House Ed Panel Advances Financial Aid Transparency Bills

A House education panel voted Thursday to advance two bills aimed at ensuring that students know more about the price of college and their options to pay for it.

One of the bills, the Student Financial Clarity Act, would require the Education Department to create a universal net price calculator that would give students an estimate of what they might have to pay for a particular program or institution. That legislation, which passed with bipartisan support, would also expand the College Scorecard to include more program-level statistics so students could compare outcomes and costs.

Under the other bill, the College Financial Aid Clarity Act, the Education Department would develop a standardized format for college financial aid offers. Lawmakers on both sides of the aisle have sought for years to improve institutional offer letters—efforts that picked up steam in 2023 after the Government Accountability Office found that most colleges failed to clearly and accurately tell students how much their education would cost.

After the department creates the standard format, colleges that receive federal funding will have to adopt it by July 1, 2029, according to the legislation, which also received bipartisan backing.

The House and Senate education committees have explored the issue of college price transparency in hearings this fall, showing that it’s a priority for key lawmakers. Rep. Tim Walberg, the Michigan Republican who chairs the House committee, framed the legislation as an answer to waning public trust in postsecondary education.

“Too many students face bureaucracy, hidden costs and student debt for programs that don’t deliver a return on investment,” Walberg said. “These bills take important steps to fix that.”

American Council on Education president Ted Mitchell wrote to the committee that a federally mandated financial aid award letter would be difficult to adjust in response to consumer feedback and changes to federal student aid. ACE and others have spearheaded a voluntary effort to improve the letters known as the College Cost Transparency Initiative, which includes about 760 colleges and universities.

“It is also important to note that new requirements regarding financial aid award letters will impose significant administrative, financial, and technical challenges that will divert institutional resources away from student support,” Mitchell wrote.

Democrats generally supported the legislation, though they indicated that they wanted to see more changes that would actually lower the cost of college and hold the Education Department accountable.

Democrats expressed worry that a diminished Education Department wouldn’t be able to implement the changes called for in the legislation. They also pushed for language in the bills that would require the Education Department itself to perform the work. Education Secretary Linda McMahon recently outsourced several grant programs to other federal agencies, raising concerns among Democrats on the committee.

“Based on the secretary’s track record, it wouldn’t surprise me if she’s already devising a way to pass these requirements on to someone else or some other agency,” said Rep. Suzanne Bonamici, an Oregon Democrat.