Colleges and universities would face new federal rules tying their access to student-aid programs to how well their former students repay loans. Starting in fiscal year 2028, any school where 15 percent or fewer borrowers reduce their loan principal by at least one dollar within two years would lose eligibility for federal Direct Loans, Pell Grants, and Perkins Loans for that year and the next two, with a 30-day appeals process. Schools allowed to keep participating during a failed appeal would have to repay the government for loans issued in the meantime. Institutions would also owe annual "risk-sharing" payments equal to 2 percent of the unpaid loan balances of their non-repaying borrowers, adjusted for unemployment and capped at 2.5 percent of a school's revenue. Those payments would fund a new College Opportunity Bonus Program awarding grants to schools with repayment rates above 25 percent that serve many low- and moderate-income students. The Department of Education would have to publish each school's repayment rate, report to Congress on best practices for improving repayment, and collect new data on student-service spending that excludes marketing, recruitment, and athletics.
Average Household Impact
- Federal student aid access — Cut off at schools with repayment rate at or below 15%
- Need-based aid for Pell students — Bonus grants fund extra aid at high-repayment schools
Transparency & Accountability
- Cohort repayment rate disclosure — Secretary must publish each school's rate
- Repayment-based eligibility rules — Schools below 15% repayment lose federal loan access
- Risk-sharing payments — Schools remit 2% of unpaid cohort loan balances to the Secretary
- Student-service spending reports — New data required, excluding marketing and athletics
Congressional Summary
Student Protection and Success Act This bill establishes certain consequences for institutions of higher education (IHEs) that have low student loan repayment rates or high student loan balances among their students.Specifically, the bill makes an IHE ineligible for federal student financial aid programs for three fiscal years if only 15% or less of its students are able to start repaying the principal of their loans by specified deadlines.Additionally, the bill creates a grant program through which the Department of Education must award grants to eligible IHEs (i.e., IHEs with a student loan repayment rate above 25%) that have a strong record of supporting low- and moderate-income students. The bill funds the grants by requiring IHEs with certain nonrepayment loan balances to make risk-sharing payments. Grants may be used to increase college access and success for the students using investments and practices such as awarding additional need-based financial aid, enhancing academic and student support services, and establishing or expanding accelerated learning opportunities.The bill also requires the National Center for Education Statistics to collect information on student service expenditures, student service resources, and recruitment and marketing expenditures.
Details
- Congress
- 119th
- Chamber
- House
- Status
- summarized
- Action
- Introduced in House
- Action Date
- 2026-03-19
- Date Added
- 2026-06-30
- Source
- Congress.gov →
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