What does Preamble of Student Protection and Success Act do?

This bill, formally titled 'To amend the Higher Education Act of 1965 to provide for institutional ineligibility based on low cohort repayment rates and to require risk-sharing payments of institutions of higher education,' proposes amendments to the Higher Education Act of 1965. The bill aims to establish a system of institutional ineligibility based on low cohort repayment rates. It also seeks to require risk-sharing payments from institutions of higher education.

What does SHORT TITLE. of Student Protection and Success Act do?

This Act is formally titled the Student Protection and Success Act.

What does INSTITUTIONAL INELIGIBILITY BASED ON LOW COHORT REPAYMENT RATE. of Student Protection and Success Act do?

This section amends the Higher Education Act of 1965 to establish institutional ineligibility based on a low cohort repayment rate. Beginning with fiscal year 2028, an institution with a cohort repayment rate of 15% or less will be ineligible to participate in programs under part D for three fiscal years. Institutions can appeal a loss of eligibility to the Secretary within 30 days. During an appeal, an institution may continue participation if it demonstrates an inaccurate calculation that would increase the repayment rate above 15%. If the appeal is unsuccessful, the institution must repay loans made to borrowers attending the institution during the appeal period. The cohort repayment rate is calculated based on borrowers entering repayment on certain federal loans, with specific exceptions for borrowers in deferment or forbearance. The Secretary is required to publish cohort repayment rates for institutions. The legislation also extends ineligibility based on low cohort repayment rates to Pell grants, the student loan insurance program, and Federal Perkins loans.

What does COLLEGE OPPORTUNITY BONUS PROGRAM. of Student Protection and Success Act do?

This section establishes the College Opportunity Bonus Program under the Higher Education Act of 1965. Beginning in fiscal year 2028, the Secretary will award grants to eligible institutions of higher education. An eligible institution must have a cohort repayment rate greater than 25 percent. Grants are awarded to institutions demonstrating a strong record of increasing college affordability and success for low- and moderate-income students. Funds can be used to support reforms, including awarding need-based financial aid, enhancing student support services, and establishing accelerated learning opportunities. Grant amounts are determined by a formula considering the number of Pell Grant-eligible students, cohort repayment rates for Pell Grant-eligible students, and student service expenditures. Each institution's grant cannot exceed 2.5% of its total annual revenues and investment returns, less auxiliary and hospital revenues. The funds are intended to supplement, not supplant, existing state and institutional funding for college affordability initiatives. The program is funded by risk-sharing payments received by the Secretary under section 454(d).

What does RISK-SHARING PAYMENTS. of Student Protection and Success Act do?

This section amends Section 454 of the Higher Education Act of 1965. Beginning in fiscal year 2028, institutions participating in the direct student loan program must remit a risk-sharing payment to the Secretary. The risk-sharing payment is based on the institution's cohort nonrepayment loan balance. The cohort nonrepayment loan balance is calculated based on borrowers who haven't made a $1 principal reduction in three consecutive fiscal years since entering repayment, deferment, or forbearance. Certain deferments and forbearances, such as those for graduate fellowships, military service, or Peace Corps volunteering, are excluded from the nonrepayment loan balance calculation. The risk-sharing payment is generally 2% of the cohort nonrepayment loan balance, but capped at 2.5% of the institution's total annual revenues and investment returns. The amount is determined by subtracting an amount based on the national unemployment rate from the cohort nonrepayment loan balance.

What does REPORT. of Student Protection and Success Act do?

This section requires the Secretary of Education to submit a report to Congress within six months of the Student Protection and Success Act's enactment. The report must detail best practices for institutions of higher education to improve student loan repayment rates. The report should also include recommendations for improving repayment rates, particularly at institutions serving a large proportion of low-income students.

What does STUDENT SERVICE EXPENDITURES AND RESOURCES. of Student Protection and Success Act do?

This section amends Section 153(a)(1)(I) of the Education Sciences Reform Act of 2002. The amendment clarifies the definition of 'student service expenditures' to include instruction, information technology, and activities contributing to students' emotional, physical, intellectual, cultural, and social development. Student service expenditures specifically exclude marketing, recruitment, and intercollegiate athletic programs. The amendment defines 'student service resources' as resources that could reasonably be allocated to student service expenditures, including net tuition revenues, state and local appropriations, endowment income, and revenues related to student housing and food services. The amendment adds 'recruitment and marketing expenditures' as a defined category.

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Student Protection and Success Act

Last updated: 3/19/2026 · Introduced: 3/19/2026

Author: Erin Houchin (R-IN)

TL;DR (AI)

The bill establishes a system where institutions with a cohort repayment rate of 15% or less become ineligible for federal programs, starting in fiscal year 2028.
It creates the College Opportunity Bonus Program, awarding grants to institutions with repayment rates above 25% that demonstrate a commitment to affordability and success for low- and moderate-income students.
Institutions participating in the direct student loan program will be required to make risk-sharing payments to the Secretary, calculated based on borrowers who haven't made a principal reduction in three years.
The legislation expands the definition of 'student service expenditures' to include instruction and activities supporting student development, while excluding marketing and athletics.
The Secretary of Education must report to Congress within six months of enactment, detailing best practices and recommendations for improving student loan repayment rates, particularly at institutions serving low-income students.

119th Congressin committeeS. 4114(In Committee)Official page

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Includes provisions on preamble, short title., and 5 more.

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