Requires student financial aid award letters to contain information on net costs, defined as an estimate of the costs of attendance after financial aid which does not require repayment and options for loans which do require repayment.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A9649
SPONSOR: Raga TITLE OF BILL:
An act to amend the banking law, in relation to information included in
student financial aid award letters
PURPOSE OR GENERAL IDEA OF BILL:
To ensure that the uniform financial aid award letter designed by the
Department of Financial Services and the Higher Education Services
Corporation includes a listing of a college's net price
SUMMARY OF PROVISIONS:
Section one of the bill amends Section 9-w of the Banking Law to add net
costs, defined as the estimated cost of attending a college after grants
but before loans, and loan repayment options to the list of descriptors
that must be included in a standard financial aid award letter.
Section two sets the effective date.
JUSTIFICATION:
In the 2016 budget, the New York State legislature made important
progress towards transparency in college admissions by creating a
uniform financial aid award letter, to be developed by the Department of
Financial Services (DFS) and the Higher Education Services Corporation
(HESC). The letter, which is described in Section 9-W of the Banking
Law, was a key piece of New York's "Student Borrower Bill of Rights,"
which aimed to help undergraduate students and their families understand
and afford the true cost of higher education. Section 9-W describes a
series of pieces of information that all financial aid award letters
must include, such as: the estimated cost of attendance, broken down by
tuition and fees, room and board, books, and transportation; financial
aid offered by the federal government, state, and college, and which
portions must be repaid; any expected student and/or family contrib-
ution; and campus-specific graduation, median borrowing, and loan
default rates. Missing from this paragraph in Section 9W, however, is a
key data point that every family needs and yet many colleges fail to
clearly include: the "net price" of college, or bottom line that the
payer is responsible for after grants but before loans.
With more than half of New York students graduating tens of thousands of
dollars in debt, simply requiring the listing of net price in award
letters could go a long way towards helping families and individuals
plan their annual budgets and avoid mountains of crippling debt. While
DFS' current design of the uniform financial aid award letter has a
section titled "What you will pay," it is not one of the categories of
data included in Section 9-W and thus afforded statutory consideration.
Additionally, the current DFS template includes a section on loan
options, broken down by federal vs. private lenders - and yet this data
point is also excluded from Section 9-W.
This bill enshrines these two critical information points into statute
by officially including them in the standard financial aid award letter
which all colleges must use under state Banking Law. Helping students
and their families easily understand the cost of higher education so
that they can make an informed decision before embarking on what is
frequently the most expensive endeavor of their lives is the least we
can do to abate our state's burgeoning college affordability crisis.
PRIOR LEGISLATIVE HISTORY:
None
FISCAL IMPLICATIONS:
None
EFFECTIVE DATE:
This act shall take effect on the thirtieth day after it shall have
become a law.
STATE OF NEW YORK
________________________________________________________________________
9649
IN ASSEMBLY
March 27, 2024
___________
Introduced by M. of A. RAGA -- read once and referred to the Committee
on Banks
AN ACT to amend the banking law, in relation to information included in
student financial aid award letters
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 9-w of the banking law, as amended by section 1 of
2 part CC of chapter 54 of the laws of 2016, is amended to read as
3 follows:
4 § 9-w. Standard financial aid award letter. The superintendent of
5 financial services in consultation with the president of the higher
6 education services corporation shall develop a standard financial aid
7 award letter which shall clearly delineate (a) the estimated cost of
8 attendance, including but not limited to, the cost of tuition and fees,
9 room and board, books, and transportation. Such standard letter shall
10 provide the estimated cost of attendance for the current academic year
11 as well as estimates for each academic year that the student would need
12 to attend to earn a degree at such institution with a disclaimer that
13 the cost of attendance for years other than the current academic year
14 are estimates and may be subject to change, (b) all financial aid
15 offered from the federal government, the state, and the institution with
16 an explanation as to which components will require repayment, (c) any
17 expected student and/or family contribution, (d) net costs, defined as
18 an estimate of the costs of attendance after financial aid which does
19 not require repayment, (e) campus-specific graduation, median borrowing,
20 and loan default rates, (f) options for loans which do require repay-
21 ment, and [(e)] (g) any other information as determined by the super-
22 intendent in consultation with the president. Such standard letter shall
23 include a glossary of standard terms and definitions used on such stand-
24 ard letter. The superintendent shall publish and make available such
25 standard letter by December thirty-first, two thousand fifteen and ther-
26 eafter. Each college, vocational institution, and any other institution
27 that offers an approved program as defined in section six hundred one of
28 the education law shall utilize the standard letter issued by the
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD13228-02-3
A. 9649 2
1 department of financial services in responding to all undergraduate
2 financial aid applicants for the two thousand sixteen--two thousand
3 seventeen academic year and thereafter. The superintendent shall promul-
4 gate regulations implementing this section.
5 § 2. This act shall take effect on the thirtieth day after it shall
6 have become a law.
