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