PROTECT Students Act of 2025

This legislation aims to protect students and taxpayers by raising standards for colleges that take federal student aid. It measures whether programs lead to pay that can reasonably cover student debt, posts those results online, and requires clear warnings to students when a program fails these tests . It makes loan relief easier when a school closes or misleads students, including automatic closed-school discharges after one year and fixes to credit reports; in widespread cases, groups of borrowers can be helped together . It also stops schools from forcing students into private arbitration and lets students sue schools or contractors that lie or break key rules, with courts able to award damages and fees .

Colleges must spend more of tuition dollars on students. Starting in the 2026–27 school year, schools have to spend at least 30% of tuition and fees on teaching; by 2031–32, the Education Department will set a minimum for combined teaching and student services, and schools at risk of missing it must warn students . Schools can’t hire or contract with owners or executives who have a record of fraud or big losses of federal funds, and the Department can recoup money when loans are forgiven because of school misconduct—with owners required to sign agreements that make them responsible for these costs . Oversight is strengthened through a new enforcement unit that can investigate, use “secret shoppers,” and subpoena records, and by more public reporting on audits, financial guarantees, school ownership changes, and borrower-defense activity .

• Who is affected
  • Students who use federal loans and grants; colleges that receive federal student aid; and third-party contractors and loan servicers that work with those colleges .
• What changes
  • Programs with poor debt-to-earnings or earnings results must warn students and have their results posted online .
  • Faster, broader loan relief when schools close or mislead students; fixes to credit reports; and group discharges when problems are widespread .
  • No forced arbitration; students can take schools or contractors to court and seek damages and attorney’s fees .
  • Minimum shares of tuition spent on teaching (and later teaching plus student services), with student warnings if schools are at risk of falling short .
  • Stronger oversight and accountability, including recouping costs from schools and publishing key financial and oversight information .
• When
  • Teaching-spend minimum: starts in the 2026–27 school year; combined teaching/student-services floor set in 2031–32 and applies each year after.
  • Closed-school discharge: automatic after one year if the student could not complete the program following the closure.