Federal work-study programs 
                                under part C and other on-campus 
                                employment.
                            ``(iii) Other options that may be available 
                        to students to cover the cost of attendance 
                        (including Federal Direct Parent PLUS Loans, 
                        tuition payment plans, savings, and earnings 
                        from other employment).
                            ``(iv) The net price, which shall be 
                        determined by calculating the difference 
                        between--
                                    ``(I) the cost of attendance 
                                described in clause (i); and
                                    ``(II) the grants and scholarships 
                                described in clause (ii)(I).
                            ``(v) Next step instructions, including--
                                    ``(I) the process and deadlines for 
                                accepting the financial aid; and
                                    ``(II) information about where to 
                                find additional information on the 
                                financial aid offered.
                            ``(vi) Any other information determined 
                        necessary by the Secretary based on the 
                        consumer testing conducted under subparagraph 
                        (E), which may include the following:
                                    ``(I) An estimate of the net direct 
                                cost, which shall be determined by 
                                calculating the difference between--
                                            ``(aa) the direct costs 
                                        owed to the institution 
                                        described in clause (i)(I); and
                                            ``(bb) the grants and 
                                        scholarships described in 
                                        clause (ii)(I).
                                    ``(II) Information on average 
                                student debt, loan repayment and 
                                default rates, loan repayment options, 
                                and graduation rates.
                                    ``(III) In the case of a 
                                prospective student, the process and 
                                deadlines for enrolling at the 
                                institution.
                                    ``(IV) Information regarding the 
                                enrollment period covered by the aid 
                                offer, and whether the cost and aid 
                                estimates are based on full-time or 
                                part-time enrollment.
                    ``(D) Standardized quick reference box.--A 
                financial aid offer provided by an institution of 
                higher education shall include a standardized quick 
                reference box to enable students to quickly and easily 
                compare key information on college costs and financial 
                aid--
                            ``(i) that shall be included in an 
                        identical fashion for each student receiving a 
                        financial aid offer from the institution on the 
                        first page of such offer;
                            ``(ii) the contents and structure of which 
                        shall be developed through consumer testing 
                        conducted under paragraph (E); and
                            ``(iii) shall include three data elements:
                                    ``(I) Cost of attendance.
                                    ``(II) Total grants and 
                                scholarships offered.
                                    ``(III) Net price.
                    ``(E) Consumer testing.--The Secretary shall--
                            ``(i) conduct consumer testing that shall 
                        serve as the basis in determining the 
                        requirements for financial aid offers published 
                        under subparagraph (A), which shall 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
                            ``(ii) not later than 60 days after the 
                        publication of the requirements under 
                        subparagraph (A)--
                                    ``(I) issue a report on the 
                                findings of the consumer testing under 
                                this subparagraph; and
                                    ``(II) specify ways in which the 
                                findings are reflected in such 
                                requirements.
            ``(2) Definitions.--In this subsection--
                    ``(A) the term `cost of attendance' has the meaning 
                given the term in section 472;
                    ``(B) 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;
                    ``(C) the term `first generation college student' 
                has the meaning given the term in section 402A(h);
                    ``(D) the term `low-income student' has the meaning 
                given the term in section 419N(b)(7); and
                    ``(E) the term `minority-serving institution' means 
                an institution of higher education described in section 
                371(a).''.
                                 <all>