119-hr3153

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3153 Introduced in House

    (IH) ]

<DOC>

119th CONGRESS
 1st Session
 H. R. 3153

To require a standard financial aid offer form, and for other purposes.

_______________________________________________________________________

 IN THE HOUSE OF REPRESENTATIVES

 May 1, 2025

Mrs. Kim (for herself and Mr. Krishnamoorthi) introduced the following 
 bill; which was referred to the Committee on Education and Workforce

_______________________________________________________________________

 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.) (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;
 ``
            (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.''.
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