[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 1558 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
1st Session
S. 1558
To require a standard financial aid offer form, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
May 1, 2025
Mr. Grassley (for himself, Ms. Smith, Ms. Hassan, and Mr. Tuberville)
introduced the following bill; which was read twice and referred to the
Committee on Health, Education, Labor, and Pensions
_______________________________________________________________________
A BILL
To require a standard financial aid offer form, 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 ``Understanding the True Cost of
College Act of 2025''.
SEC. 2. FINANCIAL AID OFFER FORM.
Section 484 of the Higher Education Opportunity Act (20 U.S.C. 1092
note) is amended to read as follows:
``SEC. 484. FINANCIAL AID OFFER FORM.
``(a) Standard Form and Terminology.--The Secretary of Education,
in consultation with the heads of relevant Federal agencies, shall
develop standard terminology and a standard form for financial aid
offers based on recommendations from representatives of students,
veterans, servicemembers, students' families, institutions of higher
education (including community colleges, for-profit institutions, 4-
year public institutions, and 4-year private nonprofit institutions),
financial aid experts, secondary school and postsecondary counselors,
college access professionals, nonprofit organizations, and consumer
groups.
``(b) Key Required Contents for Aid Offer.--The standard form
developed pursuant to subsection (a) shall be titled `Financial Aid
Offer' and shall include the following items in a consumer-friendly
manner that is simple and understandable, with costs listed first
followed by grants and scholarships, clearly separated from each other
with separate headings:
``(1) Cost information.--
``(A) In general.--Information on the student's
estimated cost of attendance, including the following:
``(i) Direct costs.--The total cost of all
items described in section 472 of the Higher
Education Act of 1965 (20 U.S.C. 1087ll) that
are billed to the student by the institution or
otherwise required by the institution for
enrollment, including such total cost
disaggregated by the cost of each such item,
including, as determined under such section--
``(I) tuition and fees (and other
required expenses); and
``(II) housing and food for a
student participating in
institutionally owned or operated food
services or institutionally owned or
operated housing.
``(ii) Indirect costs.--The total cost of
all items described in section 472 of the
Higher Education Act of 1965 (20 U.S.C. 1087ll)
that are not billed to the student by the
institution or otherwise required by the
institution for enrollment, including such
total cost disaggregated by the cost of each
such item, including, as determined under such
section--
``(I) the component totals each for
housing and food costs for students who
reside off-campus or off campus with
family;
``(II) books, supplies, equipment,
course materials, and rental or
purchase of a personal computer; and
``(III) transportation.
``(B) Academic period.--The academic period covered
by the Financial Aid Offer, and an explanation that the
amount of financial aid offered may change--
``(i) for academic periods not covered by
the Financial Aid Offer; or
``(ii) by program.
``(C) Enrollment status.--An indication of whether
cost and aid estimates are based on full-time or part-
time enrollment.
``(D) Estimated or set.--An indication, as
applicable, about whether the tuition and fees are
estimated based on the previous year, or are set, for
the academic period indicated in accordance with
subparagraph (B).
``(2) Grants and scholarships.--The aggregate amount of
grants and scholarships, differentiated by source, that the
student does not have to repay, such as grant aid offered under
title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et
seq.) and grant aid offered through other Federal programs,
grant and scholarship aid offered by the institution, grant and
scholarship aid offered by the State, and, if known, grant and
scholarship aid from an outside source to the student for such
academic period, including--
``(A) a disclosure that the grants and scholarships
do not have to be repaid; and
``(B) if institutional aid is included--
``(i) the conditions under which the
student can expect to receive similar amounts
of such financial aid for each academic period
the student is enrolled at the institution; and
``(ii) whether the institutional 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 aid will change.
``(3) Net price.--
``(A) In general.--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, equal to--
``(i) the cost of attendance as described
in paragraph (1)(A) for the student for the
period indicated in paragraph (1)(B); minus
``(ii) the amount of grant and scholarship
aid described in paragraph (2) that is included
in the Financial Aid Offer.
``(B) Disclosure.--A disclosure that the net price
is an estimate of the total expenses for the year and
not equivalent to the amount the student will owe
directly to the institution.
``(4) Loans.--
``(A) In general.--Information on any loan under
part D of title IV of the Higher Education Act of 1965
(20 U.S.C. 1087a et seq.; 20 U.S.C. 1087aa et seq.)
(except a Federal Direct PLUS Loan under part D of that
Act) that the institution recommends for the student
for the academic period covered by the Financial Aid
Offer, which shall be made--
``(i) with clear use of the word `loan' to
describe the recommended loan amounts; and
``(ii) with clear labeling of subsidized
and unsubsidized loans.
``(B) Disclosure on repayment.--A disclosure that
such loans have to be repaid and a disclosure that the
student can borrow a lesser or, if applicable, greater
amount than the recommended loan amount.
``(C) Disclosure on interest rates and fees.--A
disclosure that the interest rates and fees on such
loans are set annually and affect total cost over time,
and a link to a Department of Education website that
includes current information on interest rates and
fees.
``(D) Link to repayment calculator.--A link to the
Department of Education's repayment calculator website
for students with instruction that this website
contains customizable estimates of expected repayment
costs under different loan repayment plans.
``(5) Process for accepting, adjusting, or declining aid
and next steps.--
``(A) In general.--The deadlines and a summary of
the process (including the next steps) for--
``(i) accepting the financial aid offered;
``(ii) adjusting the amount of financial
aid offered; and
``(iii) declining the financial aid
offered.
``(B) Information on paying costs.--Information on
when and how costs described in paragraph (1)(A)(i)
must be paid, including a clear indication of whether
such cost is required or optional for the student.
``(C) Disclosure on verification of information.--A
disclosure that verification of information provided on
the Free Application for Federal Student Aid may
require the student to submit further documentation.
``(D) Contact information.--Information about 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.
``(6) Additional information.--Any other information the
Secretary of Education, in consultation with the heads of
relevant Federal agencies, including the Secretary of the
Treasury and the Director of the Bureau of Consumer Financial
Protection, determines necessary (based on the results of the
consumer testing under subsection (g)(2)) so that students and
parents can make informed loan borrowing decisions, which may
include--
``(A) the most recent cohort default rate, as
defined in section 435(m) of the Higher Education Act
of 1965 (20 U.S.C. 1085(m)), with respect to an
institution where more than 30 percent of enrolled
students borrow loans to pay for their education, and a
comparison to the national average cohort default rate;
``(B) the percentage of students at the institution
who borrow student loans;
``(C) the median loan debt at graduation for
students at the institution (clearly marked as
including only Federal loans if private loan data are
not available to be included); and
``(D) any additional calculations determined
necessary for ensuring that students understand full
college costs, financial aid gaps, and options for
covering those gaps.
``(c) Other Required Contents for Financial Aid Offer.--The
standard form developed under subsection (a) shall include, in addition
to the information described in subsection (b), to be included on the
Financial Aid Offer in a concise format determined by the Secretary of
Education, in consultation with the heads of relevant Federal agencies
and the individuals and entities described in subsection (a), the
following information:
``(1) Additional options.--At the institution's
discretion--
``(A) additional options and potential resources
for paying for the amount listed in subsection (b)(3),
such as tuition payment plans and the terms and
conditions of those plans; and
``(B) a disclosure that Federal Direct PLUS Loans
made under part D of title IV of the Higher Education
Act of 1965 (20 U.S.C. 1087a et seq.), private
education loans, or other financing products may be
available to cover remaining need, except that the
institution--
``(i) may not include an amount for such
Federal Direct PLUS Loans, private education
loans, or other financing products; and
``(ii) shall include a disclosure that such
loans and agreements--
``(I) are subject to an additional
application process and have to be
repaid by the borrower; and
``(II) may not be eligible for all
the benefits available for Federal
Direct Stafford Loans or Federal Direct
Unsubsidized Stafford Loans.
``(2) Information on private education loans and other
financing products.--The following information relating to
private education loans and other financing products:
``(A) A disclosure that students considering
borrowing to cover the cost of attendance should
consider available Federal student loans prior to
applying for private education loans or other financing
products, including an explanation that Federal student
loans offer generally more favorable terms and
beneficial repayment options than private education
loans and other financing products.
``(B) The impact of a proposed private education
loan or other financing product 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) A statement explaining the student's ability
to select a private educational lender or other
financing product provider of the student's choice.
``(3) Student employment.--Information on work-study
employment opportunities offered in accordance with part C of
title IV of the Higher Education Act of 1965 (20 U.S.C. 1087-51
et seq.), institutional work-study programs, or State work-
study programs, including--
``(A) the maximum annual amount the student may
earn through the program; and
``(B) a disclosure that any work-study amount
offered may be--
``(i) subject to the availability of
qualified employment opportunities upon the
student's enrollment; and
``(ii) disbursed over time as earned by the
student.
``(d) Additional Requirements for Financial Aid Offers.--Each
Financial Aid Offer shall meet the following requirements:
``(1) Include, in addition to the requirements described in
subsections (b) and (c), a concise summary, in plain language,
of--
``(A) the terms and conditions of financial aid
recommended under paragraphs (2) and (4) of subsection
(b) and subsection (c)(3), and a method to provide
students with additional information about such terms
and conditions, such as links to the supplementary
information; and
``(B) Federal, State, 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.
``(2) Clearly distinguish between the aid offered under
paragraphs (2) and (4) of subsection (b) and subsection (c)(3),
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.
``(3) Use standard terminology and definitions, as
described in subsection (e)(1) and use plain language where
possible.
``(4) If an institution's recommended Federal student loan
aid offered in subsection (b)(4) 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 web page.
``(5) Use the standard offer form described in subsection
(e)(2).
``(6) Include the standardized statement regarding the
possible availability of Federal education benefits, as
established by the Secretary in accordance with subsection
(e)(3).
``(7) Include a delivery confirmation for electronic
Financial Aid Offers, except that receipt of the Financial Aid
Offer shall not be considered an acceptance or rejection of aid
by the student.
``(8) With respect to dependent students, any reference to
private education loans shall be accompanied by--
``(A) information about 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
``(B) a notification 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.
``(e) Standard Information Established by the Secretary.--
``(1) Standard terminology and definitions.--Not later than
3 months after the date of enactment of the Understanding the
True Cost of College Act of 2025, the Secretary of Education,
in consultation with the heads of relevant Federal agencies,
including the Secretary of the Treasury and the Director of the
Consumer Financial Protection Bureau, and the individuals and
entities described in subsection (a), shall establish standard
terminology and definitions for the terms described in
subsection (b).
``(2) Standard form.--
``(A) In general.--The Secretary of Education shall
develop multiple draft financial aid offer forms for
consumer testing, carry out consumer testing for such
forms, and establish a finalized standard financial aid
offer form, in accordance with the process established
under subsection (g) and the requirements of this
section.
``(B) Separate financial aid offer forms.--The
Secretary may develop separate financial aid offer
forms for--
``(i) undergraduate students and graduate
students; and
``(ii) first-time students and returning
students.
``(3) Additional benefits.--The Secretary of Education, in
consultation with the heads of relevant Federal agencies,
including the Secretary of the Treasury, the Secretary of
Veterans Affairs, the Secretary of Defense, and the Director of
the Consumer Financial Protection Bureau, shall establish
standard language notifying students that they may be eligible
for education benefits (and where students can locate more
information about such benefits) including benefits in
accordance with each of the following:
``(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.
``(f) Supplemental Information; Removal of Information.--
``(1) Supplemental information.--Nothing in this section
shall preclude an institution from supplementing the Financial
Aid Offer with additional information if such additional
information utilizes the same standard terminology identified
in subsection (e)(1) and does not misrepresent costs, financial
aid offered, or net price.
``(2) Removal of information.--Nothing in this section
shall preclude an institution from deleting a required item on
a Financial Aid Offer if--
``(A) the student is ineligible for such item;
``(B) the institution does not participate in the
program related to such item; or
``(C) the cost of attendance item is not applicable
to the student.
``(g) Development of Financial Aid Offer Form.--
``(1) Draft form.--Not later than 9 months after the date
of enactment of the Understanding the True Cost of College Act
of 2025, the Secretary of Education, in consultation with the
heads of relevant Federal agencies, including the Secretary of
the Treasury and the Director of the Consumer Financial
Protection Bureau, and the individuals and entities described
in subsection (a), shall design and produce multiple draft
financial aid offer forms for consumer testing with
postsecondary students or prospective students. In developing
that form, the Secretary shall ensure--
``(A) that the headings described in paragraphs (1)
through (4) of subsection (b) are in the same font,
appear in the same order, and are displayed prominently
on the financial aid offer form, such that none of that
information is inappropriately omitted or de-
emphasized;
``(B) that the other information required in
subsection (b) appears in a standard format and design
on the Financial Aid Offer; and
``(C) that the institution may include a logo or
brand alongside the title of the Financial Aid Offer.
``(2) Consumer testing.--
``(A) In general.--Not later than 9 months after
the date of enactment of the Understanding the True
Cost of College Act of 2025, the Secretary of
Education, in consultation with the heads of relevant
Federal agencies, shall establish a process to submit
the financial aid offer form drafts developed under
paragraph (1) for consumer testing among
representatives of students (including low-income
students, first-generation college students, adult
students, veterans, servicemembers, 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.
``(B) Pilot.--During such consumer testing, the
Secretary shall ensure that not less than 16 and not
more than 24 eligible institutions use the draft forms
developed under paragraph (1), including institutions--
``(i) that reflect a proportionate
representation (based on the total number of
students enrolled in postsecondary education)
of community colleges, for-profit institutions,
4-year public institutions, and 4-year private
nonprofit institutions; and
``(ii) that reflect geographic diversity.
``(C) Length of consumer testing.--The Secretary of
Education shall ensure that the consumer testing under
this paragraph lasts no longer than 8 months after the
process for consumer testing is developed under
subparagraph (A).
``(3) Final form.--
``(A) In general.--The results of consumer testing
under paragraph (2) shall be used in the final
development of the financial aid offer form.
``(B) Reporting requirement.--Not later than 3
months after the date the consumer testing under
paragraph (2) concludes, the Secretary of Education
shall submit to Congress and publish on its website the
final standard financial aid offer form and a report
detailing the results of such testing, including
whether the Secretary of Education added any additional
items to the standard financial aid offer form pursuant
to subsection (b)(6).
``(4) Authority to modify.--The Secretary of Education may
modify or remove the definitions, terms, formatting, or design
of the financial aid offer form based on the results of
consumer testing required under this subsection and before
finalizing the form, or in subsequent consumer testing. The
Secretary may also recommend additional changes to Congress.''.
SEC. 3. 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 AND TERMS.
``(a) In General.--Notwithstanding any other provision of law, each
institution of higher education that receives Federal financial
assistance under this Act shall--
``(1) use the financial aid offer form developed under
section 484 of the Higher Education Opportunity Act (20 U.S.C.
1092 note) in providing paper, mobile-optimized offers, or
other electronic offers to all students who apply for aid and
are accepted at the institution; and
``(2) use the standard terminology and definitions
developed by the Secretary of Education under subsection (e)(1)
of such section 484 for all communications from the institution
related to Financial Aid Offers.
``(b) Effective Dates.--The requirements under this section shall
take effect at the start of the first award year after the Secretary of
Education finalizes the standard terminology and form developed in
accordance with section 484 of the Higher Education Opportunity Act (20
U.S.C. 1092 note).
``(c) Administrative Procedures.--Section 492 shall not apply with
respect to regulations promulgated in accordance with this section.''.
<all>