Hawley Introduces New Legislation to Hold Universities Accountable for Rising Tuition Costs and Student Debt

Wednesday, September 21, 2022

Today U.S. Senator Josh Hawley (R-Mo.) introduced the Make the Universities Pay Act — new legislation to reform the nation’s higher education financing system and put universities on the hook for the creditworthiness of future student loans and the debt of students who default.

College tuition increases consistently outpace the rise of inflation, the nation’s student loan debt balance has skyrocketed to almost $2 trillion, and lackluster student performance calls into serious question whether ballooning costs and indebtedness are worth the investment: only about half of college enrollees complete a degree within six years.

“For decades, universities have amassed billion-dollar endowments while teaching nonsense like men can get pregnant. All while charging extortionary tuition,” said Senator Hawley. “Now Joe Biden wants to give away another $1 trillion to prop up the system. That’s wrong. Instead, it’s time to put universities on the hook and give students the information they need to make informed decisions.”

On August 24, 2022, President Biden announced a series of executive actions on student loan debt. These actions usurp authorities given to Congress in the Constitution, constitute an estimated $1 trillion wealth transfer from those who have attended college to the majority of Americans who have not, and lack much-needed reforms to the nation’s broken higher education financing system.

Senator Hawley’s Make the Universities Pay Act will: 

  • Going forward, require institutions of higher education participating in the Federal Direct Student Loan Program to pay 50 percent of any student loan balance that is in default.

    • Institutions of higher education are prohibited from increasing the cost of attendance in order to offset this liability unless there is an equivalent percentage decrease in administrative expenses at the institution.
  • Allow student loan debt to be discharged in bankruptcy.

    • Undergraduate student loan debt can be discharged five years after the first payment is due, while graduate student loan can be discharged fifteen years after the first payment is due.
  • Require each institution of higher education participating in federal financial aid programs to publish post-graduate outcomes, including mean and median earnings of graduates and student loan default rates, disaggregated by each degree or program of study.

In 2019, Senator Hawley introduced two pieces of legislation to break up the higher education monopoly, provide more options for career training, and to hold universities accountable for student outcomes. 

Click here to view bill text for the Make the Universities Pay Act.