Bill Text: NJ A3422 | 2024-2025 | Regular Session | Introduced
Bill Title: Revises calculation of student financial need and provides circumstances for reduction of financial aid at institutions of higher education and proprietary institutions.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced) 2024-02-01 - Introduced, Referred to Assembly Higher Education Committee [A3422 Detail]
Download: New_Jersey-2024-A3422-Introduced.html
Sponsored by:
Assemblywoman PAMELA R. LAMPITT
District 6 (Burlington and Camden)
SYNOPSIS
Revises calculation of student financial need and provides circumstances for reduction of financial aid at institutions of higher education and proprietary institutions.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning institutional financial aid, amending P.L.2022, c.127 and P.L.2021, c.223, and supplementing Title 18A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 1 of P.L.2022, c.127 (C.18A:3B-6c) is amended to read as follows:
1. a. In the event that a public or independent institution of higher education or a proprietary institution licensed to offer academic degrees provides a financial aid award letter to a student, the financial aid award letter shall:
(1) be presented in a manner, and in such language, that is substantially similar to that which is used in, and uses terms as defined in, the financial aid shopping sheet provided to students pursuant to section 2 of P.L.2019, c.201 (C.18A:3B-6b);
(2) clearly display the total cost for one year of attendance at the institution, including tuition, student fees, room and board, books and materials, and transportation and other educational costs and the student's estimated net cost to attend the institution after the application of financial aid for which the student is eligible;
(3) clearly differentiate a student's eligibility for loans from a student's eligibility for other forms of financial aid, including grants, work study funds, and scholarships; [and]
(4) include a clear statement that the acceptance or declination of one or more loan offers shall not impact a student's eligibility for any other grants or scholarships detailed in the student's financial aid award letter; and
(5) include a clear statement that the acceptance of one or more scholarships from a source other than the institution shall not impact a student's eligibility for any other grants or scholarships detailed in the student's financial aid award letter provided that the student's total financial aid does not exceed a student's financial need.
b. A student enrolled in a public or independent institution of higher education or a proprietary institution licensed to offer academic degrees shall be ineligible to receive any form of student assistance from the State, including grants, scholarships, and loans, in the event that the institution or school fails to meet the requirements established pursuant to subsection a. of this section, as determined by the Secretary of Higher Education. Prior to revoking eligibility for student assistance from the State to a student enrolled in an institution that fails to meet the requirements established pursuant to subsection a. of this section, the secretary shall provide that institution with an opportunity to come into compliance with the requirements.
Nothing in this subsection shall be construed to prohibit a student from receiving any form of student assistance from the State for which the student is eligible at a different institution of higher education or proprietary institution licensed to offer academic degrees.
(cf: P.L.2022, c.127, s.1)
2. Section 1 of P.L.2021, c.223 (C.18A:62-65) is amended to read as follows:
1. As used in [this act] P.L.2021, c.223 (C.18A:62-65 et seq.):
["Cost of attendance" means cost of attendance as defined pursuant to 20 U.S.C. s.1087ll.
"Expected family contribution" means expected family contribution as determined pursuant to 20 U.S.C. s.1087nn.]
"External Scholarship" means a scholarship awarded by a business, private foundation, nonprofit organization, service group, philanthropist, government entity, or other organization. An external scholarship shall not include an award funded by a private organization which is affiliated with a public institution of higher education and requests the institution's assistance in selecting the recipients of scholarships.
"Financial need" means cost of attendance [minus expected family contribution] as defined pursuant to 20 U.S.C. s.1087ll.
"Institutional financial aid" means need-based and merit-based grants, scholarships, tuition waivers, and all other forms of financial assistance provided by a public institution of higher education that are not loans or work-study programs.
["Private scholarships" means scholarships awarded by businesses, private foundations, nonprofit organizations, and service groups. Private scholarships shall not include awards funded by a private organization which is affiliated with a public institution of higher education and requests the institution's assistance in selecting the recipients of scholarships.]
(cf: P.L.2021, c.223, s.1)
3. Section 2 of P.L.2021, c.223 (C.18A:62-66) is amended to read as follows:
2. a. A public institution of higher education may reduce a student's institutional financial aid as a result of the awarding of [private] external scholarships to the student only under the circumstances enumerated in [subsections b. and c.] subsection b. of this section provided that the institution notifies the student and the organization that awarded the external scholarship of the proposed reduction in institutional financial aid.
b. If a student's total financial aid from all sources exceeds the student's financial need, a public institution of higher education may reduce the student's institutional financial aid by returning funds in excess of a student's financial need to the organization that awarded the external scholarship until the student's total financial aid no longer exceeds the student's financial need provided that the institution receives approval from the organization that awarded the external scholarship that caused the reduction.
c. [In addition to the reduction authorized pursuant to subsection b. of this section, a public institution of higher education may reduce a student's institutional financial aid if the institution receives approval from the organization that awarded the private scholarship that caused the reduction authorized pursuant to subsection b. of this section.] (Deleted by amendment, P.L. , c. ) (pending before the Legislature as this bill)
d. A public institution of higher education may reduce a student athlete's institutional financial aid in order to comply with the individual or team financial aid restrictions of any athletic association, conference, or other group or organization with authority over intercollegiate athletics including, but not limited to, the National Collegiate Athletic Association.
e. A public institution of higher education shall annually evaluate a student's financial need and provide an estimate of institutional financial aid that shall not include reductions due to external scholarship funds.
(cf: P.L.2021, c.223, s.2)
4. (New section) As used in section 5 of P.L. , c. (C. ) (pending before the Legislature as this bill):
"Financial need" means cost of attendance as defined pursuant to 20 U.S.C. s.1087ll.
"External Scholarship" means a scholarship awarded by a business, private foundation, nonprofit organization, service group, philanthropist, government entity, or other organization. An external scholarship shall not include an award funded by a private organization which is affiliated with a public institution of higher education and requests the institution's assistance in selecting the recipients of scholarships.
"Institutional financial aid" means need-based and merit-based grants, scholarships, tuition waivers, and all other forms of financial assistance provided by an independent institution of higher education or a proprietary institution licensed to offer academic degrees that are not loans or work-study programs.
5. (New section) a. An independent institution of higher education or a proprietary institution licensed to offer academic degrees may reduce a student's institutional financial aid as a result of the awarding of external scholarships to the student only under the circumstances enumerated in subsection b. of this section provided that the institution notifies the student and the organization that awarded the external scholarship of the proposed reduction in institutional financial aid.
b. If a student's total financial aid from all sources exceeds the student's financial need, an independent institution of higher education or proprietary institution licensed to offer academic degrees may reduce the student's institutional financial aid by returning funds in excess of a student's financial need to the organization that awarded the external scholarship until the student's total financial aid no longer exceeds the student's financial need provided that the institution receives approval from the organization that awarded the external scholarship that caused the reduction.
c. An independent institution of higher education or proprietary institution licensed to offer academic degrees may reduce a student athlete's institutional financial aid in order to comply with the individual or team financial aid restrictions of any athletic association, conference, or other group or organization with authority over intercollegiate athletics including, but not limited to, the National Collegiate Athletic Association.
d. Each independent institution of higher education and proprietary institution licensed to offer academic degrees shall annually evaluate a student's financial need and provide an estimate of institutional financial aid that shall not include reductions due to external scholarship funds.
6. (New section) a. The Office of the Secretary of Higher Education shall post information about the institutional financial aid requirements established pursuant to P.L.2021, c.223 (C.18A:62-65 et seq.) and P.L. , c. (C. ) (pending before the Legislature as this bill) on the office's website, and shall engage in efforts to enhance awareness of the requirements among: students enrolled in institutions of higher education and their families; high school students and their families; college counselors; nonprofit organizations; scholarship providers; and financial aid departments at institutions of higher education.
b. Institutions of higher education and proprietary institutions licensed to offer academic degrees shall post information about the institutional financial aid requirements established pursuant to P.L.2021, c.223 (C.18A:62-65 et seq.) and P.L. , c. (C. ) (pending before the Legislature as this bill) on their financial aid websites.
c. The secretary shall ensure institutions of higher education and proprietary institutions licensed to offer academic degrees are in compliance with the institutional financial aid requirements established pursuant to P.L.2021, c.223 (C.18A:62-65 et seq.) and P.L. , c. (C. ) (pending before the Legislature as this bill).
7. (New section) Institutions of higher education and proprietary institutions licensed to offer academic degrees shall annually report to the Secretary of Higher Education on the number and percentage of students receiving external scholarships, disaggregated by: race, ethnicity, gender, family income, first-generation status, and military affiliation. The secretary shall annually publish the data on the office's website in a form that is clear, simple, and understandable.
8. The Secretary of Higher Education shall promulgate rules and regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to effectuate the provisions of this act.
9. This act shall take effect immediately and shall first apply to the first full academic year following the date of enactment.
STATEMENT
This bill removes expected family contribution from the calculation of student financial need and provides that independent institutions of higher education and proprietary institutions licensed to offer academic degrees may only reduce a student's institutional financial aid under certain circumstances.
This bill requires institutions of higher education and proprietary institutions licensed to offer academic degrees to include a statement that the acceptance of one or more external scholarships will not affect a student's eligibility for any other grants or scholarships provided that the student's total financial aid does not exceed a student's financial need.
Current law authorizes a public institution of higher education to reduce a student's institutional financial aid as a result of the awarding of an external scholarship to the student only under certain circumstances. If a student's total financial aid from all sources exceeds the student's financial need, defined as cost of attendance minus expected family contribution, a public institution may reduce the student's institutional financial aid until the student's total financial aid no longer exceeds the student's financial need. This bill would remove expected family contribution from the calculation of financial need. This bill also revises current law to require public institutions of higher education to return excess scholarship funds to the organization that awarded the scholarship and to require the institution to obtain approval from the organization that awarded the scholarship before reducing a student's financial aid award.
Similar to current law governing financial aid for public institutions of higher education, this bill also authorizes independent institutions of higher education and proprietary institutions licensed to offer academic degrees to reduce a student's institutional financial aid as a result of the awarding of external scholarships to the student only under certain circumstances. The bill provides that, if a student's total financial aid from all sources exceeds the student's financial need, independent institutions of higher education and proprietary institutions licensed to offer academic degrees may reduce the student's institutional financial aid until the student's total financial aid no longer exceeds the student's financial need if the institution returns the excess funds to, and receives permission from, the organization that awarded the scholarship. Further, independent institutions of higher education and proprietary institutions licensed to offer academic degrees may reduce a student athlete's institutional financial aid in order to comply with the individual or team financial aid restrictions of any athletic association, conference, or other group or organization with authority over intercollegiate athletics including, but not limited to, the National Collegiate Athletic Association.
Finally, the bill requires the Office of the Secretary of Higher Education to post information about the institutional financial aid requirements applicable to institutions of higher education and proprietary institutions on its website and to engage in efforts to increase public awareness of these requirements. Pursuant to the bill, the secretary is also required to annually collect data on financial aid recipients who are receiving external scholarships.
It is the intent of the sponsor that the bill's provisions protect any scholarship not awarded directly by an institution of higher education from causing a reduction in a student's institutional financial aid. Specifically, this bill is to ensure external scholarships supplement federal, State, and institutional aid, not supplant the aid.
