S. 136 · 118th Congress
ISA Student Protection Act of 2023
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Never voted on. It didn't reach a floor vote before the 118th Congress ended, so it expired. A bill has to be introduced again to be considered in a new Congress.
R
YoungSponsor3 cosponsors · 2 D, 1 R
3 signed on when it was introduced; the rest joined later. Cosponsors who withdrew aren't shown.
This bill sets forth consumer protections and other requirements for educational income share agreements (ISAs).
What it does: CRS summary · Introduced in Senate · Jan 30, 2023
ISA Student Protection Act of 2023
This bill sets forth consumer protections and other requirements for educational income share agreements (ISAs). In an educational ISA, a provider credits or advances funding for a recipient's postsecondary education or other training; in turn, the recipient agrees to pay the provider a percentage of the recipient's future earnings over a set period of time. (The Department of Education currently considers educational ISAs as private education loans for the purposes of preferred lender arrangement disclosures.)
Under the bill, the recipient is only obligated to pay back the provider if the recipient earns over a certain amount. The recipient's obligation to pay ends at the specified time even if the recipient does not pay back the full amount of the funding. Further, payments are limited to 20% of the recipient's income. Recipients earning under a certain threshold are exempt from payments.
If a recipient files for bankruptcy, ISAs are not subject to the same undue hardship standard typical of student loan discharges, therefore making these agreements easier to discharge. The bill also applies current consumer loan protections to these agreements. A provider must make certain disclosures to the recipient before entering into an ISA, including how payments are calculated, the length of the agreement, and how these agreements compare to student loan options.
The bill establishes the tax treatment of ISAs, including by exempting from taxable income the amounts received under an ISA.
Written by the nonpartisan Congressional Research Service. All summary versions on Congress.gov
About this bill and sources
Official title: ISA Student Protection Act of 2023
Latest action (Jan 30, 2023): Read twice and referred to the Committee on Finance.
Policy area: Finance and Financial Sector · Origin: Senate · Introduced: Jan 30, 2023
Official page on Congress.gov · Bill text (GovInfo) · Status record (XML)
No recorded floor vote found.