S. 4435

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 4435 Introduced in Senate (IS)]

<DOC>

119th CONGRESS
2d Session
S. 4435

To establish requirements for financial aid offers made by institutions 
of higher education, and for other purposes.

_______________________________________________________________________

IN THE SENATE OF THE UNITED STATES

April 29, 2026

Mr. Cassidy (for himself and Mr. Grassley) introduced the following 
bill; which was read twice and referred to the Committee on Health, 
Education, Labor, and Pensions

_______________________________________________________________________

A BILL

To establish requirements for financial aid offers made by institutions 
of higher education, 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 ``Improving Financial Aid Offers for 
Students Act''.

SEC. 2. FINANCIAL AID OFFER REQUIREMENTS.

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 REQUIREMENTS.

``(a) Financial Aid Offer.--In this section, the term `financial 
aid offer' means a document or electronic notification that is provided 
or made available by a postsecondary educational institution to a 
student (or prospective student) that outlines the amounts and details 
of the financial aid being offered to the student (or prospective 
student), which may include scholarships, grants, loans, employment, or 
other forms of financial assistance, to pay for expenses related to 
attending the institution.
``(b) Standard Terminology and Model Form.--The Secretary of 
Education, in consultation with the heads of relevant Federal agencies 
and in accordance with subsections (g) and (h), shall develop standard 
terminology and a model form for financial aid offers based on 
recommendations from representatives of students, veterans, 
servicemembers, students' families, institutions of higher education 
(including 2-year public institutions, 2-year private nonprofit 
institutions, for-profit institutions, 4-year public institutions, and 
4-year private nonprofit institutions), higher education associations, 
financial aid experts, financial aid administrators, secondary school 
and postsecondary counselors, college access professionals, nonprofit 
organizations, and consumer groups. Such model form shall meet the 
requirements of subsections (c) and (d) and use the standard 
terminology developed pursuant to subsection (g)(1).
``(c) Key Required Contents for Aid Offer.--An institution of 
higher education receiving Federal financial assistance under the 
Higher Education Act of 1965 (20 U.S.C. 1001 et seq.) shall use a 
financial aid offer that includes the following items in a consumer-
friendly manner that is simple and understandable, with costs listed 
first, followed by grants and scholarships, and with each of the 
following categories of information 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 (if 
such expenses are not charged with 
tuition and fees); 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, to the 
extent practicable, how that aid may 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, or other 
applicable financial aid applications, 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.
``(d) Optional Contents for Financial Aid Offer.--A financial aid 
offer made by an institution of higher education receiving Federal 
financial assistance under the Higher Education Act of 1965 (20 U.S.C. 
1001 et seq.) may include, at the institution's discretion, the 
information described in paragraphs (1), (2), or (3). If an institution 
does include information described in paragraph (1), (2), or (3), such 
information shall meet the requirements of the applicable paragraphs.
``(1) Additional options.--Any of the following, which, if 
included, shall comply with the requirements of this paragraph:
``(A) Additional options and potential resources 
for paying for the amount listed in subsection (c)(3), 
such as tuition payment plans and the terms and 
conditions of those plans.
``(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--
``(i) the institution may not include an 
amount for such Federal Direct PLUS Loans, 
private education loans, or other financing 
products, except as part of a revised or 
updated offer provided after such loan or 
financing product has been requested by the 
student or parent and approved or certified;
``(ii) if a Federal Direct PLUS Loan, 
private education loan, or other financing 
product amount is included in accordance with 
clause (i), the institution shall not represent 
the amount of such a loan or financing product 
in a manner in which that amount is commingled 
with the amount of other forms of financial 
assistance, such as those described in 
paragraphs (2) and (4) of subsection (c); and
``(iii) the institution 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.
``(C) Information about the net bill, which--
``(i) is defined as the amount the student, 
or the student's family on behalf of the 
student, is estimated to have to pay directly 
to the institution for the academic period, 
equal to--
``(I) the direct costs of attending 
the covered institution as described in 
subsection (c)(1)(A)(i); minus
``(II) the amount of grant and 
scholarship aid described in subsection 
(c)(2) that is included in the 
financial aid offer; and
``(ii) shall include a clear explanation of 
how this net bill amount differs from the net 
price amount described in subsection (c)(3).
``(2) Information on private education loans and other 
financing products.--Information relating to private education 
loans and other financing products, which, if included, shall 
contain the following:
``(A) A disclosure that students considering 
borrowing to cover the cost of attendance should 
consider available Federal student loans and compare 
the terms and repayment options prior to accepting 
private education loans or other financing products, 
including an explanation that Federal student loans 
generally offer more flexible repayment and forgiveness 
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, which, if included shall contain the following:
``(A) The maximum annual amount the student may 
earn through the program.
``(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.
``(e) Additional Requirements for Financial Aid Offers.--Each 
financial aid offer made by an institution of higher education 
receiving Federal financial assistance under the Higher Education Act 
of 1965 (20 U.S.C. 1001 et seq.) shall meet the following requirements:
``(1) The financial aid offer shall include, in addition to 
the requirements described in subsection (c), a concise 
summary, in plain language, of--
``(A) the terms and conditions of financial aid 
recommended under paragraphs (2) and (4) of subsection 
(c) (and subsection (d)(3), if included), 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) The financial aid offer shall clearly distinguish 
between the aid offered under subsection (c)(2), subsection 
(c)(4), and subsection (d)(3) (if included), 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) The financial aid offer shall use standard 
terminology and definitions, as described in subsection (g)(1) 
and use plain language where possible.
``(4) If an institution's recommended Federal student loan 
aid offered in subsection (c)(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) The financial aid offer shall include the 
standardized statement regarding the possible availability of 
Federal education benefits, as established by the Secretary in 
accordance with subsection (g)(2).
``(6) With respect to dependent students, any reference to 
private education loans in the financial aid offer shall be 
accompanied by--
``(A) information about the availability of, and 
terms and conditions associated with, Federal Direct 
PLUS Loans under part D of title IV of the Higher 
Education Act of 1965 (20 U.S.C. 1087a et seq.) for the 
student's parents regardless of family income; and
``(B) a notification of the student's increased 
eligibility for Federal student loans under part D of 
such title if the student's parents are not able to 
borrow under the Federal Direct PLUS Loan program under 
part D of such title.
``(7) The financial aid offer shall include an explanation 
of how the indirect costs included in the financial aid offer 
pursuant to subsection (c)(1)(A)(ii) are estimated, and a 
disclosure that the student's actual costs for these items may 
differ from the estimated costs.
``(8) The financial aid offer shall not include any net 
price information except cost of attendance information in 
accordance with subsection (c)(1), net price information in 
accordance with subsection (c)(3), or (as applicable) net bill 
information in accordance with subsection (d)(1)(C).
``(9) The financial aid offer shall not be titled or 
otherwise referred to as an `award'.
``(f) Supplemental Information; Removal of Information.--
``(1) Supplemental information.--Nothing in this section 
shall preclude an institution of higher education receiving 
Federal financial assistance under the Higher Education Act of 
1965 (20 U.S.C. 1001 et seq.) from supplementing the financial 
aid offer with additional information if such additional 
information utilizes the same standard terminology identified 
in subsection (g)(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) Standard Terminology and Definitions; Additional Benefits.--
``(1) Standard terminology and definitions.--Not later than 
9 months after the date of enactment of the Improving Financial 
Aid Offers for Students Act, 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 (b), shall establish standard 
terminology and definitions for the terms described in 
subsections (c) and (d).
``(2) 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.
``(3) Authority to modify.--The Secretary of Education may 
modify the standard terminology and definitions for the terms 
described in subsections (c) and (d) if such modifications are 
made after consultation with the individuals and entities 
described in subsection (b) and are issued not less than 12 
months before the Free Application for Federal Student Aid for 
the affected award year first becomes available.
``(h) Development of Model Financial Aid Offer Form.--
``(1) Model 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 model financial aid 
offer form, in accordance with the process established 
under this subsection and the requirements of this 
section.
``(B) Separate financial aid offer forms.--The 
Secretary may develop separate model financial aid 
offer forms for--
``(i) undergraduate students and graduate 
students; and
``(ii) first-time students and returning 
students.
``(2) Draft model form.--Not later than 1 year after the 
date of enactment of the Improving Financial Aid Offers for 
Students Act, 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 (b), shall design and produce multiple draft 
financial aid offer forms for consumer testing with 
postsecondary students or prospective students. In developing 
those forms, the Secretary shall ensure--
``(A) that the headings described in paragraphs (1) 
through (4) of subsection (c) 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 (c) 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.
``(3) Consumer testing.--
``(A) In general.--Not later than 1 year after the 
date of enactment of the Improving Financial Aid Offers 
for Students Act, the Secretary of Education, in 
consultation with the heads of relevant Federal 
agencies, shall establish a process for consumer 
testing of the draft model forms developed under 
paragraph (2) 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 may conduct a pilot in which eligible 
institutions, on a voluntary basis, use the draft forms 
developed under paragraph (2).
``(C) Length of consumer testing.--The Secretary of 
Education shall ensure that the consumer testing under 
this paragraph lasts no longer than 1 year after the 
process for consumer testing is developed under 
subparagraph (A).
``(4) Final model form.--
``(A) In general.--The results of consumer testing 
under paragraph (3) shall be used in the final 
development of the model financial aid offer form.
``(B) Reporting requirement.--Not later than 3 
months after the date the consumer testing under 
paragraph (3) concludes, the Secretary of Education 
shall submit to Congress and publish on its website the 
final model 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 model financial aid offer.
``(5) Authority to modify.--The Secretary of Education may 
modify or remove the definitions, terms, formatting, or design 
of the model financial aid offer form based on the results of 
consumer testing required under this subsection and before 
finalizing the model form, or in subsequent consumer testing. 
The Secretary may also recommend additional changes to 
Congress.''.

SEC. 3. MANDATORY USE OF TERMS; FINANCIAL AID OFFER FORM REQUIREMENTS.

(a) In General.--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 TERMS.

``(a) In General.--Notwithstanding any other provision of law, each 
institution of higher education that receives Federal financial 
assistance under this Act shall use the standard terminology and 
definitions developed by the Secretary of Education under subsection 
(g)(1) of section 484 of the Higher Education Opportunity Act (20 
U.S.C. 1092 note) for all communications from the institution related 
to financial aid offers (as defined in subsection (a) of such section), 
regardless of whether such communications are electronic, written, or 
through another medium.
``(b) Effective Date.--The requirements under this section shall 
take effect on the first date on which the Secretary releases the Free 
Application for Federal Student Aid for the applicable award year 
associated with that application, that occurs later than 1 year after 
the Secretary of Education finalizes the standard terminology and model 
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.

``SEC. 125. REQUIREMENTS FOR FINANCIAL AID OFFER FORMS.

``(a) In General.--Beginning on July 1 following the effective date 
of section 124, and annually thereafter, each institution of higher 
education that receives Federal financial assistance under this Act 
shall submit to the Secretary a template of the form (without any 
student data) that the institution uses for financial aid offers (as 
defined in section 484(a) of the Higher Education Opportunity Act) to 
enrolled and prospective students. Institutions that use electronic 
systems to communicate financial aid offers may submit digital 
representations (such as screenshots) of those systems.
``(b) Forms.--Such institutions shall--
``(1) use the model financial aid offer form developed 
pursuant to section 484(h) of the Higher Education Opportunity 
Act (20 U.S.C. 1092 note); or
``(2) use the institution's own form for financial aid 
offers if that form meets the requirements of subsections (c), 
(d), and (e) of such section and uses the required terminology 
and definitions in accordance with section 124.
``(c) Public Availability.--The Secretary shall make each template 
received under this section publicly available.''.
(b) Financial Aid Offer Compliance.--Section 485(a) of the Higher 
Education Act of 1965 (20 U.S.C. 1092(a)) is amended by adding at the 
end the following:
``(8) Each eligible institution participating in any 
program under this title shall ensure that any financial aid 
offer (as defined in section 484(a) of the Higher Education 
Opportunity Act) communicated to a prospective or enrolled 
student complies with the requirements of sections 124 and 
125.''.

SEC. 4. GAO STUDY.

Not later than 1 year after the date on which the financial aid 
offer form templates of institutions of higher education are submitted 
to the Secretary of Education in accordance with section 125 of the 
Higher Education Act of 1965, as added by section 3 of this Act, the 
Comptroller General of the United States shall prepare and submit to 
Congress, and make publicly available, an initial study of such 
financial aid offer form templates, and 3 years after the initial study 
is submitted to Congress, the Comptroller General shall submit a final 
study examining such templates. Both studies shall include 
recommendations about how to improve such templates, as appropriate. 
Additional studies of such financial aid offer form templates may be 
conducted, as determined necessary by the Comptroller General or the 
Chair or Ranking Member of the Committee on Health, Education, Labor, 
and Pensions of the Senate or the Committee on Education and Workforce 
of the House of Representatives.

SEC. 5. RULES OF CONSTRUCTION.

(a) No Authorization for Approval or Mandated Forms.--Nothing in 
this Act, or the amendments made by this Act, shall be construed to 
authorize the Secretary of Education to--
(1) require that a postsecondary educational institution 
receive approval from the Department of Education, or any other 
Federal agency, for the institution's financial aid offer; or
(2) regulate or require a mandated standard financial aid 
offer.
(b) Additional Resources.--Any requirements in this Act, and the 
amendments made by this Act, for a financial aid offer to contain 
certain information may be satisfied through the inclusion of specific 
and relevant website links or additional resources that contain such 
information, provided that the dollar amounts of direct and indirect 
costs (as described in paragraph (1) of subsection (c) of section 484 
of the Higher Education Opportunity Act (20 U.S.C. 1092 note)), grants 
and scholarships (as described in paragraph (2) of such subsection), 
and net price (as described in paragraph (3) of such subsection) are 
stated in the financial aid offer.
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