Student Protection: Holding Colleges Accountable for Loan Repayment Rates.
This law introduces financial accountability for colleges whose students struggle to repay federal loans. Starting in 2027, institutions where 15% or fewer borrowers reduce their loan principal will lose access to federal student aid programs, including loans and Pell Grants. The goal is to protect students and taxpayers by penalizing schools that offer low-value programs leading to high debt.
Key points
Colleges with very low loan repayment rates (15% or less) will lose eligibility for federal student loans and Pell Grants starting in 2027.
Institutions must make "risk-sharing payments" based on the balance of loans that students fail to reduce, forcing schools to share the financial burden of poor outcomes.
High-performing schools (repayment rate above 25%) will receive bonus grants to increase financial aid and support services for low-income students.
Status:
Expired
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