Shaheen, Young Reintroduce Bipartisan Bill to Curb Skyrocketing Student Debt and Improve Institutional Accountability
(Washington, DC) — Today, U.S. Senators Jeanne Shaheen (D-NH) and Todd Young (R-IN) reintroduced the Student Protection and Success Act, legislation to curb skyrocketing student debt by increasing higher education institutions’ accountability for their students’ ability to repay their loans. This bipartisan bill would remove federal student loan eligibility from all colleges and universities where less than 15 percent of their students are able to begin repaying their loans within three years of graduating or leaving school. The bill would also require schools to pay a fee based on the total loan volume their students are not able to repay, and the bill would then use those funds to support schools that are better assisting low-income students. The legislation aims to incentivize institutions to have a vested interest in the success of their students to properly prepare them for the workforce so graduates can secure good-paying jobs and pay down their loans.
“New Hampshire borrowers have some of the highest student debt rates in the nation, and it’s long past time to put in place policies that prioritize college affordability,” said Senator Shaheen. “An important part of that effort begins with ensuring accountability at the institutions where our students invest their money, time and energy. Schools should be held responsible for keeping their promise to students, that if they work hard and put in the time, they’ll finish with a degree that allows them to compete in the workforce. My bipartisan bill will help ensure that graduates are set up for success– not a lifetime of debt.”
"As part of my Fair Shot Agenda, I'm committed to making sure everyone has a fair shot at success, including those facing crippling student loan debt," said Senator Young. "By holding institutions of higher education accountable, our legislation will help all students reach the success they were assured by their institutions so they can access meaningful career opportunities with bright futures in the workforce."
The bipartisan bill would reform the eligibility standard for access to Title IV federal student assistance by deeming schools ineligible for receiving future Title IV aid if they have less than 15 percent of graduates repaying loans. Additionally, it would require higher education institutions be held accountable and share responsibility for the success of students by requiring institutions to pay a “risk-sharing fee,” which is a fee equal to a percentage of students’ loan balance that is not being repaid to the Department of Education. The bill would reward institutions that serve a significant number of low-income students by giving bonus payments to qualifying institutions through revenue gained from the risk-sharing provision. These payments would be dispersed based on the number and percentage of Pell grant recipients enrolled at the school, their repayment rates and the school’s spending on student services.
Americans owe more than $1.5 trillion in student loan debt, which surpasses total credit card debt. New Hampshire had one of the highest average student loan debt rates in the nation for the Class of 2017, with the average student owing $34,415. Senator Shaheen has prioritized efforts to improve college affordability and confront the student debt burden affecting more than 40 million Americans across the country. Shaheen worked with a bipartisan group of lawmakers to introduce student loan refinancing legislation, the Bank on Students Emergency Loan Refinancing Act, which would allow undergraduate borrowers repaying public or private loans to refinance those loans at lower interest rates, reducing monthly payments and helping borrowers repay loans sooner. In April, Shaheen introduced bipartisan legislation with Senators Baldwin (D-WI), Braun (R-IN) and Fischer (R-NE) to combat student debt relief scams. Earlier this month, Shaheen worked with Senators Michael Bennet (D-CO) and Johnny Isakson (R-GA) to reintroduce legislation that would provide tax relief for AmeriCorps members who earn federal Segal Education Awards. And on Monday, Shaheen announced that she and Senator Maggie Hassan (D-NH) helped introduce bicameral legislation to give borrowers filing for bankruptcy the option of discharging their student loans.
Bill text of the legislation is available here