University Accountability for Student Loan Defaults and Tuition Hikes
This act imposes financial penalties on higher education institutions with large endowments if a high percentage of their students default or make insufficient payments on federal student loans. Additionally, these institutions may face a higher tax if they increase tuition above an inflation-adjusted base amount. The goal is to encourage universities to better prepare students for loan repayment and control rising education costs.
Key points
Universities with endowments of $2.5 billion or more will pay penalties if a high percentage of their students default, are delinquent, or underpay federal student loans.
Penalty rates and thresholds for loan repayment issues will gradually increase/decrease over the years.
Large endowment institutions that raise tuition above an inflation-adjusted base amount will face a significantly higher tax on their net investment income.
Penalties paid by institutions do not affect the rights or obligations of student borrowers.
Status:
Expired
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