Student Loan Overhaul: Fixed Repayment, No Forgiveness, and School Accountability
This Act restructures the federal student loan system by introducing new "simplification loans" with fixed repayment terms and borrowing limits. Crucially, these new loans eliminate eligibility for loan forgiveness programs starting July 1, 2024. Furthermore, the law mandates transparency from institutions regarding student outcomes and imposes financial penalties on schools based on loan non-repayment rates.
Key points
New Federal Direct simplification loans replace existing programs starting July 1, 2024, featuring interest rate caps and mandatory repayment periods (15 or 25 years).
All new simplification loans are ineligible for student loan forgiveness programs, including income-contingent repayment plans.
Colleges must publish detailed data on graduate employment rates, median earnings, and loan default rates, broken down by specific program of study.
Institutions face an annual "default rate fine" based on the total amount of outstanding student loans for which regular, on-time payments are not being made.
Status:
Expired
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