Revises calculation of student financial need and provides circumstances for reduction of financial aid at institutions of higher education and proprietary institutions.

This bill revises how New Jersey institutions calculate student financial need by removing "expected family contribution" from the formula, now defining financial need as simply the cost of attendance. It establishes clear rules for when institutions can reduce institutional financial aid due to external scholarships: institutions may only reduce aid if total financial aid exceeds a student's financial need, must return excess funds to the scholarship provider, and must obtain that provider's approval before making reductions. The bill requires institutions to include specific statements in financial aid award letters clarifying that external scholarships won't affect other aid as long as total aid doesn't exceed financial need, and mandates annual reporting of scholarship data by demographic factors. It applies to all public and private institutions of higher education, as well as proprietary institutions licensed to offer academic degrees in New Jersey.