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119-hr-8759119th CongressWALLET

Student Loan Reform Act

Sponsored By: Representative Perry, Scott [R-PA-10]

Introduced

Summary

This bill would create an Institutional Cosigner Program that lets an eligible college elect to cosign all new federal Direct Loans for an academic year. Participating schools would take on legal repayment responsibility if borrowers default and cosigned loans would carry interest rates set below the standard federal rate.

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  • Students and families: Students at participating schools would access loans with lower interest rates when their institution cosigns. Borrowers who default would still be treated as in default for credit reporting and collections while the school is repaying, and any payments recovered from the borrower would reduce the balance.
  • Institutions: A school would have to sign an annual agreement and cosign the revised master promissory note, which would show cosigner liability, the program interest rate, and a field for an institutional signature. If a borrower defaults, the institution would owe repayment 90 days after default and would repay under a standard 10-year schedule until the balance is cleared or the loan is rehabilitated.
  • Default-rate measurement: The bill would set cohort default thresholds at 40% for institutions in the cosigner program and 30% for institutions that are not.

The program would take effect on July 1, 2026.

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Bill Overview

Analyzed Economic Effects

1 provisions identified: 0 benefits, 0 costs, 1 mixed.

Schools could cosign student loans

If enacted, the bill would create an Institutional Cosigner Program effective July 1, 2026. An eligible college or university would be able to agree to cosign all new Direct Loans to its students for an academic year. Cosigned loans would get a lower interest rate set by the Secretary of Education and the master promissory note would be revised so the institution can sign. If a borrower defaults and the loan remains unrepaired 90 days after default, the institution would have to repay the outstanding principal and interest on a standard 10-year schedule until the loan is rehabilitated or fully paid; the borrower would still be considered in default for credit reporting and collections while the institution is paying. The Department would post a yearly public list of participating institutions. For cohort default rate calculations, the bill would set the threshold at 40% for participating schools and 30% for nonparticipating schools in the year the rate is determined.

Sponsors & CoSponsors

Sponsor

Perry, Scott [R-PA-10]

PA • R

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

No roll call votes available for this bill.

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