# College Cost Transparency and Student Protection Act

This bill requires colleges to give students a clearer, standardized financial aid offer that makes it much easier to understand what college will actually cost and how to pay for it. Right now, colleges send out "award letters" that can look completely different from school to school, making it hard for students and families to compare offers or understand what they're really paying.

The bill creates a standardized format that all colleges must use when telling students about their financial aid. The key change is separating costs into two clear categories: direct costs (tuition, fees, and required expenses) and indirect costs (housing, food, books, transportation, and personal expenses). Students would first see what they need to pay for direct costs, then decide if they need help with indirect costs. This prevents colleges from making loans look like free money by mixing them together with grants and scholarships. The bill specifically bans calling these offers "award letters" and requires colleges to clearly show which money doesn't need to be repaid (grants and scholarships) versus which money must be paid back with interest (loans).

The financial aid offer must also show students their actual out-of-pocket costs—what they or their family really need to pay after subtracting all the free aid. It lists financing options in a specific order: personal resources first, then federal loans (clearly labeled as subsidized or unsubsidized), then work-study jobs. The offer includes information about typical earnings and loan payments for graduates of that program, so students can think about whether the debt makes sense. Before the bill takes effect, the Department of Education must test these forms with actual students, families, and counselors to make sure they're truly understandable.

College Cost Transparency and Student Protection Act

McClain, Lisa C.

College Cost Transparency and Student Protection Act This bill outlines requirements for financial aid offers that must be provided to prospective and enrolled students. Specifically, the bill requires the Department of Education (ED) to publish requirements for financial aid offers that each institution of higher education (IHE) participating in federal student aid programs must provide to students. These requirements include standardized terms and definitions, certain formatting requirements, and components regarding costs. In particular, a financial aid offer must first include a component related to direct costs (i.e., tuition, fees, and other expenses required for the student to enroll in the IHE). If the student completes the component related to direct costs and confirms that the student is seeking financial assistance for indirect costs (e.g., housing and food, books and supplies, and transportation), then the offer must include components related to those indirect costs. IHEs may not refer to these offers as award letters. The bill requires ED to ensure that information published on the website of each IHE or the College Scorecard includes information on costs, earnings, and loan payments in a manner consistent with financial aid offers. The College Scorecard is a comparison tool for information on school sizes, settings, graduation rates, average costs, and salary ranges per field of study.