Press Releases

Representatives Trahan and Smucker Introduce the Bipartisan Financial Aid Communication and Transparency (FACT) Act

“Legislation endorsed by National Association of Student Financial Aid Administrators (NASFAA), National College Access Network (NCAN), National Association for College Admission Counseling (NACAC), and supported by uAspire”

Washington, September 17, 2019

WASHINGTON, DC – Today, Representatives Lori Trahan (D-MA) and Lloyd Smucker (R-PA) introduced the bipartisan Financial Aid Communication and Transparency (FACT) Act, H.R. 4343. This legislation ensures that all students receive clear, comparable financial aid offers from each institution they’re accepted to attend and during every year of enrollment. 

 

Every year, college students across the U.S. navigate an unnecessarily complex path to postsecondary education.  After going through the college search and application process and filling out the Free Application for Federal Student Aid (FAFSA), students receive financial aid offers from the colleges they’re accepted to, but all too often these offers include unclear or even misleading information about the cost of attendance and their options for financing it. This confusion makes it difficult for students to understand how much they’re going to pay for school, and nearly impossible for them to compare costs and aid packages across multiple institutions.  Additionally, costs and financial aid can change year to year, and the lack of clarity in aid offers means that students are often caught by surprise when tuition rises, or a grant expires.

 

“A college education will be one of the biggest financial investments many families or individuals will ever make. As the costs of higher education continue to skyrocket, prospective students are often choosing schools without a clear understanding of the investment because of confusing and misleading financial aid information. Standardizing the way institutions present this information will empower students to make decisions that are right for them, without rolling the dice on their financial security,” said Congresswoman Trahan. “As the first person in my family to graduate from college, I vividly remember the confusion that surrounded the process of receiving and deciphering aid packages. I’m proud to introduce this legislation to make applying for college more accessible, transparent, and convenient for families.”

 

“While there are many elements of our current higher education system that can and should work better for students, making sure a student receives information about the scholarships and financial aid that is available to them in a very clear and consistent manner is a vitally important first step Congress can take to ensuring students can make the best possible financial decisions for their futures. Currently, inconsistent formatting that varies at each institution of higher education has led to borrower confusion and not provided each potential student with the most relevant information necessary for making an informed financial commitment. The FACT Act will address these inconsistencies by streamlining the award letter process and ensuring only the most valuable consumer information is presented to students in a clear and concise manner. The changes this legislation makes will help the next generation gain a deeper understanding of the true cost of attendance, and ultimately make sure students can make the best decision for their education,” said Congressman Smucker.

 

“Financial aid offers play a critical role in helping students and families understand how to pay for college. It is equally critical that aid offers are transparent and provided in a way that helps students truly understand what they will pay today, and into the future. While NASFAA has required member institutions to meet many of these standards for years, we appreciate the compounding and amplifying positive effect that this bill would have on thousands of schools and millions of students. We applaud Representatives Trahan and Smucker, and urge Congress to take swift action on this bill,” said Justin Draeger, President & CEO, National Association of Student Financial Aid Administrators (NASFAA).

 

“The standard terms and formatting required by the FACT Act represent a tremendous step forward in making the cost of college more transparent for students,” said Kim Cook, executive director of National College Access Network. “Making clear the difference between free money, loans or fees owed to the institution, and out-of-pocket expenses will help students make better-informed decisions when choosing a college.”

 

“The National Association for College Admission Counseling is pleased to support the Financial Aid Communication and Transparency (FACT) Act,” said David Hawkins, NACAC’s executive director for educational content and policy.  “We hear too often that students, parents, and high school counselors have difficulty deciphering the financial aid award letters they receive from colleges.  This legislation, introduced by Representatives Trahan and Smucker, will streamline and make financial aid award letters easier to understand.  NACAC encourages Congress to pass this legislation.”

 

"Great to see continued legislative momentum with the bipartisan FACT Act to make financial aid offers more student-centered and transparent,” states Laura Keane, Chief Policy Officer at uAspire. “Students need to know when a loan is a loan, and deserve a clear calculation of their true cost of attendance. Thank you to Representatives Trahan and Smucker for their leadership to require standardized financial aid terms, definitions and key formatting for all financial aid offers.”  

 

The FACT Act would:

  • Direct the Secretary of Education to develop requirements for financial aid offers and establish common terms and definitions to be used in all financial aid communications.

 

  • Create a standardized quick reference box in each aid offer, similar to the federal requirement that credit card statements include a box disclosing rates, fees, and terms in an identical fashion.

 

  • Allow schools to supplement aid offers with additional but non-contradictory information that grants them flexibility to capture nuances and variation in aid packages.

 

  • Base the content of the reference box and other financial aid offer requirements on extensive consumer testing with low-income students, English learners, first-generation students, and veterans having a voice in the process.

 

  • Require the Secretary of Education to publish findings from the consumer testing and explain how conversations with students and stakeholders informed the development of the aid offer requirements.

 

  • Ultimately, provide students important information on college costs and financial aid in a quick and easy-to-read format.

 

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