PROTECT Students Act of 2025
Sponsored By: Senator Sen. Durbin, Richard J. [D-IL]
Introduced
Summary
This bill tightens accountability for colleges and strengthens borrower protections. It sets new gainful-employment tests, expands borrower-defense and closed-school discharges, and creates stronger oversight and transparency for institutions and third-party servicers.
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- Students and families: Programs must meet new debt-to-earnings tests to keep Title IV aid, failing if discretionary debt-to-earnings is at least 20% or annual debt-to-earnings is at least 8%. Closed-school rules also create an entitlement to discharge for students who cannot finish because a school closed.
- Institutions and servicers: Colleges must report detailed spending and by 2026–2027 begin meeting a minimum that effectively targets at least 30% of tuition and fees to instruction through 2031–2032. The bill expands oversight of third-party servicers, bans enforcement of arbitration clauses in enrollment contracts, and bars withholding official transcripts for unpaid balances.
- Borrowers and enforcement: The Department can discharge loans for substantial misrepresentation and must reimburse payments, clear adverse credit entries, and remove discharged loans from Title IV histories. The bill creates a new Enforcement Unit, an interagency oversight committee, a centralized Complaint Tracking System, and raises civil penalties up to $100,000 per violation or an alternative equal to 1.0% of an institution's Title IV funds per violation.
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Bill Overview
Analyzed Economic Effects
3 provisions identified: 2 benefits, 0 costs, 1 mixed.
More loan relief for student borrowers
If enacted, the Department would expand borrower-defense and closed-school discharges. You could get a covered Title IV loan discharged if the Department finds by a preponderance of the evidence that your school substantially misled you, breached its contract, engaged in deceptive recruitment, or faced certain legal or regulatory actions. Discharge would cancel what you owe, refund prior payments, stop default status, and correct credit records. The bill would allow group discharges for widespread misconduct, use a 180-day lookback for closed schools, and make some discharges automatic one year after a closure if you did not finish your program.
New college quality and spending rules
If enacted, the bill would set numeric gainful-employment tests and a 30% instruction spending floor for Title IV schools. A program could fail if discretionary debt-to-earnings is at least 20% and annual debt-to-earnings is at least 8%, or if earnings premium is zero or negative, and failing 2 of 3 years can make a program ineligible for Title IV. The Secretary must issue gainful-employment rules within one year and run annual IRS/SSA data matches and notify schools within 45 days of the match. Schools must report third-party servicer relationships and marketing costs, use one official job-placement definition and give data before application, post accreditor notices publicly, and meet state rules for out-of-state online programs (reciprocity capped at fewer than 200 students). The Department would publish instructional spending and program metrics on College Navigator and require warnings to students for at-risk schools.
Stronger enforcement and consumer rights
If enacted, the Department would build a new Enforcement Unit and a central complaint system with one toll-free line and website. The Department must answer complainants in writing within 90 days, and schools and servicers must respond to the Department within 60 days. Penalties and recoupment powers would be strengthened, including civil fines up to $100,000 per violation or 1% of recent Title IV funds and authority to recover funds for discharges or misconduct. The bill would bar new exceptions to the incentive-pay ban, require schools to certify compliance and stop withholding transcripts, and create a private right of action for students to sue for certain violations.
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Sponsors & CoSponsors
Sponsor
Sen. Durbin, Richard J. [D-IL]
IL • D
Cosponsors
Sen. Warren, Elizabeth [D-MA]
MA • D
Sponsored 3/12/2025
Sen. Merkley, Jeff [D-OR]
OR • D
Sponsored 3/12/2025
Roll Call Votes
No roll call votes available for this bill.
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