Wealthy Universities Must Pay Student Costs and Share Loan Default Risk
This law requires wealthy universities (with endowments over $1 billion) to cover a percentage of student attendance costs. It introduces a risk-sharing system where institutions must pay a penalty when their graduates default on federal student loans. Citizens will also gain access to detailed data on costs, graduate earnings, and debt rates, making college selection easier and more informed.
Key points
Mandatory Cost Match: Institutions with endowments over $1 billion must pay 25% to 75% of the cost of attendance for each full-time student, depending on the endowment size.
Loan Risk Sharing: Colleges will face penalties (ranging from 1% to 25% of the balance) calculated based on federal student loans where borrowers have gone into default.
Increased Data Transparency: Institutions must annually report detailed data, including 4-year graduation rates, median full-time wages of graduates (1, 3, and 5 years post-graduation), and average student loan debt, broken down by academic major.
Cost and Endowment Reporting: Universities must annually report total attendance costs, any increases, and the size and growth of their endowment funds (including contributions and investment gains).
Expired
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