,,ii  #aaf? ,,congress  #a/ ,session    
,s4 #ifh  ,,9 ,,! ,,s5ate ,,( ,,!       
,,unit$ ,,/ates  ,april #a1 #bjai,mr4   
,re$ 7= himself1 ,mr4 ,durb91 ,ms4      
,w>r51 & ,mr4 ,murphy7 introduc$ !      
foll[+ bill2 :i* 0 read twice & ref]r$  
to ! ,committee on ,heal?1 ,education1  
,labor1 & ,p5sions  ,a ,,bill  ,to      
provide = in/itutional risk-%>+ 9 !     
,f$]al /ud5t loan programs4  #a4 ,%ort  
title ,?is ,act may be cit$ z ! ,protect
 ,/ud5t ,borr[]s ,act ( #bjai4  #b4     
,purpose ,! purpose ( ?is ,act is to    
protect /ud5t borr[]s by requir+        
in/itutions ( high] education to assume 
"s ( ! risk ( default = /ud5t loans "u  
"p ,d ( title ,,iv ( ! ,high] ,education
 ,act ( #aife 7#bj ,u4,s4,c4 #ajhg;a et 
seq474  #c4 ,in/itutional rebates to !  
,dep>tm5t ( ,education = default$ loans 
,section #ded ( ! ,high] ,education ,act
 ( #aifd 7#bj ,u4,s4,c4 #ajhg;d7 is     
am5d$-- 7#a7 9 subsection 7a7--  7,a7 9 
p>agraph 7#e71 by /rik+ & aft] !        
semicolon2  7,b7 9 p>agraph 7#f71 by    

/rik+ ! p]iod at ! end & ins]t+ 2 &2 &  
7,c7 by add+ at ! end ! foll[+3  7#g7   
provide t ! in/itution accepts !        
in/itutional risk-%>+ requirem5ts "u    
subsection 7d71 if applicable4  2 &     
7#b7 by add+ at ! end ! foll[+3  7d7    
,in/itutional risk-,%>+ = /ud5t loan    
defaults  7#a7 ,9 g5]al ,subject to     
p>agraph 7#c71 ea* in/itution ( high]   
education p>ticipat+ 9 ! direct /ud5t   
loan program "u ?is "p = a fiscal ye> t 
has a rate ( p>ticipation 9 su* program 
= all /ud5ts enroll$ at t in/itution =  
su* fiscal ye> t is #cc p]c5t or high]  
%all remit1 at su* times z ! ,secret>y  
may specify1 a risk-%>+ paym5t bas$ on a
 p]c5tage ( ! volume ( /ud5t loans "u   
?is "p t are 9 default1 z det]m9$ "u    
p>agraph 7#b74  7#b7 ,det]m9ation (     
risk-%>+ paym5ts ,subject to p>agraph   
7#c71 ) respect to ea* fiscal ye>1 an   
in/itution ( high] education describ$ 9 
p>agraph 7#a7 t has a cohort default    
rate 7z def9$ 9 section #dce7m77--  7,a7
 t is #cj p]c5t or high] = ! mo/ rec5t  

fiscal ye> = :i* data are available1    
%all pay to ! ,secret>y = ! fiscal ye>  
an am\nt t is equal to #bj p]c5t ( !    
total am\nt 7includ+ int]e/ & collection
 fees7 ( loans made "u ?is "p to /ud5ts 
( su* cohort t are 9 default2  7,b7 t is
 l[] ?an #cj p]c5t b n l[] ?an #be p]c5t
 = ! mo/ rec5t fiscal ye> = :i* data are
 available1 %all pay to ! ,secret>y = ! 
fiscal ye> an am\nt t is equal to #ae   
p]c5t ( ! total am\nt 7includ+ int]e/ & 
collection fees7 ( loans made "u ?is "p 
to /ud5ts ( su* cohort t are 9 default2 
7,c7 t is l[] ?an #be p]c5t b n l[] ?an 
#bj p]c5t = ! mo/ rec5t fiscal ye> = :i*
 data are available1 %all pay to !      
,secret>y = ! fiscal ye> an am\nt t is  
equal to #aj p]c5t ( ! total am\nt      
7includ+ int]e/ & collection fees7 (    
loans made "u ?is "p to /ud5ts ( su*    
cohort t are 9 default2 or  7,d7 t is   
l[] ?an #bj p]c5t b n l[] ?an #ae p]c5t 
= ! mo/ rec5t fiscal ye> = :i* data are 
available1 %all pay to ! ,secret>y = !  
fiscal ye> an am\nt t is equal to #e    

p]c5t ( ! total am\nt 7includ+ int]e/ & 
collection fees7 ( loans made "u ?is "p 
to /ud5ts ( su* cohort t are 9 default4 
7#c7 ,waiv] & r$uc$ risk-%>+ paym5ts    
7,a7 ,waiv] ,! ,secret>y %all waive !   
risk-%>+ paym5ts describ$ 9 p>agraph    
7#a7 = an in/itution describ$ 9 p>agraph
 7#b77;,d7 t meets ! requirem5ts (      
subp>agraph 7,d74  7,b7 ,r$uc$ risk-%>+ 
paym5ts ,if an in/itution has 9 place a 
/ud5t loan managem5t plan describ$ 9    
subp>agraph 7,d7 t is approv$ by !      
,secret>y1 ! ,secret>y %all r$uce !     
total annual am\nt ( risk-%>+ paym5ts z 
foll[s3  7i7 ,) respect to an in/itution
 ) a cohort default rate describ$ 9     
p>agraph 7#b77;,a71 ! risk-%>+ paym5t   
%all be 9 an am\nt t is equal to #ae    
p]c5t ( ! total am\nt 7includ+ int]e/ & 
collection fees7 ( loans made "u ?is "p 
to /ud5ts ( su* cohort t are 9 default4 
7ii7 ,) respect to an in/itution ) a    
cohort default rate describ$ 9 p>agraph 
7#b77;,b71 ! risk-%>+ paym5t %all be 9  
an am\nt t is equal to #aj p]c5t ( !    

total am\nt 7includ+ int]e/ & collection
 fees7 ( loans made "u ?is "p to /ud5ts 
( su* cohort t are 9 default4  7iii7 ,) 
respect to an in/itution ) a cohort     
default rate describ$ 9 p>agraph        
7#b77;,c71 ! risk-%>+ paym5t %all be 9  
an am\nt t is equal to #e p]c5t ( !     
total am\nt 7includ+ int]e/ & collection
 fees7 ( loans made "u ?is "p to /ud5ts 
( su* cohort t are 9 default4  7,c7     
,cont9uation ( waiv] or r$uc$ paym5ts   
,an in/itution t receives a waiv] "u    
subp>agraph 7,a7 or a r$uc$ risk-%>+    
paym5t "u subp>agraph 7,b7 may receive a
 waiv] or r$uc$ paym5t = a subsequ5t    
fiscal ye> only if ! ,secret>y det]m9es 
t ! in/itution is mak+ satisfactory     
progress 9 c>ry+ out ! /ud5t loan       
managem5t plan describ$ 9 subp>agraph   
7,d71 includ+ evid5ce ( ! effectiv5ess (
 ! individualiz$ f9ancial aid c\nsel+ = 
/ud5ts4  7,d7 ,/ud5t loan managem5t plan
 ,an in/itution t seeks a waiv] or      
r$uction ( its risk-%>+ paym5t1 %all    
develop & c>ry out a /ud5t loan         

managem5t plan t %all include an        
analysis ( ! risk factors correlat$ )   
high] /ud5t loan defaults t are pres5t  
at ! in/itution & actions t ! in/itution
 w take to address su* factors4 ,su*    
plan %all include individualiz$ f9ancial
 aid c\nsel+ = /ud5ts & /rategies to    
m9imize /ud5t loan default & del9qu5cy4 
7,e7 ,waiv] or r$uction = c]ta9         
in/itutions ,9 addition to ! o!r        
risk-%>+ paym5t waiv]s & r$uctions      
describ$ 9 ?is p>agraph1 ! ,secret>y may
 waive or r$uce risk-%>+ paym5ts if--   
7i7 an in/itution is eligible "u-- 7,i7 
"p ,a or "p ,b ( title ,,iii2 or  7,,ii7
 title ,v2 &  7ii7 ! ,secret>y det]m9es 
t--  7,i7 ! in/itution is mak+          
satisfactory progress 9 c>ry+ out !     
in/itution's /ud5t loan managem5t plan  
describ$ "u subp>agraph 7,d72 &  7,,ii7 
grant+ a waiv] or r$uction ( risk-%>+   
paym5ts w\ld be 9 ! be/ int]e/ ( /ud5ts 
at ! in/itution4  7#d7 ,prohibition ,an 
in/itution ( high] education %all n d5y 
admission or f9ancial aid to a /ud5t    

bas$ on a p]ception t su* /ud5t may be  
at risk = default+ on a loan made "u ?is
 "p4  7#e7 ,fund = ! deposit ( risk-%>+ 
paym5ts  7,a7 ,9 g5]al ,!re is e/abli%$ 
9 ! ,treasury ( ! ,unit$ ,/ates a       
sep>ate acc\nt = ! deposit ( risk-%>+   
paym5ts collect$ "u ?is subsection = !  
purpose ( r$uc+ /ud5t loan debt1        
del9qu5cy1 & default4 ,! ,secret>y %all 
deposit any paym5ts collect$ pursuant to
 ?is subsection into su* fund4  7,b7    
,use ( funds ,( ! am\nts 9 ! fund       
describ$ 9 subp>agraph 7,a71 = ea*      
fiscal ye>--  7i7 n m ?an #ej p]c5t (   
su* am\nts %all be made available to !  
,secret>y to ent] into contracts or     
coop]ative agreem5ts = del9qu5cy &      
default prev5tion or rehabilitation "u  
section #def7;c72 &  7ii7 ! ,secret>y   
%all res]ve ! rema9d] ( su* am\nts = a  
,f$]al ,pell ,grant fund t %all be us$  
to increase ! maximum ,f$]al ,pell      
,grant aw>d available to /ud5ts :o att5d
 an in/itution--  7,i7 t p>ticipates 9 !
 direct /ud5t loan program "u ?is "p2   

7,,ii7 9 :i* n less ?an #cc p]c5t ( !   
/ud5ts enroll$ at ! in/itution h receiv$
 a ,f$]al ,pell ,grant2 &  7,,iii7 t has
 a rate ( p>ticipation 9 ! direct /ud5t 
loan program "u ?is "p = all /ud5ts     
enroll$ at t in/itution = su* fiscal ye>
 t is--  7aa7 #cc p]c5t or high] & su*  
in/itution is n subject to ! risk-%>+   
paym5ts "u ?is subsection2 or  7bb7 less
 ?an #cc p]c5t & su* in/itution has a   
cohort default rate ( less ?an #ae p]c5t
 = ! mo/ rec5t fiscal ye> = :i* data are
 available4  7#f7 ,applicability ,!     
,secret>y %all c>ry out ?is subsection  
beg9n+ ) ! cohort default rate = ! #bjai
 cohort4 ,! #bjai cohort %all include   
curr5t & =m] /ud5ts :o ent] repaym5t 9  
fiscal ye> #bjai4  7#g7 ,report to      
congress ,! ,secret>y %all report on an 
annual basis to ! ,committee on ,heal?1 
,education1 ,labor1 & ,p5sions ( !      
,s5ate & ! ,committee on ,education &   
,labor ( ! ,h\se ( ,repres5tatives !    
foll[+ in=mation3  7,a7 ,a li/ (        
in/itutions t h be5 subject to risk-%>+ 

paym5ts 9 ! previ\s ye>4  7,b7 ,!       
requir$ risk-%>+ paym5t f su*           
in/itutions4  7,c7 ,! am\nt ( risk-%>+  
paym5ts collect$ f su* in/itutions4     
7,d7 ,a li/ ( ! in/itutions t h receiv$ 
waiv]s f ! risk-%>+ paym5t & ! reason = 
su* waiv]4  7,e7 ,a li/ ( ! in/itutions 
t h receiv$ r$uctions 9 ! requir$       
risk-%>+ paym5t4  7,f7 ,! use ( funds   
deposit$ f risk-%>+ paym5ts1 includ+--  
7i7 ! am\nt res]v$ = contracts or       
coop]ative agreem5ts = del9qu5cy &      
default prev5tion or rehabilitation2    
7ii7 a li/ ( contracts or coop]ative    
agreem5ts ent]$ into = del9qu5cy &      
default prev5tion or rehabilitation2    
7iii7 in=mation on ! p]=mance ( su*     
contracts or coop]ative agreem5ts2  7iv7
 ! am\nt res]v$ = ! ,f$]al ,pell ,grant 
program2 &  7v7 a li/ ( in/itutions =   
:i* /ud5ts 9 att5dance at ! in/itution  
are eligible = ! increas$ maximum ,f$]al
 ,pell ,grant "u p>agraph 7#e77;,b77ii7 
& ! am\nt ( su* increase4  4  #d4       
,contracts & coop]ative agreem5ts       

,section #def ( ! ,high] ,education ,act
 ( #aife 7#bj ,u4,s4,c4 #ajhg;f7 is     
am5d$ by add+ at ! end ! foll[+3  7c7   
,contracts & coop]ative agreem5ts =     
del9qu5cy & default prev5tion & =       
default rehabilitation ,! ,secret>y may 
ent] into contracts or coop]ative       
agreem5ts =-- 7#a7 /atewide or          
in/itutionally bas$ programs = !        
prev5tion ( ,f$]al /ud5t loan del9qu5cy 
& default at in/itutions ( high]        
education t--  7,a7 h a high cohort     
default rate z def9$ "u section #dce7m72
 or  7,b7 s]ve l>ge numb]s or p]c5tages 
( /ud5t loan borr[]s :o h a risk factor 
associat$ ) high] default rates on      
,f$]al /ud5t loans "u ?is title1 su* z  
com+ f a l[-income family1 be+ a fir/   
g5]ation po/second>y education /ud5t1 n 
hav+ a second>y s*ool diploma1 or hav+  
previ\sly default$ on1 & rehabilitat$1 a
 loan made "u ?is title2 &  7#b7        
increas+ ! numb] ( borr[]s :o           
successfully rehabilitate default$      
loans4  4  #e4 ,f9ancial responsibility 

,section #dih7;c77#a7 ( ! ,high]        
,education ,act ( #aife 7#bj ,u4,s4,c4  
#ajii;c7c77#a77 is am5d$ by /rik+       
subp>agraph 7,c7 & ins]t+ ! foll[+3     
7,c7 to meet all ( its f9ancial         
obligations1 includ+ in/itutional       
risk-%>+ paym5ts1 refunds ( in/itutional
 *>ges1 & repaym5ts to ! ,secret>y =    
liabilities & debts incurr$ 9 programs  
adm9i/]$ by ! ,secret>y4  4  #f4 ,g5]al 
acc\ntability (fice /udies ,n lat] ?an  
#ab mon?s aft] ! date ( enactm5t ( !    
,protect ,/ud5t ,borr[]s ,act ( #bjai1 !
 ,comptroll] ,g5]al ( ! ,unit$ ,/ates   
%all report to ! ,committee on ,heal?1  
,education1 ,labor1 & ,p5sions ( !      
,s5ate & ! ,committee on ,education &   
,labor ( ! ,h\se ( ,repres5tatives !    
results ( a /udy t addresses ! foll[+3  
7#a7 ,h[ a repaym5t rate metric c\ld be 
us$ 9 place ( or 9 conjunction ) !      
cohort default rate = in/itutional      
eligibility & risk-%>+4  7#b7 ,!        
implications ( us+ a cohort repaym5t    
rate v]sus o!r types ( repaym5t rate4   

7#c7 ,! consid]ations t %\ld be tak5    
into acc\nt be=e transition+ f ! curr5t 
cohort default rate metric to a repaym5t
 rate metric4  7#d7 ,! impact on        
risk-%>+ paym5ts & in/itutional         
eligibility if ! cohort default rate 7  
bas$ on #e ye>s in/ead ( #c ye>s4