Bill · S. 801· Senate(119-S-801)
Higher Education Reform and Opportunity Act
- Introduced
- 2/27/2025
- Last activity
- 2/27/2025 — Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
- Sponsored by
- Mike Lee
- Cosponsors
- None
- Introduced
- In Committee
What this bill would do
The Higher Education Reform and Opportunity Act seeks to amend the Higher Education Act of 1965 to change how student loans and accreditation work. It introduces "Federal Direct simplification loans" while phasing out existing loan programs and student loan forgiveness. The bill allows states to create alternative accreditation systems for various educational programs. Additionally, it requires institutions to publish specific data regarding student success, enrollment, and debt. Finally, the act implements a default rate fine for institutions to increase school accountability.
Yes
Does this make what the government does easier for the public to see?+6
The bill mandates that institutions publish specific data regarding student success and debt on their websites.
Does this give people more protection from unfair business practices?+5
The bill requires institutions to publish data on enrollment, completion, and earnings to help consumers make informed decisions.
Does this make it easier to run a small business?+2
The bill allows for alternative accreditation for businesses providing postsecondary courses.
The opposite· 3 of 7
Does this reduce what student borrowers owe or repay?-8
The act explicitly phases out student loan forgiveness and prohibits future cancellations for new loans.
Would households on low incomes be better off under this?-5
The elimination of loan forgiveness and income-contingent repayment structures likely disproportionately impacts low-income students.
Would students be better off under this?-4
While the bill creates simplified loans without origination fees, the loss of loan forgiveness and income-contingent repayment options creates significant financial risk.
Who it would affect, and how
Potential Positive Impacts for People
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New Loan Option: The bill creates "Federal Direct simplification loans" which include specific interest rate structures for undergraduate and graduate students (Section 460A).
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No Loan Fees: Under the new simplification loans, the Secretary is prohibited from charging borrowers an origination fee (Section 460A(d)).
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Repayment Flexibility: Borrowers of the new simplification loans are permitted to accelerate their repayment of the loan without facing any penalties (Section 460A(e)).
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Increased Transparency: Institutions will be required to publish data on websites regarding student enrollment, completion rates, and median earnings, which can help individuals make informed decisions (Section 494B(a)(2)).
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State-Led Accreditation: States can establish alternative accreditation systems, which may include postsecondary apprenticeship programs or programs provided by nonprofits and businesses (Section 498C(a)).
Potential Negative Impacts for People
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Loan Termination: The bill mandates that no new loans under current parts of the Act may be made after September 30, 2028, except for the new simplification loans (Section 101(a)).
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Loss of Forgiveness: The act moves to phase out loan forgiveness, stating that for loans made on or after July 1, 2025, the Secretary may not cancel outstanding balances (Section 102).
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Loan Restrictions: For the new simplification loans, income-contingent repayment will not be available (Section 102(1)(A)(9)).
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Strict Repayment Timelines: The new simplification loans have fixed repayment lengths of 15 years for undergraduates and 25 years for graduate students (Section 460A(b)(6)).
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Potential Financial Penalties for Schools: Institutions may be required to pay an annual default rate fine based on a percentage of their outstanding loans, which could impact the school's operations (Section 401(a)).
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Hover a score for the reason it gave.
- Demographic And Interest Groups
- Good For Low Income Households-5Good For Students-4Good For Young Adults-3Good For Middle Class Households-2
- Education And Technology
- Improves Student Loan Relief-8Improves College Affordability-4
- Economy And Finance
- Improves Consumer Protection+5Improves Small Business Support+2
- Governance And Ideology
- Improves Government Transparency+6
- Social Issues And Justice
- Improves Affordable Housing-1
- 2/27/2025
- Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
- Introduced in Senate
One bill Congress.gov lists as related to this one — companions in the other chamber, earlier versions, and bills this one absorbed or was folded into.