Grassley, Smith, Ernst Introduce Bipartisan Bills To Empower Students, Provide Resources To Better Understand College Costs

Press Release

Sen. Chuck Grassley (R-Iowa) along with his colleagues, Sens. Tina Smith (D-Minn.) and Joni Ernst (R-Iowa) today introduced three bills that would provide students and their families with better information about the costs of college from the initial college search, through the application process, to ultimately accepting financial aid. The bipartisan bills include the Net Price Calculator Improvement Act, Understanding the True Cost of College Act and the Know Before You Owe Federal Student Loan Act.

"It's almost impossible for students to compare college costs until they've applied and received their financial aid offer. And when the financial aid offer they receive from one school differs from another school, students have a very hard time determining which school is the most economical choice. Then students often do not realize that the loan amounts offered may be well in excess of what the student needs or can afford to repay. This is critical information students and their families need as they make one of the most expensive decisions of their lives," Grassley said. "These bipartisan bills will empower students with more information. These bills would help take the mystery out of college costs and ensure that students know what they're getting themselves into before they get in over their heads."

"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. But right now, they're often met with inconsistent and incomplete information," Smith said. "My bipartisan bills with Sens. Grassley and Ernst would help fix this problem. That includes improved net price calculators so students and families have individualized estimates of college costs and financial aid figures before they decide where to apply. We've got a plan to create a universal financial aid offer so students can easily compare financial aid packages between schools. And we've introduced a bill to improve loan counseling. These resources will help students make one of the biggest financial decisions of their lives--how to pay for college."

"As tuition costs and fees at colleges continue to skyrocket, Iowans and Americans across the country are paying the price and taking on more and more student loan debt. We need to address this problem in multiple ways, including creating more transparency in the process and giving students and their families the opportunity to compare costs and make more informed choices about their higher education. As a mother, I know how important it is for our kids to have the best opportunities to learn, grow, and succeed, including considering higher education, and these bills will help ensure Iowans have all the information available to make the best decision for their futures," Ernst said.

This bipartisan package would help college students avoid sticker shock, compare colleges to find the best value and increase the amount of information students receive about federal student loans before they sign up for tens of thousands of dollars in debt.

The Net Price Calculator Improvement Act would improve the effectiveness of and access to net price calculators, the tools that provide students with early, individualized estimates of higher education costs and financial aid figures before they decide where to apply. The bill would require schools to put their calculators on webpages where students and families are likely to look for cost and admissions information. The Net Price Calculator Improvement Act would also authorize the Department of Education to develop a "universal calculator" that lets students answer a standard set of financial and academic questions to get cost estimates from many schools so they could better compare costs across institutions.

The Understanding the True Cost of College Act would create a universal financial aid offer form so that students could easily compare financial aid packages between schools. It would clarify what financial aid families will receive from a school and create standard terms for the aid offered so that students could accurately compare offers from different schools. Right now, schools do not use standard definitions or names for different types of aid, so students and families often report having difficulty figuring out the differences between grant aid -- which does not need to be repaid -- and student loans, which do need to be repaid.

The Know Before You Owe Federal Student Loan Act would strengthen the current loan counseling requirements for institutions of higher education in the Higher Education Act by making the counseling an annual requirement before new loans are disbursed rather than just for first-time borrowers and lets students decide exactly how much to borrow rather than having the maximum possible amount be the default. The bill then adds several key components to the information institutions of higher education are required to share with students as part of loan counseling so that students know not to borrow more than they are likely to be able to repay.

"We are proud to support the Understanding the True Cost of College Act. New America's research found that the way colleges communicate price and aid to students makes it difficult for students and families to make financially-informed college decisions. This legislation would help students and families navigate financial aid offers and make apples-to apples-comparisons between schools. We thank Senators Grassley, Smith, and Ernst for their leadership on this important issue," Amy Laitinen, Director of New America's Higher Education Program said.

"We strongly supports the Know Before You Owe Federal Student Loan Act as it makes common-sense reforms that strengthen federal student loan counseling requirements, ensuring that students have the tools to make informed decisions about successfully financing postsecondary education" Debra Chromy, President of Education Finance Council said.

"A postsecondary education is one of the most important investments a student will ever make. Yet when making college choices, students are forced to navigate a complex maze to determine how much college actually will cost. The pricing tools available to them are unstandardized and confusing, provide an incomplete picture of expenses, and do not allow students to meaningfully compare college and program options. The Net Price Calculator Improvement Act and the Understanding the True Cost of College Act will make much-needed improvements to two student-facing resources: institutional net price calculators and financial aid award offers. These measures will improve transparency around college costs, empower student choices, and help students select a college or program that fits their financial circumstances and goals," Mamie Voight, Interim President, Institute for Higher Education Policy (IHEP) said.

"We applaud Sens. Grassley, Smith, and Ernst for leading the Understanding the True Cost of College Act to ensure that colleges provide students and families with clear, transparent, and comparable information about college costs and the options available to help cover those costs," Michele Streeter, Senior Policy Analyst, the Institute for College Access & Success (TICAS) said.

"uAspire applauds the effort to increase transparency of college costs and the many student-centered improvements in the new Understanding True Costs of College Bill sponsored by Sen. Grassley (R-IA), Sen. Smith (D-MN), and Sen. Ernst (R-IA). uAspire supports several provisions of this bill, including the requirements for standardized financial aid terms, mandatory elements and formatting, as well as consumer-testing terms and calculations with students. uAspire advises students how to navigate complexities and confusion in understanding and paying for their postsecondary education. Legislation to increase the consistency of how college costs are communicated and calculated throughout their postsecondary financial aid experience is critical. The three bills introduced today advance this cause. We look forward to working with all parties to advance solutions for students to have the critical cost information - about tuition/fees and costs beyond tuition - needed to make financially-informed college choices," Laura Keane, Chief Policy Officer, uAspire said."

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