Higher Education Act Adds Simplification, Disclosure Requirements

In addition to increasing Pell Grants, the legislation seeks to clarify the application process. One provision simplifies financial aid forms by reducing the number of questions asked and mandating it that contain more easily understood language. The legislation also imposes new regulations on financial institutions that make private loans to students not in the federal student loan program. It requires those lenders to disclose 27 pieces of information, such as disclosing at least three times in the application process all potential finance charges, late fees, penalties, and adjustments to the loan. It also gives student borrowers up to 30 days to terminate a loan after an application is approved.

Additionally, with textbook costs averaging about $900 a year and many students forced to pay hundreds of dollars for a required book “bundled” with a DVD or workbook, the new law would require publishers to provide full pricing information and sell unbundled versions of every textbook.