This model legislation provides a structured framework for standardizing financial-aid offers, ensuring that they are transparent, accurate, and accessible to students and families. It is intended for use by state legislators.
Key Provisions of the College Financial-Aid Transparency and Accessibility Act:
1. Transparency: Offers must use plain, standardized language and clear formatting to be consumer-friendly.
2. Essential Components: Offers must include:
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- Total Cost of Attendance (COA), with a breakdown of tuition, fees, housing, and other expenses.
- Types of Aid: Clearly separated grants, scholarships (non-repayable), loans (labeled as “loans”), and work opportunities.
- Net Price Calculation (COA minus grants/scholarships).
- Renewability: A clear statement of whether aid is renewable and the relevant renewal criteria.
- Loan Terms: An explanation of federal loan terms and potential costs.
- Next Steps: Instructions for accepting, declining, or updating offers.
3. Optional Information: Parent PLUS loans must be listed separately, without specific amounts, encouraging families to review terms.
Governing Board(s) will enforce compliance through audits and may apply funding penalties for noncompliance. Standards will be reviewed and updated every five years.
This Act ensures financial-aid offers are accurate, comparable, and easy to understand. This model legislation was based on the work of the College Cost Transparency Initiative.