Bills Help Calculate Costs, Compare Financial Aid Packages, Understand Student Loans

WASHINGTON, D.C. [04/29/2021]—U.S. Senator Tina Smith (D-Minn.) introduced three bipartisan bills to help students and their families better understand the cost of college to avoid sticker shock, find the best value, and learn about student loans.

The Net Price Calculator Improvement Act improves net price calculators to help students understand higher education costs and financial aid figures before they apply. The Understanding the True Cost of College Act creates a universal financial aid award letter so students can easily compare financial aid packages between schools. The Know Before You Owe Federal Student Loan Act makes loan 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. In addition to Sen. Smith, Sens. Chuck Grassley (R-Iowa) and Joni Ernst (R-Iowa) also led the introduction of the three bills. 

“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,” said Sen. Smith. “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.”

“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,” said Sen. Grassley. “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.”

“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,” said Sen. Ernst.

A summary of the Net Price Calculator Improvement Act is available here
A summary of the Understanding the True Cost of College Act is available here.
A summary of the Know Before You Owe Federal Student Loan Act is available here.

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