HR 8759 — Student Loan Reform Act

Summary

This bill would create an optional program allowing colleges and universities to cosign federal student loans for their students. Colleges that participate would cosign all eligible loans made to their students and would be required to repay any loan that goes into default after 90 days if the loan has not been rehabilitated, using a 10-year standard repayment plan. In exchange, loans cosigned by participating institutions would receive a reduced interest rate compared to standard federal student loans. Students whose loans are cosigned by their institution would still be considered in default for credit reporting purposes if they fail to pay, but the institution would cover the payments. Colleges participating in this program would face a higher default rate threshold for maintaining federal financial aid eligibility compared to non-participating institutions.

AI-generated plain-language summary of the bill text — neutral, and may be imperfect. See the full text below for the exact wording.

Sponsor (1)

Rep. Perry, Scott [R-PA-10] (R-PA)

Money behind the sponsor

Top reported contributors to Scott Perry’s campaign committee (2024 cycle) — who funds the bill’s sponsor, not a claim about this bill. Data from FEC.

BRODIE GENERATIONAL CAPITAL PARTNERS $13,200
SAULSBURY INDUSTRIES $13,200
COMMONWEALTH OF PA $8,350
NULL $7,326
FOUR SEASONS PRODUCE $7,300

Organizations whose employees gave the most — itemized individual contributions grouped by the donor’s reported employer (FEC Schedule A). Full finance for Scott Perry → · Outside spending →

Actions (2)

May 12, 2026 Referred to the House Committee on Education and Workforce. · house
May 12, 2026 Introduced in House

Similar bills (6)

Bills with similar text or summary — includes reintroductions across Congresses. Ranked by semantic similarity of the bill text (computed locally); a neutral discovery aid, not a claim the bills are duplicates.

Full text

IN THE HOUSE OF REPRESENTATIVES

May 12, 2026

Mr. Perry introduced the following bill; which was referred to the Committee on Education and Workforce

A BILL

To amend the Higher Education Act of 1965 to direct the Secretary of Education to carry out a program under which an institution of higher education may elect to cosign Federal student loans made to students attending the institution, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the “Student Loan Reform Act”.

SEC. 2. INSTITUTIONAL COSIGNER PROGRAM.

Part D of title IV of the Higher Education Act of 1965 (20 U.S.C. 1087a et seq.) is amended by inserting after section 454 the following:

“SEC. 454A. INSTITUTIONAL COSIGNER PROGRAM.

“(a) Program Required.—Beginning on July 1, 2026, the Secretary shall carry out a program under which an institution of higher education may elect to cosign all eligible direct loans made to students enrolled at the institution for an academic year.

“(b) Agreement With Secretary.—To be eligible to participate in the program under this section for an academic year, an institution of higher education shall enter into an agreement with the Secretary under which the institution agrees to the following:

“(1) The institution will cosign all new eligible direct loans made to students enrolled at the institution for such academic year.

“(2) With respect to each such loan, the institution will abide by the terms and conditions of cosigner liability described in subsection (d).

“(c) Master Promissory Note.—As part of the program under this section, the Secretary shall—

“(1) revise the master promissory note applicable to each eligible direct loan to include—

“(A) the terms and conditions of cosigner and borrower liability described in subsection (d);

“(B) the interest rate for the loan, as determined under subsection (e); and

“(C) a field in which an authorized representative of an institution participating in the program may cosign the note on behalf of the institution; and

“(2) ensure that each institution participating in the program signs the note applicable to each new eligible direct loan made to a student at the institution for the academic year concerned.

“(d) Cosigner and Borrower Liability.—

“(1) In general.—Notwithstanding any other provision of law, an institution of higher education that is a cosigner of an eligible direct loan of a borrower shall assume the obligation to repay, in accordance with paragraph (2), the outstanding balance of principal and interest due on the loan if—

“(A) the borrower defaulted on the loan;

“(B) a period of 90 days has elapsed since the date on which the loan entered default; and

“(C) the loan has not been rehabilitated.

“(2) Amount and schedule of repayment.—An institution that is obligated to repay an eligible direct loan under paragraph (1) shall make payments on the loan pursuant to a standard repayment plan under section 455(d)(1)(A) with a repayment period of 10 years.

“(3) Termination of obligation.—The obligation of an institution to repay an eligible direct loan under paragraph

(1) shall terminate on the earlier of—

“(A) the date on which the loan is rehabilitated; or

“(B) the date on which the total outstanding balance of principal and interest due on the loan has been repaid.

“(4) Effect on default status of borrower.—A borrower who has defaulted on an eligible direct loan on which an institution is making payments under paragraph (1) shall be considered in default on such loan for purposes of adverse credit reporting and delinquent debt collection procedures under Federal law.

“(5) Recovery from borrower.—Any amounts recovered from the borrower of an eligible direct loan during a period in which an institution is making payments on the loan under paragraph (1) shall be subtracted from the total outstanding balance of principal and interest due on the loan.

“(6) Rule of construction.—Nothing in this subsection shall be construed to limit the remedies available under this part against the borrower of an eligible Federal student loan.

“(e) Reduced Interest Rate.—Notwithstanding any other provision of law, the interest rate applicable to an eligible direct loan cosigned by an institution participating in the program under this section shall be a rate determined by the Secretary that is—

“(1) lower than the standard rate applicable to the loan under section 455(b); and

“(2) reduced below such standard rate by a percentage that is proportionate to the reduced risk posed by the loan, as determined by the Secretary.

“(f) List of Participating Institutions.—On an annual basis, the Secretary shall publish, on a publicly accessible website of the Department of Education, a list that identifies each institution participating in the program under this section for an academic year.

“(g) Eligible Direct Loan Defined.—In this section, the term ‘eligible direct loan’ means a loan made under this part on or after July 1, 2026.”.

SEC. 3. MODIFICATION OF COHORT DEFAULT RATE THRESHOLD.

(a) In General.—Section 435(a) of the Higher Education Act of 1965 (20 U.S.C. 1085(a)) is amended—

(1) in paragraph (2)—

(A) by striking subparagraphs (B) and (C) and inserting the following:

“(B) For purposes of determinations under subparagraph (A), the threshold percentage is—

“(i) 40 percent, in the case of an institution that is participating in the institutional cosigner program under section 454A in the year in which the cohort default rate is determined; or

“(ii) 30 percent, in the case of an institution that is not participating in such program in the year in which the cohort default rate is determined.”; and

(B) by redesignating subparagraph (D) as subparagraph (C);

(2) in paragraph (3), by striking “paragraph (2)(B)(iv)” and inserting “paragraph (2)(B)”; and

(3) in paragraph (7), by striking “paragraph (2)(B)(iv)” each place it appears and inserting “paragraph (2)(B)”.

(b) Effective Date.—The amendments made by subsection (a) shall take effect on July 1, 2026. <all>

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