Sec. 4. Institutional responsibility for loan repayment
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Section 454 of the Higher Education Act of 1965 ( 20 U.S.C. 1087d(a) ), as amended by section 3, is further amended— in subsection (a), by inserting after paragraph
(6)the following:— provide that the institution accepts the institutional responsibility guarantee requirements under subsection (e); and ; by adding at the end the following: Beginning with respect to loans under this part that are disbursed during the first award year that begins after the date of enactment of the Student Loan Reform Act of 2022 , and each succeeding fiscal year, each institution of higher education participating in the Direct student loan program under this part shall provide a written agreement to the Secretary asserting that the institution will remit to the Secretary, at such times as the Secretary may specify, an institutional responsibility payment, as determined under paragraph (2). The institutional responsibility payment shall be, for each borrower who was enrolled in the institution, an amount equal to the lesser of— a percentage of the total outstanding balance of that borrower that was received for attendance at the institution by that borrower that is equal to 1 percent for each $1000 of the total amount under this part received for attendance at the institution by that borrower; or 50 percent of the total outstanding balance of that borrower that was received under this part for attendance at the institution by that borrower. The Secretary shall apply all of an institutional responsibility payment received under this subsection for a borrower to the outstanding Direct student loan obligation of such student, and shall notify the student of the reduction in the balance of the student's Direct student loan obligations. In this subsection, the term total outstanding balance means the total amount of loans under this part— that have gone into default status and remain unpaid after a period of 10 years or more; and that remain unpaid after the period described in subparagraph
(A)and after the Secretary has exhausted attempts to recover repayment from the borrower, including through wage garnishment under section 488A, an administrative offset under section 3716 of title 31, United States Code, a Federal salary offset, or any other legal means through which the Secretary may recover repayment of Federal student loans. .
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Sec. 4
Institutional responsibility for loan repayment
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