NASFAA Endorses Bill Aimed at Improving Transparency in Student Financial Aid

By Megan Walter, Policy and Federal Relations Staff

Rep. Andy Kim (D-N.J.) last week introduced a bill requiring schools to make readily available their policies on adjusting institutional aid upon a student’s receipt of non-Title IV aid and how the receipt of non-Title IV aid may impact eligibility for institutional financial aid. The Helping Students Plan for College Act, supported by NASFAA, requires schools that adjust institutional aid based on student receipt of non-Title IV aid, commonly called scholarship displacement, to disclose this fact publicly, which is already a best practice at many schools. 

Specifically, the bill requires schools to publish a statement that eligibility for institutional aid may be impacted by the receipt of nonfederal aid and requires institutions to disclose their policies on making such adjustments and how receipt of such assistance may impact eligibility for, or the amount of, institutional aid. 

The bill does not require a separate, direct disclosure, however, it does require that the information be made "readily available upon request" to prospective and enrolled students, for which inclusion of the policy on the institution’s website would meet compliance requirements. The institution’s aid adjustment policy must also be included in the annual notice of consumer information (which includes existing disclosures on topics such as Cost of Attendance, refund policies and Satisfactory Academic Progress, etc.) which is already required to be sent to enrolled students.

The bill also requires the Government Accountability Office to conduct a study of outside aid programs, demographics of outside aid recipients, and institutional policies for outside aid. The results of the study would include recommendations, if deemed appropriate, for legislative action to support the use of non-Title IV financial assistance to supplement, and not supplant, institutional financial aid. 

In recent years, several states such as Maryland and New Jersey have passed laws that have sought to outright ban scholarship displacement at public universities. 


Publication Date: 10/5/2021

Joel T | 10/6/2021 12:8:53 PM

I'm not sure how me pointing out that this would cause more administrative burden is advocating for less transparency. I'm merely pointing out that we have a ton of administrative burden in a normal year, HEERF funds have seemingly doubled the burden on our campus, and it seems as though there's no end in sight in efforts to add more strings to the receipt of Title IV funds.

It's my opinion that it is more appropriate to direct energies at relieving burden than advocating for more. But that's just my opinion.

P.S. What you described is standard practice so that we can ensure students don't exceed the COA.

David S | 10/5/2021 1:42:49 PM

Do you propose less transparency, Joel?

Here's one of the more ironic things I've encountered in a while; 4 of our students received funding from a private external source, but they made the award decisions late (right before the semester started) and would not release the funds until the student showed them a bill. The reason was so that they could displace their funds with other words, what private scholarship providers have been critical of schools doing for years, even if it's to avoid overawards.

Joel T | 10/5/2021 9:42:15 AM

It's interesting that NASFAA is advocating for MORE administrative burden...

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

Annual Business Meeting and Policy Update


Policy Update Webinar


View Desktop Version