Sec. 1107. Institutional Risk-Sharing Commission
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The Secretary of Education shall establish an Institutional Risk-Sharing Commission (referred to in this section as the Commission ) whose members shall be selected by the Secretary and comprised of the following relevant stakeholders: 2 representatives of national or regional student advocacy organizations with a track record of engagement and expertise on issues related to college costs, consumer protection, and institutional accountability and an alternate member. 1 student representative who is attending an institution of higher education on the date of the selection and an alternate member. 1 member of the Bureau of Consumer Financial Protection with demonstrated knowledge of student loan borrowing and an alternate member. 2 administrative officers from different types of institutions of higher education and an alternate member. 1 higher education researcher and an alternate member. 1 State postsecondary education data system director and an alternate member. 1 representative from the National Center for Education Statistics and an alternate member. 1 representative from the Government Accountability Office and an alternate member. 1 representative from the Department of the Treasury and an alternate member.
Each member selected under paragraph
(1)shall participate for the purpose of determining agreement by majority vote on the Commission on the report and its contents described in paragraph (4). Each alternate member shall participate for the purpose of determining the majority vote in the absence of the member. Either the member or an alternate member may speak during the negotiations. In the event that the Commission is unable to form agreement on the contents of the report by majority vote, the contents of the report shall be determined by a plurality vote. Not later than 270 days after the date that all members of the Commission have been selected under subsection (a), the Commission shall complete a study and develop recommendations for implementation of a new risk-sharing system for institutions of higher education that participate in the Federal Direct Loan Program under part D of title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1087a et seq. ) through which institutions would be held financially accountable for poor student outcomes. In conducting the study required under paragraph (1), the Commission shall, at a minimum, consider the following issues: Identifying an annual measure or set of measures for the risk-sharing system that would provide the most accurate assessment of an institution’s level of success or failure at providing their students with basic educational outcomes, such as degree completion, ability to repay loans made, insured, or guaranteed under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.), post-graduation employment, and post-graduation earnings. Such possible measures may include cohort default rates, loan repayment rates, graduation rates, graduate earnings, and other measure that the Commission considers an accurate reflection of student outcomes, regardless of the feasibility of access to the data required to implement collection of such measures. What specific metrics would require the lowest performing institutions to make annual payments into the risk-sharing system, and what metrics would exempt institutions from making an annual risk-sharing payment based on performance measures that exceeded a minimum level (which level would be identified by the Commission). How the payments for each institution should be calculated, including whether the use of a percentage of Federal Direct Loans disbursed the year prior to identification, the percentage of loans in default, or any other calculation should be used. Whether a sliding scale of payments should be required of institutions based on their performance on the identified measures. Any legislative safeguards or mechanisms to ensure that an institution required to participate in the risk-sharing system would not pass any prospective costs directly or indirectly onto students, or limit access to low-income students. How an institution’s level of access to low-income students (such as measured by the percentage of students enrolled at the institution who receive Federal Pell Grants under subpart 1 of part A of title IV of the Higher Education Act of 1965 (20 U.S.C. 1070a et seq.)) and affordability (as measured by average net price) should be considered in the risk-sharing system. Specifying a means for the risk-sharing system payments to go primarily towards students in default, additional aid to low-income students, or any other form of aid to student borrowers most in need, including after degree completion. Whether any extraordinary consideration exists that warrants allowing a waiver process through which a very limited number of institutions would be eligible to apply for a waiver from a risk-sharing payment on a yearly basis, and under what conditions. As part of the study required under paragraph (1), the Commission shall develop a public process for soliciting recommendations for the risk-sharing system and shall consider these recommendations as part of the study. The Commission shall factor in any financial or other interests of any submitting party in weighing and considering such recommendations. Not later than 90 days after completing the study required under paragraph (1), the Commission shall issue, by majority vote, or if unable to achieve a majority vote, then a plurality vote, a report regarding its recommendations for a risk-sharing system. The report shall include the following: A description of the Commission’s findings as to the issues described in paragraph (2). A data analysis using the Commission’s recommended metrics that demonstrates how each institution of higher education that participates in the Federal Direct Loan Program under part D of title IV of the Higher Education Act of 1965 (20 U.S.C. 1087a et seq.) as of the period of the Commission’s study would fare under the proposed risk-sharing system, including projections for the amounts of payments the lowest performing institutions would have to pay. An evaluation of the feasibility and unintended consequences of implementing the recommended risk-sharing system, including any legislative or regulatory action needed to implement such a system. The report described in subparagraph
(A)shall be— provided to the Secretary of Education, the Committee on Health, Education, Labor, and Pensions of the Senate, and the Committee on Education and the Workforce of the House of Representatives; and made publicly available. Subject to paragraph (2), the Commission may secure directly from any Federal department or agency such information as the Commission considers necessary to carry out its duties under this section. The Commission may request the head of any State or local department or agency to furnish such information to the Commission. Any Federal department or agency, State or local department or agency, or institution of higher education in providing information to the Commission under this section shall not share any personally identifiable information and shall act in accordance with section 444 of the General Education Provisions Act ( 20 U.S.C. 1232g , commonly known as the Family Educational Rights and Privacy Act of 1974 ).
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