Bill would cut off federal aid to colleges with low loan repayment rates

What does this do?

The Student Protection and Success Act would cut off colleges from federal student loans, Pell Grants, and other federal aid for three years if 15% or fewer of their borrowers make even a $1 loan payment within two years of entering repayment, starting in 2028. It also creates a "College Opportunity Bonus Program" giving grants to colleges with strong repayment rates (above 25%) and many low-income students, and a "risk-sharing" system charging colleges penalties based on borrower repayment failures.

Who does it affect?

The bill mainly affects colleges and universities in federal financial aid programs, particularly for-profit or under-resourced schools with poor repayment outcomes, and their students.

Why does it matter?

Schools losing aid eligibility could leave enrolled students without access to federal loans or grants, while poor-performing schools face financial penalties meant to push better student outcomes.

What does it cost, and who pays?

Colleges with low repayment rates would face financial penalties tied to borrower repayment failures, and schools that lose an aid appeal after continuing to receive loan funds during the appeal must repay the government.

Where does it stand?