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Penalties for Colleges with Student Loan Defaults and Tuition Hikes

New rules impose financial penalties on wealthy universities if a high percentage of their students default or underpay federal student loans. Additionally, these institutions may face a higher tax if they increase tuition above an inflation-adjusted baseline. The aim is to encourage universities to better support students in loan repayment and control rising education costs.
Key points
Universities with large endowments (over $2.5 billion) will face penalties if a high percentage of their students default on federal student loans, are delinquent, or underpay.
The penalty amounts will depend on the percentage of students with repayment issues and will increase gradually over the years.
Wealthy universities that raise tuition above an inflation-adjusted base amount will pay a significantly higher tax on their net investment income.
The legislation aims to increase institutional accountability for student financial outcomes and control the cost of higher education.
article Official text account_balance Process page
Introduced
Citizen Poll
No votes cast
Additional Information
Print number: 119_HR_713
Sponsor: Rep. Van Duyne, Beth [R-TX-24]
Process start date: 2025-01-23
Lustra uses Artificial Intelligence. Verify details in source documents.
Summarized by: gemini-2.5-flash
Source data: api.congress.gov
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OFFICIAL LEGAL TITLE

Preventing Financial Exploitation in Higher Education Act

FREQUENTLY ASKED QUESTIONS

What is the official ID of this bill?

The official print number for this legislation is 119_HR_713.

Which chamber initiated this legislation?

This legislation was initiated in the House of Representatives.

When did the legislative process begin?

The process officially started on 2025-01-23.

What are the main provisions?

Key points include:

  • Universities with large endowments (over $2.5 billion) will face penalties if a high percentage of their students default on federal student loans, are delinquent, or underpay.
  • The penalty amounts will depend on the percentage of students with repayment issues and will increase gradually over the years.
  • Wealthy universities that raise tuition above an inflation-adjusted base amount will pay a significantly higher tax on their net investment income.
  • The legislation aims to increase institutional accountability for student financial outcomes and control the cost of higher education.
What is the specific legal status?

The current status is Introduced.

Where can I read the full text of this legislation?

The full official text is available at: View full text

Who is the primary sponsor?

The primary sponsor is Rep. Van Duyne, Beth [R-TX-24].

What is the latest detailed status?

The latest detailed status is: Introduced in House

Is this summary verified?

Yes. This content was analyzed by AI and verified by the Lustra Judge System on 2025-12-23.

CATEGORIES

Education Taxes