Student Protection and Success Act
Sponsored By: Representative Houchin
Introduced
Summary
This bill would tie federal student aid eligibility to colleges' student loan repayment performance. It would set a 15% cohort repayment threshold for ineligibility, require annual risk-sharing payments from institutions, and dedicate those payments to a new College Opportunity Bonus Program for colleges with repayment rates above 25%. Key eligibility and funding rules would phase in starting in fiscal year 2028, with earlier requirements for data publication and notice to institutions.
Show full summary
- Colleges: Institutions with a cohort repayment rate at or below 15% would face ineligibility for Title IV programs and an annual risk-sharing payment obligation tied to nonrepaid loan balances, with adjustments and caps linked to institution revenue measures.
- Students and families: Students at colleges that fail the repayment threshold could lose access to Pell grants, federal direct loans, and Perkins loans, which would affect borrowing and aid options.
- Accountability and incentives: The bill creates a College Opportunity Bonus Program funded by risk-sharing payments for schools with repayment rates above 25% and revises how student service expenditures are measured by excluding marketing, recruitment, and intercollegiate athletics. The Department of Education must publish cohort repayment rates and report on repayment best practices.
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Bill Overview
Analyzed Economic Effects
2 provisions identified: 0 benefits, 1 costs, 1 mixed.
Colleges lose federal aid for low repayment
If enacted, starting in fiscal year 2028 a college with a cohort repayment rate of 15% or less would be ineligible to take part in certain federal student loan programs for that year and the next two years. Those colleges would also lose eligibility for Pell Grants, the Federal Perkins Loan program, and a federal student loan insurance program. The Education Department would publish each institution's cohort repayment rate and notify schools with low rates. Colleges could appeal within 30 days, but if they keep participating during an unsuccessful appeal they would have to reimburse loans and related costs made during the appeal.
New college risk fees and bonuses
If enacted, starting in fiscal year 2028 colleges in the Direct Loan program would pay an annual risk-sharing fee based on their cohort nonrepayment loan balance. The fee would be 2% of an adjusted nonrepayment balance, reduced by an unemployment-rate adjustment based on the prior 3 fiscal years, and capped at 2.5% of the school's annual revenues (excluding auxiliary and hospital revenues). Those risk-sharing payments would fund a new College Opportunity Bonus Program that gives grants to colleges with cohort repayment rates above 25%. Grants would be used for extra need-based aid for Pell students, student supports, and accelerated learning, and individual awards would be capped at 2.5% of annual revenues. The Education Secretary would also publish pre-implementation notices of what fees would be and report best practices for improving repayment. Reporting rules for counting student service spending would change for use in the grant formula.
Sponsors & CoSponsors
Sponsor
Houchin
IN • R
Cosponsors
Perez
WA • D
Sponsored 3/19/2026
Roll Call Votes
No roll call votes available for this bill.
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