BILL NUMBER: S4200

SPONSOR: GOUNARDES
 
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 finan-
cial 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 contribution; and campus-specific graduation, median
borrowing, and loan default rates. Missing from this paragraph in
Section 9-W, 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:

2024: S7859 - Passed Senate, died in Assembly

 
FISCAL IMPLICATIONS:

None

 
EFFECTIVE DATE:
This act shall take effect on the thirtieth day after it shall have
become a law.