House Democrats' HEA Reauthorization Bill's Impact on Loan Counseling and Consumer Information

By Megan Walter, Policy & Federal Relations Staff

Editor's Note: This article is the fifth in a series that delves into Title IV-related issues contained in the House Democrats' bill to reauthorize the Higher Education Act, the Aim Higher Act.

This article details the proposed changes in the Aim Higher Act affecting loan counseling practices, the "Financial Aid Shopping Sheet," and the repeal of the student unit record ban.

Postsecondary Data System and the Student Unit Record

The Aim Higher Act (AHA) seeks to repeal the student unit record ban, which currently prohibits the Department of Education (ED) from collecting student-level data. The AHA would create a secure postsecondary data system which would be produced and maintained by the Commissioner for Education Statistics. The database would collect information related to enrollment, completion, postsecondary costs, and financial aid to improve institutional transparency, cut down on reporting burdens for institutions, and help ED study the effectiveness of federal student aid programs. The student-level data collected would also now include data disaggregated by race, as well as other student characteristics.

Exit Counseling

Exit counseling under the AHA would be updated to include more personalized information for the borrower. Any borrower completing exit counseling would now receive a summary of his or her outstanding principal balance and interest due on all federal Direct Loans (DL) borrowed, an explanation of the grace period, and the date he or she can expect to enter repayment. Exit counseling would be updated to show the amount a borrower could expect to pay under the two new repayment plan options that the AHA would create, as well as the contact information for the servicer of the borrower's loan.

Annual Counseling

Under the AHA, borrowers would be required to complete loan counseling each award year before they can receive a DL disbursement. An institution, during an in-person counseling session through its personalized online counseling or by utilizing ED's online counseling tool, would also be required to ensure that borrowers are informed of the anticipated balance of the loan they're borrowing, as well as what their monthly repayment amounts would look like under both repayment plans.

Study of Effectiveness of Counseling

Lastly, as it relates to counseling, the AHA also includes intentions to pursue a study of the effectiveness of student loan counseling, which NASFAA's Reauthorization Task Force suggested in its recommendations to Congress in 2016. The study would collect aggregated data on who is completing counseling and measure it against those populations' persistence, degree attainment, and cumulative borrowing levels to assess whether loan counseling is having the impact it is meant to have on financial literacy.

Annual Acceptance

Institutions would also be required annually under the AHA to receive a signature, either electronically or on paper, confirming the borrower's intention to accept their eligible DL amount before any loan disbursement can be made.

Shopping Sheet

Under the AHA institutions would be required to use ED's "Financial Aid Shopping Sheet," which is currently voluntary, either in the place of their current financial aid award notification or in addition to their award notification.


Publication Date: 8/20/2018

Jose E | 8/20/2018 10:6:37 AM

For Graduate and Professional students, I disagree on the annual entrance counseling as the proposals will be complicating the process and putting more responsibility on the financial aid office to explain and chase after people to get things completed. We already have issues with medical students who do not complete the Grad PLUS Loan Application even after repeated reminders.

Kristine B | 8/20/2018 8:26:31 AM

I like the fact that entrance counseling would be required on a yearly basis and that it would require loan balance information along with monthly repayment amounts. I feel that this would help make the loan borrowing a bit more real for the students that tend to borrow more than what they need, and ultimately help them reduce their loan debt.

You must be logged in to comment on this page.

Comments Disclaimer: NASFAA welcomes and encourages readers to comment and engage in respectful conversation about the content posted here. We value thoughtful, polite, and concise comments that reflect a variety of views. Comments are not moderated by NASFAA but are reviewed periodically by staff. Users should not expect real-time responses from NASFAA. To learn more, please view NASFAA’s complete Comments Policy.

Related Content

HEA Reauth Compiled Recommendations


HEA Reauthorization Positions


View Desktop Version