II 

115TH CONGRESS 

1ST SESSION S. 2231 

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. 

IN THE SENATE OF THE UNITED STATES 

DECEMBER 14, 2017 

Mrs. SHAHEEN (for herself and Mr. HATCH) introduced the following bill; 

which was read twice and referred to the Committee on Health, Education, Labor, and Pensions 

A BILL 

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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Student Protection and 

5 Success Act’’. 


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1 SEC. 2. INSTITUTIONAL INELIGIBILITY BASED ON LOW CO2 HORT REPAYMENT RATE. 

3 (a) IN GENERAL.—Section 455 of the Higher Edu4 cation Act of 1965 (20 U.S.C. 1087e) is amended by add5 ing at the end the following: 

6 ‘‘(r) INELIGIBILITY DUE TO LOW COHORT REPAY7 MENT RATE.— 

8 ‘‘(1) IN GENERAL.—Beginning with fiscal year 

9 2022 and each succeeding fiscal year, an institution 

10 that has a cohort repayment rate that is equal to or 

11 less than 15 percent shall not be eligible to partici12 pate in a program under this part for such fiscal 

13 year and for the 2 succeeding fiscal years. 

14 ‘‘(2) APPEALS.— 

15 ‘‘(A) IN GENERAL.—An institution may 

16 appeal the loss of eligibility under this sub17 section to the Secretary within 30 days of re18 ceiving notification from the Secretary of the 

19 loss of eligibility under this subsection. 

20 ‘‘(B) CONTINUED PARTICIPATION.—Dur21 ing an appeal under subparagraph (A), the Sec22 retary may permit the institution to continue to 

23 participate in a program under this part if the 

24 institution demonstrates to the satisfaction of 

25 the Secretary that the Secretary’s calculation of 

26 its cohort repayment rate is not accurate, and 


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1 that recalculation would increase its cohort re2 payment rate to be more than 15 percent. 

3 ‘‘(C) REQUIRED PAYMENT.—If an institu4 tion continues to participate in a program 

5 under this part, and the institution’s appeal of 

6 the loss of eligibility is unsuccessful, the institu7 tion shall be required to pay to the Secretary an 

8 amount equal to the amount of loans made by 

9 the Secretary under this part to borrowers at10 tending, or planning to attend, that institution 

11 during the pendency of such appeal and the in12 terest, special allowance, reinsurance, and any 

13 related payments made by the Secretary (or 

14 which the Secretary is obligated to make) with 

15 respect to such loans. 

16 ‘‘(3) COHORT REPAYMENT RATE.— 

17 ‘‘(A) IN GENERAL.—In this subsection, the 

18 term ‘cohort repayment rate’ means, for any 

19 fiscal year beginning with fiscal year 2022— 

20 ‘‘(i) in the case in which 30 or more 

21 borrowers at the institution enter repay22 ment on Federal Direct Stafford Loans, 

23 Federal Direct Unsubsidized Stafford 

24 Loans, Federal Direct PLUS Loans, or 

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1 ceived for attendance at the institution, the 

2 percentage of those borrowers who are not 

3 in default and who make at least a one 

4 dollar reduction on their initial student 

5 loan principal balance before the end of the 

6 second fiscal year following the fiscal year 

7 in which the borrowers entered repayment, 

8 except as provided in subparagraph (B); 

9 and 

10 ‘‘(ii) in the case in which less than 30 

11 borrowers at the institution enter repay12 ment on Federal Direct Stafford Loans, 

13 Federal Direct Unsubsidized Stafford 

14 Loans, Federal Direct PLUS Loans, or 

15 Federal Direct Consolidation Loans, re16 ceived for attendance at the institution, the 

17 percentage of those borrowers plus all of 

18 the borrowers at the institution who en19 tered repayment on such loans (or on the 

20 portion of a loan made under section 428C 

21 that is used to repay any such loans) in 

22 the 3 fiscal years preceding the fiscal year 

23 for which the determination is made, who 

24 are not in default and who make at least 

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1 dent loan principal balance before the end 

2 of the second fiscal year following the year 

3 in which the borrowers entered repayment, 

4 except as provided in subparagraph (B). 

5 ‘‘(B) EXCEPTION.—The ‘cohort repayment 

6 rate’ calculation under subparagraph (A) shall 

7 not include in the calculation a borrower who 

8 is— 

9 ‘‘(i) in deferment on repayment of a 

10 loan described in subparagraph (A) due to 

11 study in an approved graduate fellowship 

12 program or in an approved rehabilitation 

13 training program for the disabled; 

14 ‘‘(ii) in deferment on repayment of a 

15 loan described in subparagraph (A) during 

16 a period of at least half-time enrollment in 

17 college or a career school; 

18 ‘‘(iii) in deferment on repayment of a 

19 loan described in subparagraph (A) during 

20 a period of service qualifying for loan dis21 charge or cancellation under part E; 

22 ‘‘(iv) in deferment on repayment of a 

23 loan described in subparagraph (A) due to 

24 active duty military service of the borrower 


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1 during a war, military operation, or na2 tional emergency; 

3 ‘‘(v) in deferment on repayment of a 

4 loan described in subparagraph (A) during 

5 the 13 months following the conclusion of 

6 qualifying active duty military service by 

7 the borrower, or until the borrower returns 

8 to enrollment on at least a half-time basis, 

9 whichever is earlier, if the borrower is a 

10 member of the National Guard or other re11 serve component of the Armed Forces and 

12 was called or ordered to active duty while 

13 enrolled at least half-time at an eligible 

14 school or within 6 months of having been 

15 enrolled at least half-time; 

16 ‘‘(vi) in mandatory forbearance on re17 payment of a loan described in subpara18 graph (A) for the full fiscal year; or 

19 ‘‘(vii) serving as a volunteer under the 

20 Peace Corps Act (22 U.S.C. 2501 et seq.) 

21 or the Domestic Volunteer Service Act of 

22 1973 (42 U.S.C. 4950 et seq.). 

23 ‘‘(C) PUBLICATION OF REPAYMENT

24 RATES.—The Secretary shall publish the cohort 


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1 repayment rates for institutions determined 

2 under this subsection. 

3 ‘‘(4) NOTIFICATION.—Beginning with the first 

4 fiscal year for which data are available after the date 

5 of enactment of the Student Protection and Success 

6 Act and each succeeding fiscal year until fiscal year 

7 2022, the Secretary shall notify each institution that 

8 has a cohort repayment rate that is equal to or less 

9 than 15 percent that the institution risks losing eli10 gibility to participate in a program under this 

11 part.’’. 

12 (b) INELIGIBILITY IN OTHER PROGRAMS.— 

13 (1) PELL GRANTS.—Section 401(j) of the High14 er Education Act of 1965 (20 U.S.C. 1070a(j)) is 

15 amended— 

16 (A) in the heading, by striking ‘‘BASED ON

17 DEFAULT RATES’’; 

18 (B) in paragraph (1), by inserting ‘‘until 

19 fiscal year 2022’’ after ‘‘succeeding fiscal year’’; 

20 (C) in paragraph (2), by inserting ‘‘or co21 hort repayment rate determination’’ after ‘‘de22 fault rate determination’’; and 

23 (D) by adding at the end the following: 

24 ‘‘(3) INELIGIBILITY BASED ON LOW COHORT

25 REPAYMENT RATES.—No institution of higher eduVerDate Sep 11 2014 19:46 Dec 18, 2017 Jkt 079200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S2231.IS S2231

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1 cation shall be an eligible institution for purposes of 

2 this subpart if such institution of higher education 

3 is ineligible to participate in a program under part 

4 D due to a low cohort repayment rate, as deter5 mined under section 455(r).’’. 

6 (2) STUDENT LOAN INSURANCE PROGRAM.— 

7 Section 435(a) of the Higher Education Act of 1965 

8 (20 U.S.C. 1085(a)) is amended— 

9 (A) in paragraph (2)— 

10 (i) in the heading, by striking ‘‘BASED

11 ON HIGH DEFAULT RATES’’; 

12 (ii) in subparagraph (A), by striking 

13 ‘‘An institution’’ and inserting ‘‘Until fis14 cal year 2022, an institution’’; and 

15 (iii) by adding at the end the fol16 lowing: 

17 ‘‘(E) No institution of higher education shall be 

18 an eligible institution for purposes of this part if 

19 such institution of higher education is ineligible to 

20 participate in a program under part D due to a low 

21 cohort repayment rate, as determined under section 

22 455(r).’’; and 

23 (B) in paragraph (6)(A), by inserting ‘‘and 

24 until fiscal year 2022,’’ after ‘‘July 1, 1999,’’. 


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1 (3) FEDERAL PERKINS LOANS.—Section 462 of 

2 the Higher Education Act of 1965 (20 U.S.C. 

3 1087bb) is amended— 

4 (A) in subsection (a)— 

5 (i) in paragraph (1), by inserting ‘‘or 

6 the institution is ineligible to participate in 

7 a program under part D due to a low co8 hort repayment rate, as determined under 

9 section 455(r)’’ after ‘‘subsection (f)’’; and 

10 (ii) in paragraph (2)(D), by inserting 

11 ‘‘or the institution is ineligible to partici12 pate in a program under part D due to a 

13 low cohort repayment rate, as determined 

14 under section 455(r)’’ after ‘‘subsection 

15 (f)’’; 

16 (B) in subsection (b)— 

17 (i) in paragraph (2), by inserting ‘‘or 

18 the institution is ineligible to participate in 

19 a program under part D due to a low co20 hort repayment rate, as determined under 

21 section 455(r)’’ after ‘‘subsection (f)’’; and 

22 (ii) in paragraph (3), by inserting ‘‘or 

23 the institution is ineligible to participate in 

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1 hort repayment rate, as determined under 

2 section 455(r)’’ after ‘‘subsection (f)’’; 

3 (C) in subsection (e)— 

4 (i) in paragraph (2), by inserting 

5 ‘‘until fiscal year 2022,’’ after ‘‘succeeding 

6 fiscal year’’; and 

7 (ii) in paragraph (3)— 

8 (I) in subparagraph (A), by in9 serting ‘‘until fiscal year 2022,’’ after 

10 ‘‘any succeeding fiscal year’’; and 

11 (II) by adding at the end the fol12 lowing: 

13 ‘‘(F) LOW COHORT REPAYMENT RATES.— 

14 An institution that is ineligible to participate in 

15 a program under part D due to a low cohort re16 payment rate, as determined under section 

17 455(r), shall not be eligible to participate in a 

18 program under this part.’’; and 

19 (D) in subsection (f)(2), by inserting ‘‘until 

20 fiscal year 2022,’’ after ‘‘subsequent years’’. 

21 SEC. 3. COLLEGE OPPORTUNITY BONUS PROGRAM. 

22 Subpart 1 of part A of title IV of the Higher Edu23 cation Act of 1965 (20 U.S.C. 1070a et seq.) is amended 

24 by adding at the end the following: 


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1 ‘‘SEC. 401B. COLLEGE OPPORTUNITY BONUS PROGRAM. 

2 ‘‘(a) PROGRAM AUTHORITY.— 

3 ‘‘(1) IN GENERAL.—Beginning with fiscal year 

4 2022 and each succeeding fiscal year, the Secretary 

5 shall award grants to eligible institutions of higher 

6 education that are distributed under a formula de7 termined by the Secretary under subsection (d). 

8 ‘‘(2) ELIGIBLE INSTITUTION.—In this section, 

9 the term ‘eligible institution of higher education’ 

10 means an institution of higher education that has a 

11 cohort repayment rate (as defined in section 

12 455(r)(3)) that is greater than 25 percent. 

13 ‘‘(b) GRANTS.—The Secretary shall award grants to 

14 eligible institutions of higher education that the Secretary 

15 determines have a strong record of making college more 

16 affordable and increasing college access and success for 

17 low-income and moderate-income students. 

18 ‘‘(c) USES OF FUNDS.—Each eligible institution of 

19 higher education that receives a grant under this section 

20 may use the grant funds to support reforms to further 

21 increase college access and success for low- and moderate22 income students, by making key investments and adopting 

23 best practices, including by considering best practices re24 ported under section 5 of the Student Protection and Suc25 cess Act, and by— 


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1 ‘‘(1) awarding additional need-based financial 

2 aid to students enrolled at the institution who are el3 igible to receive a Federal Pell Grant; 

4 ‘‘(2) enhancing academic and student support 

5 services; and 

6 ‘‘(3) establishing or expanding accelerated 

7 learning opportunities. 

8 ‘‘(d) AMOUNT OF GRANT FUNDS.—Each eligible in9 stitution of higher education that receives a grant under 

10 this section shall receive annual grant funds based on a 

11 formula determined by the Secretary that equally con12 siders— 

13 ‘‘(1) the number of students enrolled at the in14 stitution who are eligible to receive a Federal Pell 

15 Grant; 

16 ‘‘(2) the percentage of all students enrolled at 

17 the institution who are eligible to receive a Federal 

18 Pell Grant; and 

19 ‘‘(3) the cohort repayment rate (as defined in 

20 section 455(r)(3)) of students enrolled at the institu21 tion who are eligible to receive a Federal Pell Grant. 

22 ‘‘(e) SUPPLEMENT NOT SUPPLANT.—Funds made 

23 available under this section shall be used to supplement, 

24 and not supplant— 


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1 ‘‘(1) other State funds that States would other2 wise expend to carry out activities under this section 

3 to improve college affordability and graduate addi4 tional low- and moderate-income students; and 

5 ‘‘(2) institutional funds that eligible institutions 

6 of higher education receiving a grant under this sec7 tion would otherwise expend to carry out activities 

8 under this section to improve college affordability 

9 and graduate additional low- and moderate-income 

10 students. 

11 ‘‘(f) FUNDING.—The grant program under this sec12 tion shall be funded only with risk-sharing payments re13 ceived by the Secretary under section 454(d).’’. 

14 SEC. 4. RISK-SHARING PAYMENTS. 

15 Section 454 of the Higher Education Act of 1964 (20 

16 U.S.C. 1087d) is amended— 

17 (1) in subsection (a)— 

18 (A) in paragraph (5), by striking ‘‘and’’; 

19 (B) in paragraph (6), by striking the pe20 riod at the end and inserting ‘‘; and’’; and 

21 (C) by adding at the end the following: 

22 ‘‘(7) provide that the institution accepts the in23 stitutional risk-sharing requirements under sub24 section (d), if applicable.’’; and 

25 (2) by adding at the end the following: 


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1 ‘‘(d) INSTITUTIONAL RISK-SHARING BASED ON CO2 HORT NONREPAYMENT LOAN BALANCES.— 

3 ‘‘(1) IN GENERAL.—Beginning with fiscal year 

4 2022 and each succeeding fiscal year, each institu5 tion of higher education participating in the direct 

6 student loan program under this part shall remit to 

7 the Secretary, at such times as the Secretary may 

8 specify, a risk-sharing payment based on the cohort 

9 nonrepayment loan balance of the institution, as de10 termined under paragraph (2). 

11 ‘‘(2) DETERMINATION OF RISK-SHARING PAY12 MENTS.— 

13 ‘‘(A) DETERMINATION OF COHORT LOAN

14 BALANCE.—The cohort loan balance of an insti15 tution for a fiscal year equals the total principal 

16 amount of all loans made under this part to at17 tend such institution for the cohort of bor18 rowers who entered repayment, deferment, or 

19 forbearance on such loans in the third pre20 ceding fiscal year for which the determination is 

21 made. 

22 ‘‘(B) DETERMINATION OF COHORT NON23 REPAYMENT LOAN BALANCE.— 

24 ‘‘(i) IN GENERAL.—The cohort non25 repayment loan balance of an institution 


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1 for a fiscal year equals, from the total 

2 amount of the loans described in subpara3 graph (A), the total loan balance of those 

4 borrowers who have not made at least a 1 

5 dollar reduction in their principal balance 

6 in the 3 consecutive fiscal years since their 

7 loans entered repayment, deferment, or 

8 forbearance. 

9 ‘‘(ii) EXCEPTION.—The cohort non10 repayment loan balance calculation under 

11 clause (i) shall not take into consideration 

12 a borrower who was— 

13 ‘‘(I) in deferment on repayment 

14 of a loan described in subparagraph 

15 (A) in the 3 consecutive fiscal years 

16 described in clause (i) due to study in 

17 an approved graduate fellowship pro18 gram or in an approved rehabilitation 

19 training program for the disabled; 

20 ‘‘(II) in deferment on repayment 

21 of a loan described in subparagraph 

22 (A) in the 3 consecutive fiscal years 

23 described in clause (i) during which 

24 time the borrower was in a period of 


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1 at least half-time enrollment in college 

2 or a career school; 

3 ‘‘(III) in deferment on repayment 

4 of a loan described in subparagraph 

5 (A) in the 3 consecutive fiscal years 

6 described in clause (i) during which 

7 time the borrower was in a period of 

8 service qualifying for loan discharge 

9 or cancellation under part E; 

10 ‘‘(IV) in deferment on repayment 

11 of a loan described in subparagraph 

12 (A) in the 3 consecutive fiscal years 

13 described in clause (i) during which 

14 time the borrower was on active duty 

15 military service during a war, military 

16 operation, or national emergency; 

17 ‘‘(V) in mandatory forbearance 

18 on repayment of a loan described in 

19 subparagraph (A) for the full fiscal 

20 year; or 

21 ‘‘(VI) serving as a volunteer 

22 under the Peace Corps Act (22 U.S.C. 

23 2501 et seq.) or the Domestic Volun24 teer Service Act of 1973 (42 U.S.C. 

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1 tive fiscal years described in clause 

2 (i). 

3 ‘‘(C) DETERMINATION OF PAYMENT.— 

4 ‘‘(i) IN GENERAL.—The risk-sharing 

5 payment of an institution for a fiscal year 

6 equals 5 percent of the amount determined 

7 under clause (ii). 

8 ‘‘(ii) AMOUNT BASED ON COHORT

9 NONREPAYMENT LOAN BALANCE AND UN10 EMPLOYMENT RATE.— 

11 ‘‘(I) IN GENERAL.—The amount 

12 under this clause is determined by 

13 subtracting the amount determined 

14 under subclause (II) from the cohort 

15 nonrepayment loan balance deter16 mined under subparagraph (B). 

17 ‘‘(II) AMOUNT BASED ON UNEM18 PLOYMENT RATE.—The amount under 

19 this subclause is determined by multi20 plying the average national unemploy21 ment rate, as defined by the Bureau 

22 of Labor Statistics, for the 3 previous 

23 fiscal years from the date of the de24 termination by the cohort loan balance 

25 determined under subparagraph (A). 


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1 ‘‘(3) NOTIFICATION.—Beginning with the first 

2 fiscal year for which data are available after the date 

3 of enactment of the Student Protection and Success 

4 Act and each succeeding fiscal year until fiscal year 

5 2022, the Secretary shall notify each institution of 

6 higher education participating in the direct student 

7 loan program under this part of what the risk-shar8 ing payment based on the cohort nonrepayment loan 

9 balance of the institution, as determined under para10 graph (2), would be for such institution if such pro11 vision were in effect.’’. 

12 SEC. 5. REPORT. 

13 Not later than 6 months after the date of enactment 

14 of the Student Protection and Success Act, the Secretary 

15 of Education shall submit to Congress a report— 

16 (1) on best practices for institutions of higher 

17 education to improve repayment rates; and 

18 (2) that makes recommendations on how insti19 tutions of higher education can improve repayment 

20 rates, with a particular emphasis on institutions that 

21 serve a high proportion of low-income students. 

Æ 


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