The PROSPER Act proposes a substantial change to the way colleges are held accountable for the outcomes of their student borrowers. Because of the act’s other changes to the student loan repayment system, the effect of this new accountability regime is uncertain.

Under current law, colleges are held accountable for their three-year cohort default rate. Institutions with high rates of default three years after borrowers enter repayment (rates greater than 30 percent for three continuous years or greater than 40 percent in one year) are ineligible for providing federal student loans.

Based on data from the most recent cohort, who entered repayment in 2014, 10 schools were subject to loss of eligibility.

This metric has been criticized as insufficient for accountability, because students can reduce or delay payments under forbearance, deferral, or income-driven repayment provisions.

Read the full article on PROSPER Act student loan accountability by Kristin Blagg at Urban Institute