Bill Overview
Title: Make the Universities Pay Act
Description: This bill requires institutions of higher education (IHEs) to take certain actions related to federal student loans and addresses other related issues. For example, the bill (1) makes each IHE participating in the Federal Direct Loan Program liable for 50% of any student loan balance that is in default and was used toward the cost of attendance at the IHE, and (2) expands the instances in which student loans may be discharged in bankruptcy.
Sponsors: Sen. Hawley, Josh [R-MO]
Target Audience
Population: Individuals connected to higher education institutions
Estimated Size: 50000000
- The bill targets Institutions of Higher Education (IHEs) involved with the Federal Direct Loan Program.
- IHEs will be financially liable for a portion of federal student loans that are in default, affecting their financial operations.
- Students who have federal loans may have their loans discharged more easily in bankruptcy, impacting borrowers' financial responsibilities.
- The overall student loan landscape in the U.S. might see changes, impacting current and prospective students.
Reasoning
- The target population includes students with federal loans, universities, staff, and prospective students who consider tuition costs.
- The policy imposes financial accountability on institutions, which may lead to changes in tuition fees, potentially affecting access to higher education.
- Students who default on loans may benefit from easier discharge in bankruptcy, potentially improving their financial wellbeing.
- Considering the policy's financial limitation, only those students at risk of default and attending institutions heavily involved in the Federal Direct Loan Program might see significant impacts.
Simulated Interviews
Undergraduate Student (Boston, MA)
Age: 20 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 20.0 years
Commonness: 15/20
Statement of Opinion:
- I think it's a good idea to hold universities accountable for student debt issues.
- I hope this policy might lead to lower tuition costs eventually.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 6 |
| Year 10 | 8 | 6 |
| Year 20 | 9 | 6 |
University Administrator (Philadelphia, PA)
Age: 54 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 3/20
Statement of Opinion:
- This policy will require us to carefully manage our risk with loan defaults.
- It may strain our budget if defaults increase.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 8 | 7 |
Student Loan Officer (Los Angeles, CA)
Age: 43 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 10/20
Statement of Opinion:
- The policy might complicate our processing system for loans.
- Could decrease default rates as universities tighten loan requirements.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
High School Counselor (Chicago, IL)
Age: 32 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- This could make higher education more accessible if it brings down costs.
- The policy might change the advice I give to students regarding loans.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Retired (New York, NY)
Age: 65 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 20.0 years
Commonness: 12/20
Statement of Opinion:
- Hoping this policy will make college more affordable for my grandchildren.
- Universities should share the risk with students.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 8 | 6 |
| Year 20 | 8 | 6 |
Graduate Student (Houston, TX)
Age: 28 | Gender: male
Wellbeing Before Policy: 4
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- Happy to hear about easier loan discharge possibilities.
- Concerned about how this might affect my ability to get future loans.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 4 |
| Year 3 | 7 | 5 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 6 |
| Year 20 | 8 | 7 |
Financial Aid Advisor (Miami, FL)
Age: 39 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 4/20
Statement of Opinion:
- We need to prepare for the financial implications.
- Hopefully, this means fewer students in financial trouble after graduation.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 6 |
| Year 20 | 7 | 6 |
Recent College Graduate (Seattle, WA)
Age: 22 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 20/20
Statement of Opinion:
- I'm glad more options might be available for handling my debt.
- Anxious about how universities might pass costs onto us
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 7 |
| Year 20 | 8 | 7 |
College Professor (Rural Kansas)
Age: 44 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 7/20
Statement of Opinion:
- Concerned about potential funding cuts due to budget realignments.
- Good that institutions need to be more responsible but worried about the execution.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Marketing Specialist (Denver, CO)
Age: 29 | Gender: female
Wellbeing Before Policy: 4
Duration of Impact: 20.0 years
Commonness: 5/20
Statement of Opinion:
- I'm open to seeing how this policy could help people like me with major debt.
- Curious if this will stop unfair practices by for-profit institutions.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 4 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 7 | 6 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Cost Estimates
Year 1: $500000000 (Low: $300000000, High: $700000000)
Year 2: $520000000 (Low: $320000000, High: $730000000)
Year 3: $540000000 (Low: $340000000, High: $760000000)
Year 5: $590000000 (Low: $370000000, High: $830000000)
Year 10: $700000000 (Low: $450000000, High: $980000000)
Year 100: $1000000000 (Low: $600000000, High: $1400000000)
Key Considerations
- The policy's long-term financial effects are contingent on changes to IHEs' tuition strategies and student enrollment patterns.
- Impact on students who become eligible to discharge loans in bankruptcy is uncertain and might require federal litigation costs.
- Administrative complexities for IHEs could lead to secondary costs that might indirectly influence federal funding mechanisms.