This bill requires colleges to use a standardized financial aid offer form so students can easily understand and compare the true cost of attending different schools. Right now, each college creates its own financial aid letter using different formats and language, making it hard for students and families to understand what they're actually paying and what aid they're receiving.

The new standard form will clearly show all costs upfront—like tuition, fees, room and board, books, and transportation—followed by grants and scholarships you don't have to repay. It will then calculate your "net price," which is what you or your family actually need to pay after subtracting free aid. The form will also clearly label any loans you're offered, explaining that loans must be repaid and showing current interest rates. It will distinguish between federal loans (which typically have better terms) and private loans, and explain work-study opportunities.

The Department of Education will develop this standard form by testing it with real students, families, and college counselors to make sure it's easy to understand. All colleges that receive federal funding will be required to use this form when they send financial aid offers to accepted students. The goal is to help students and families make better decisions about which college they can afford and how much debt they're taking on, rather than being confused by different formats and unclear language from each school.

Understanding the True Cost of College Act of 2023

Kim, Young

Understanding the True Cost of College Act of 2023 This bill requires standardized financial aid terminology and offer forms. Specifically, the Department of Education (ED) must develop standard terminology and a format for financial aid offer forms based on recommendations from representatives of certain groups, including students, veterans, and institutions of higher education (IHEs). The consumer-friendly form must include specified details and disclosures, including the estimated cost of attendance, the net price that a student or family is estimated to pay, and the terms and conditions of financial aid. In addition, ED must (1) test the form with representatives of students, students' families, IHEs, secondary school and postsecondary counselors, and nonprofit consumer groups; and (2) use the results to develop the final form. Each IHE that participates in federal student-aid programs must (1) use the standard form when offering financial aid to students, and (2) use the standard terminology and definitions developed by ED for all communications related to financial aid offers.