Student Protection and Success Act

Student Protection and Success Act

This bill amends the Higher Education Act of 1965 (HEA) to make institutions of higher education with low cohort repayment rates ineligible to participate in the federal student loan program and to establish a risk-sharing program to support institutions serving low- and moderate-income students.

The cohort repayment rate is the percentage of borrowers who pay at least one dollar toward the principal of their federal loans over a three-year period. It excludes borrowers who are in default, deferments, mandatory forbearance on repayment of a loan, or the Peace Corps.

Institutions with rates equal to or less than the cut-off rate are ineligible to participate in the federal student loan program under title IV of the HEA for three years. During the first year the bill is in effect, the cut-off rate is 45%. In subsequent years, the rate is the higher of the previous year's rate or 10% below the national average for the same type of institution, but must be below 70%. Institutions may appeal the loss of eligibility within 30 days of being notified by the Department of Education (ED).

The bill requires ED to award grants to institutions with a strong record of supporting low- and moderate-income students and funds the grants by requiring institutions with certain nonrepayment loan balances to make risk-sharing payments.

The institutions may use the grants to increase college access and success for the students using investments and practices such as: awarding additional need-based financial aid, enhancing academic and student support services, and accelerated learning opportunities.