WASHINGTON – As
the Supreme Court prepares to consider two legal challenges to the Biden
administration’s
nearly $1
trillion
student loan cancelation
plan, Sens. Chuck Grassley (R-Iowa) and Tina Smith (D-Minn.)
today reintroduced three bipartisan bills to help students and families make
informed decisions about borrowing for college. The bills ensure that
students get the full picture when choosing a college and taking out loans
. From the initial college search, to
the acceptance of financial aid, to counseling once in college, the bills would
help college students avoid sticker shock, find the best college for their
budget and avoid taking out ill-advised and oversized loans.
“I often hear from Iowa families who are
frustrated and confused by the complex student loan borrowing process. So much
of the student debt conversation focuses on repaying debt. We ought to fix the
process on the front-end before students get in over their head. The federal
government should be offering commonsense resources to better prepare
borrowers,” Grassley said. “These bills would provide additional
counseling, resources and clarity to the student loan process so that America’s
next generation of leaders can pursue higher education opportunities without
breaking the bank.”
“We need to equip students and their
families with better information about the costs of college from the initial
college search to when they receive financial aid offers. My bipartisan bills
with Sens. Grassley and Ernst would help fix these problems,” Smith said. “That includes improved net
price calculators so students and families have estimates of college costs
after taking into account scholarships and grants. We’ve got a plan to create a
universal financial aid offer so students can easily compare financial aid
packages between schools, which is important because time and again students
are met with inconsistent and incomplete information. And we’ve introduced a
bill to improve loan counseling. These reforms will help students make one of
the biggest financial decisions of their lives—how to pay for college.”
The
Net Price Calculator Improvement Act would improve the
effectiveness of and access to net price calculators. Net price calculators provide
students with early, individualized estimates of higher education costs and
financial aid figures before they decide where to apply. Rep. Brett Guthrie
(R-Ky.) introduced companion legislation in the U.S. House of Representatives. A
summary of the
Net Price Calculator
Improvement Act is available
HERE.
The
Understanding the
True Cost of College Act would create a universal financial aid
offer form and standardize terms used to describe financial aid to allow
students to more easily compare financial aid packages between schools. This
aims to prevent troubling
findings by the
GAO that
over 90% of college financial aid offer letters currently understate the price
students would pay. Sen. Joni Ernst (R-Iowa) is an original cosponsor of the
bill and Rep. Young Kim (R-Calif.) introduced companion legislation in the U.S.
House of Representatives. A summary of the
Understanding the True Cost of
College Act is available
HERE.
The
Know Before You Owe Federal Student Loan Act would strengthen
the
Higher Education Act to enhance
the current loan counseling requirements for institutions of higher education.
The bill would make loan counseling an annual requirement before new loans are
disbursed, rather than a one-time requirement for first-time borrowers. The
legislation would also allow students to decide exactly how much they would
like to borrow, rather than offering the maximum possible loan amount as the
default option. Rep. Mariannette Miller-Meeks (R-Iowa) introduced companion
legislation in the U.S. House of Representatives. A summary of the
Know Before You Owe Federal Student Loan Act
is available
HERE.
Grassley has long
warned of the fiscal
danger posed by blanket cancelation after the fact, and is an advocate for
increased transparency to empower prospective and current students. Earlier
this month, he
joined Sen. Joni Ernst
(R-Iowa) in introducing the
Student Transparency for Understanding Decisions
in Education Net Terms (STUDENT) Act to provide student loan applicants
with an estimate of the total amount of interest they would pay prior to
accepting a loan.
“These proposed
bills will help give students and their families a more comprehensive
understanding of the total cost to finance postsecondary education. When
deciding on a postsecondary pathway, this information allows students to better
compare the financial impact of each option and make the most fiscally sound
investment in their future,” said Dr. Mark Wiederspan, Executive Director of
Iowa College Aid.
“At Iowa Student
Loan, we talk to some borrowers who regret their college outcome and the amount
they owe. Senator Grassley’s Know Before You Owe Federal Student Loan Act
will provide the information that students need to avoid these regrets,” said
Steve McCullough, CEO of the Iowa Student Loan Liquidity Corporation.
"The Understanding
the True Cost of College Act is the signature legislation that will make
financial aid offers more transparent and student-friendly. It will enable
students and families to make apples-to-apples comparisons among colleges and
universities, empowering them to make financially-informed postsecondary
decisions. We applaud Senators Grassley, Smith, and Ernst for centering
students and families in this bill," said Rachel Fishman, Acting
Director of the higher education program at New America.
“We applaud Sens.
Grassley, Smith, and Ernst for leading the Understanding the True Cost of
College Act. Paying for college is one of the biggest financial decisions
facing many American families. Yet, too many colleges are still providing
families with unclear and misleading information about their costs. This bill
would make common-sense reforms to ensure that colleges provide students with
clear, transparent, and comparable information about college costs and the
financial aid options available to cover them,” said Michele Shepard, Senior
Director of College Affordability at The Institute for College Access &
Success.
"uAspire
advises students on finding an affordable path to college, so we see first-hand
how financial aid offers often leave students uncertain about college costs.
Financial aid offers need to unquestionably identify loans, grants, and
work-study as different types of financial aid and provide students with clear
information on how much they need to pay to attend college. We thank Senators
Grassley, Smith, and Ernst for leading the Understanding the True Cost of
College Act, which would add critical clarity and transparency to financial
aid offers," said Anika Van Eaton, Vice President of Policy at uAspire.
“Understanding the
full scope of college costs should not leave students perplexed at best or
uninformed at worst. Instead, as students seek to upskill by investing their
time and resources in a college education, they deserve clear and complete
information about how much that investment will cost. IHEP applauds the Net
Price Calculator Improvement Act and the Understanding the True Cost of
College Act introduced by Sens. Grassley and Smith. Both will help shine
much needed light on college costs and, in turn, help students and families
make informed decisions about where to enroll. Cost transparency is critical for
all students, especially students from low-income backgrounds as they pursue
economic mobility and security through a college education,” said Mamie
Voight, President of the Institute for Higher Education Policy (IHEP).
“EFC proudly
endorses the Know Before You Owe Federal Student Loan Act and its
common-sense reforms to federal student loan counseling requirements,” said
Gail daMota, President of the Education Finance Council (EFC).
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