Responsible Borrowing Act of 2023

To amend the Higher Education Act of 1965 to authorize institutions of higher education to limit the amount of a Federal loan that an enrolled student may borrow. 1. Short title This Act may be cited as the Responsible Borrowing Act of 2023 2. Institutional determined limits Section 455(a) of the Higher Education Act of 1965 ( 20 U.S.C. 1087e(a) (4) Institutional Determined Limits (A) In General Notwithstanding any other provision of this Act, an institution of higher education (at the discretion of a financial aid administrator at the institution) may prorate or limit the amount of a loan any student enrolled in a program of study at that institution may borrow under this part for an academic year or in the aggregate— (i) if the institution can reasonably demonstrate that student debt levels are or would be excessive for such program, based on— (I) the most recently available data from the Bureau of Labor Statistics for the average or median starting salary in the region in which the institution is located for typical occupations pursued by graduates of such program; or (II) the most recently available data from the College Scorecard (or successor website) on the median earnings of students who complete such program; (ii) in a case in which the student is enrolled on a less than full-time basis or the student is enrolled for less than the period of enrollment to which the annual loan limit applies under this part, based on the student’s enrollment status; (iii) based on the credential level (such as a degree, certificate, or other recognized educational credential) that the student would attain upon completion of such program; or (iv) based on the year of the program for which the student is seeking such loan. (B) Increases for Individual Students Upon the request of a student whose loan amount for an academic year has been prorated or limited under subparagraph (A), an eligible institution (at the discretion of the financial aid administrator at the institution) may increase such loan amount to an amount not exceeding the annual loan amount applicable to such student under this part for such academic year at the discretion of the financial aid administrator at the institution. (C) Rule of construction Nothing in this paragraph shall be construed to authorize a proration or limiting of loan amounts by an institution of higher education because of a student’s race, color, religion, sex, marital status, age, disability, or national origin. (D) Exception for certain students This paragraph shall not apply to any student enrolled in a program of study at an eligible institution as of June 30, 2024, or any loans made under this part to such student for such enrollment, during the period required for the completion of such program. .

Summary: Responsible Borrowing Act of 2023 This bill authorizes institutions of higher education (IHEs) to prorate or limit the amount of a Federal Direct Loan that an enrolled student may borrow for an academic year or in the aggregate. The bill specifies the factors that an IHE may use to limit these loans. These factors include the average or median starting salary for typical occupations pursued by graduates of the program (or the median earnings of students who complete such program), the enrollment status of the student (i.e., full- or part-time enrollment), the credential level of the program (e.g., degree or certificate), and the year of the program for which the student is seeking the loan. Upon request of a student whose loan has been prorated or limited, an IHE may increase the amount of the loan within otherwise applicable limits at the discretion of the IHE's financial aid administrator.