Higher Education Cost Transparency Act

Section 1–Title: This bill shall be known as the Higher Education Cost Transparency Act.

Section 2–Lifetime Borrowing Limits: For any period of instruction beginning on or after July 1, 2025, the maximum aggregate amount of Federal Direct Loans that may be borrowed by an eligible student shall not exceed $50,000 for any student enrolled in an undergraduate degree or certificate program; $100,000 for any student enrolled in a graduate degree program other than a graduate professional degree program; $150,000 for any student enrolled in a graduate professional degree program, including a program in medicine, law, dentistry, veterinary medicine, pharmacy, or another professional field designated by the Secretary of Education; and $200,000 in total aggregate Federal Direct Loan borrowing.
For purposes of this section, the term “Federal Direct Loans” includes Federal Direct Subsidized Stafford Loans, Federal Direct Unsubsidized Stafford Loans, Federal Direct PLUS Loans made to graduate or professional students, and Federal Direct Consolidation Loans, to the extent such consolidation loans repay loans otherwise subject to the limits established under this section.

No institution of higher education may certify, originate, or disburse a Federal Direct Loan in an amount that would cause a borrower to exceed the applicable aggregate limit established under this section.

A Federal Direct Consolidation Loan shall not be used to avoid, reset, or increase the aggregate lifetime borrowing limits established under this section.

No Federal Direct PLUS Loan may be made to a graduate or professional student, or to a parent borrower on behalf of a dependent student, for any period of instruction beginning on or after July 1, 2025.

The limits established under this section shall not apply to a borrower who received a Federal Direct Loan for enrollment in the same program of study before July 1, 2025, for the remainder of the borrower’s expected program length, as determined by the Secretary.

Section 3–Institutional Risk-Sharing for Federal Student Loan Non-Repayment: Beginning with the first fiscal year that begins after the date of enactment of this Act, each institution of higher education participating in the Federal Direct Loan Program shall be subject to an annual institutional risk-sharing assessment for each eligible program of study offered by such institution.

The Secretary of Education shall calculate, for each program of study, the share of borrowers who received Federal Direct Loans for enrollment in such program and who, after completing, withdrawing, or ceasing enrollment (unless they are doing so for military reasons) in such program, are not making progress toward repayment of such loans.

A borrower shall be considered not making progress toward repayment if the borrower’s outstanding Federal Direct Loan balance has not declined below the original principal balance, the borrower is more than 90 days delinquent, or the borrower is in default.

The Secretary of Education shall determine, for each program of study, the program’s non-repayment rate for each award year. For purposes of this section, the non-repayment rate shall mean the percentage of borrowers who received Federal Direct Loans for enrollment in such program and who are not making progress toward repayment after leaving such program. The consequences described in this section shall apply if a program meets the applicable non-repayment threshold for two out of three consecutive award years.

For purposes of this section, the term “non-repayment balance” means the total outstanding Federal Direct Loan balance attributable to borrowers from a program of study who are not making progress toward repayment.

The risk-sharing payment required under this section shall be calculated as follows:

For a program with a non-repayment rate of less than 25 percent, no payment shall be required.

For a program with a non-repayment rate of at least 25 percent but less than 30 percent, the Secretary shall issue a warning notice to the institution and require public disclosure of such non-repayment rate.

For a program with a non-repayment rate of at least 30 percent but less than 35 percent, the institution shall submit a corrective action plan to the Secretary of Education.

For a program with a non-repayment rate of at least 35 percent but less than 40 percent, the institution shall pay an amount equal to 5 percent of the non-repayment balance for such program.

For a program with a non-repayment rate of at least 40 percent but less than 50 percent, the institution shall pay an amount equal to 10 percent of the non-repayment balance for such program.

For a program with a non-repayment rate of 50 percent or greater, the institution shall pay an amount equal to 15 percent of the non-repayment balance for such program.

For a program with a non-repayment rate of 50 percent or greater for three consecutive award years, the institution shall pay an amount equal to 20 percent of the non-repayment balance for such program and shall be subject to heightened review by the Secretary.

If a program of study is subject to heightened review, the Secretary may limit, suspend, or terminate the eligibility of a program of study to participate in the Federal Direct Loan Program.

A public two-year institution shall not be required to make a risk-sharing payment for a program of study if the program’s tuition and required fees are below the statewide median tuition and required fees for comparable programs, unless the program has a non-repayment rate of 60 percent or greater for three consecutive award years.

This section shall apply only to a program of study with not fewer than 25 borrowers entering repayment during the applicable measurement period.

Section 4–Clear Price and Outcome Information for Families: Not later than one year after the date of enactment of this Act, the Secretary of Education shall develop a standardized financial aid offer form for use by institutions of higher education participating in programs under title IV of the Higher Education Act of 1965.

For any award year beginning after the date on which the standardized financial aid offer form is made available, each institution of higher education participating in programs under title IV of the Higher Education Act of 1965 shall provide such form to each admitted or enrolled student who receives, or is eligible to receive, Federal student aid.

The standardized financial aid offer form shall clearly and prominently disclose, in plain language: the total estimated cost of attendance for the academic year, including tuition, required fees, books and supplies, housing, meals, transportation, and other estimated expenses; the net price the student is expected to pay after grants and scholarships are applied; the amount of Federal, State, institutional, and private grant aid offered to the student; the amount of work-study aid offered to the student, if any; the amount and type of each Federal student loan offered to the student; the estimated monthly loan payment associated with accepting the offered Federal student loans; the total projected Federal student loan debt the student may incur if the student completes the program on the expected timeline; the program’s completion rate; the program’s job placement rate, if available; the median earnings of students who completed the program, measured at such time after completion as the Secretary of Education determines appropriate; the median Federal student loan debt of students who completed the program; the share of borrowers from the program who are making progress toward repayment; and a clear statement that loans must be repaid and that grants and scholarships generally do not need to be repaid.

Each institution of higher education participating in programs under title IV of the Higher Education Act of 1965 shall annually report to the Secretary, for each program of study offered by the institution and in such form as the Secretary may require, the information necessary to complete the standardized financial aid offer form required under this section.

An institution may not present Federal student loans, Parent PLUS loans, or private education loans as grants, scholarships, discounts, awards, or other non-repayable aid.

An institution shall provide the standardized financial aid offer form required under this section before requiring a student to accept or decline any Federal student loan, make an enrollment deposit, or otherwise commit to attendance.

All disclosures required under this section shall be written in clear, plain language and shall distinguish grants and scholarships from loans in a manner that is understandable to students and families.

If the Secretary of Education determines that an institution has failed to comply with this section for the first time, the Secretary shall require the institution to submit and implement a corrective action plan, including procedures to ensure accurate, timely, and plain-language disclosure of cost, aid, debt, completion, earnings, and repayment information.

If the Secretary of Education determines that an institution has failed to comply with this section more than once during any three-year period, the Secretary shall impose a civil penalty of not less than $50,000 and not more than $500,000 for each violation, based on the size of the institution, the number of students affected, the severity of the violation, and whether the violation was knowing or repeated.

If an institution fails to comply with this section for three consecutive award years, the Secretary shall limit, suspend, or terminate the institution’s eligibility to certify or originate Federal student loans until the institution demonstrates substantial compliance with this section.

If the Secretary determines that an institution knowingly misrepresented the total cost of attendance, net price, loan obligations, expected debt, completion outcomes, earnings outcomes, or repayment outcomes, the Secretary may impose a civil penalty of not more than $1,000,000 for each violation and may limit or suspend the institution’s authority to originate or certify Federal student loans.

Nothing in this subsection shall be construed to limit the authority of the Secretary of Education, the Federal Trade Commission, the Consumer Financial Protection Bureau, a State attorney general, or any other Federal or State agency to enforce laws prohibiting unfair, deceptive, abusive, or misleading acts or practices.

Section 5–Endowment Transparency Requirement: Institutions with endowment assets exceeding $1,000,000,000 shall annually disclose total endowment assets; annual investment returns; endowment spending rates; undergraduate tuition growth rates; financial aid expenditures; and administrative compensation funded through endowment-supported expenditures.

The Secretary of Education shall publish disclosures submitted under this section in a publicly accessible database.