- Associated Press - Wednesday, August 5, 2015

CONCORD, N.H. (AP) - New Hampshire Democratic Sen. Jeanne Shaheen is teaming up with Utah Republican Sen. Orin Hatch to introduce legislation that would hold colleges more accountable for “overwhelming” student debt.

If the bipartisan proposal passes, colleges with repayment rates that are more than 10 percent below the national average over a three-year period would lose their eligibility to participate in the federal student loan system.

The senators say the bill, titled the Student Protection and Success Act, is designed to address a 40 percent dropout rate at four-year institutions and a federal student loan default amount that stands at $110 billion.

Shaheen says the promise of a college education is eroding as more and more students drop out or graduate with a degree that doesn’t lead to a good job.

“Students take on college loans on the assurance that they’re worth the investment in their future,” Shaheen said. “It’s time to hold colleges accountable for this nationwide problem.”

Shaheen noted that New Hampshire has the nation’s highest average student loan debt at $32,795.

The senators say some schools hire default management firms to push students into costly loan deferment or forbearance programs to help maintain the college’s eligibility to participate in the federal student loan program. Currently, schools with student default rates of 30 percent for three years - or 40 percent over one year - are deemed ineligible to accept federal loan funding.

They say the proposed legislation would “weed out poorly performing institutions that are good at getting students to enroll, but exceptionally poor at preparing students for the workforce and, therefore, shouldn’t be subsidized by federal assistance.”

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