Accountability in Student Loan Data Act of 2024
Should HB 7880 pass, it would significantly change how institutions manage student loans by introducing stricter standards for cohort default rates. Institutions facing high default rates would be designated as in 'progress period status,' placing them at risk of loss of eligibility for federal funding if they fail to implement effective reforms within a specified time frame. Additionally, institutions will be required to disclose their adjusted cohort default rates clearly, enhancing transparency for potential students and stakeholders.
House Bill 7880, titled the 'Accountability in Student Loan Data Act of 2024', seeks to amend the Higher Education Act of 1965 with a focus on the adjusted cohort default rates of institutions of higher education. The bill mandates that these institutions maintain specified adjusted cohort default rates as a condition for participating in federal financial aid programs under Title IV. The legislation aims to compel educational institutions to improve their management of student loans and reduce default rates, thereby enhancing accountability in higher education financing.
While supporters of the bill argue that it will safeguard student interests and promote better loan management by educational institutions, critics may express concerns about the feasibility of implementing these requirements. There are fears that such stringent measures could disproportionately affect smaller, low-income, or under-resourced institutions, potentially leading to reduced access to higher education for low-income students. The bill's approach to defining and measuring 'progress period status' may also raise debates about what constitutes adequate performance in managing student debt.