Congressman Kim Introduces Bipartisan Bills to Improve Transparency in Student Financial Aid

September 27, 2021
Press Release

WASHINGTON, DC – Today, Congressman Andy Kim (NJ-03), introduced two bipartisan bills to improve transparency in student financial aid. The Helping Students Plan for College Act, introduced with Congressman Mike Kelly (PA-16), addresses the practice of scholarship displacement, which occurs when schools reduce a student’s aid award when they receive an outside scholarship. 

The Front-Loaded Aid Transparency (FLAT) Act, introduced with Congressman Rodney Davis (IL-13), addresses the practice of financial aid “front-loading,” which occurs when schools provide more aid to students in their first year than in subsequent years, to attract students to enroll in the school. 

“Practices like front-loading aid and scholarship displacement make it harder for students and their families to plan for college,” said Congressman Kim.  “Our bipartisan bills will increase transparency and help students and parents make the best financial decisions for their families. I am proud to work with Congressman Davis and Congressman Kelly on these important bipartisan bills, and I look forward to working with my colleagues on both sides of the aisle to pass these common-sense measures.”

Helping Students Plan for College Act

The issue of scholarship displacement was brought to Congressman Kim’s attention by Zaniya Lewis, a constituent from Edgewater Park.

"During my senior year of college, I won a private scholarship and submitted the award to my undergraduate university. The financial aid department notified me that my college would be eliminating half of my institutional need-based scholarship, eliminating my federal work-study, and increasing my federal loans, meaning I was suddenly left to pay over $15,000 out of pocket,” said Zaniya Lewis. “The Helping Students Plan for College Act is so important because it will require universities across the nation to make their private scholarship policies transparent and notify students about their financial situation ahead of time so that students and families can make informed college financial decisions.”

This legislation would require all institutions of higher education to notify prospective and enrolled students of the school’s policy on private scholarships, and how receipt of such scholarships may impact a student’s eligibility for institutional aid.  If passed into law, the bill would ensure students know upfront whether additional scholarships they earn will reduce the amount of student loans they will need to borrow.  The bill would also direct the Government Accountability Office (GAO) to conduct a study on scholarship displacement.

“A college education is one of the most significant investments that an individual can make in their lifetime, so when planning for college expenses, students and families need to have enough information to determine how federal, state, institutional, and private grant aid will fit together, as well as how institutional aid amounts will change as a student progresses toward a degree,” said Mamie Voight, Interim President, Institute for Higher Education Policy (IHEP). “The Helping Students Plan for College Act and the Front-Loaded Financial Aid Transparency (FLAT) Act will increase transparency around institutional financial aid practices, including how outside grant aid can impact award amounts and how award amounts can change from year to year. Together, these measures will empower students to select a college or program that best fits their financial circumstances and educational goals as they plan for their educational expenses from enrollment through completion.”

The Helping Students Plan for College Act is endorsed by: National Education Association, National Association of Student Financial Aid Administrators, The Institute for College Access and Success, Institute for Higher Education Policy, Scholarship America, National Scholarship Providers Association, 10,000 Degrees, Marine Corps Scholarship Foundation, Southern California College Access Network, National Association for College Admission Counseling, New America, CoLabL, Kaleidoscope, TuitionFit, Delaware Community Foundation, Council of Michigan Foundations, and YesSheCanCampaign.

The full text of the bill can be found here, and a one-page summary can be found here.

Front-Loaded Aid Transparency (FLAT) Act

This legislation would direct the GAO to conduct a study aimed at uncovering the prevalence, extent, and impact of the practice of front-loading institutional grant aid at accredited colleges and universities in the United States.  The study would include the impact of front-loading on important outcomes such as student loan borrowing, student retention, enrollment intensity (i.e. taking fewer courses), transfer rates, and graduation rates.  Importantly, it would also look at whether schools that engage in front-loading inform prospective students about how their aid packages are likely to change after their first year of study.

“Making the financing of higher education more transparent is vital to making college more affordable and accessible,” said Congressman Davis. “The practice of front-loading financial aid may have serious impacts on the personal finances of students, particularly their student debt burdens. That’s why I’m proud to join Congressman Kim and other House colleagues in introducing the bipartisan FLAT Act, to shine a light on this practice and make sure college students have a full picture of the costs of their college education.”

“We applaud the introduction of the Helping Students Plan for College Act and the FLAT Act, which make important strides toward improving the financial aid process for students and their families,” said Michele Streeter, Associate Director of Policy & Advocacy at The Institute for College Access & Success (TICAS)

The FLAT Act is endorsed by: The Institute for College Access and Success, Institute for Higher Education Policy, and YesSheCanCampaign.

The full text of the bill can be found here, and a one-page summary can be found here.

Congressman Kim is a member of the House Armed Services Committee, the House Foreign Affairs Committee, and the House Committee on Small Business. More information about Congressman Kim can be found on his website by clicking here

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