ISA Student Protection Act of 2022

Summary

ISA Student Protection Act of 2022 This bill sets forth consumer protections and other requirements for educational income share agreements (ISAs). In an educational ISA, a provider credits or advances funding for a recipient's postsecondary education or other training; in turn, the recipient agrees to pay the provider a percentage of the recipient's future earnings over a set period of time. (The Department of Education currently considers educational ISAs as private education loans for the purposes of preferred lender arrangement disclosures.) Under the bill, the recipient is only obligated to pay back the provider if the recipient earns over a certain amount. The recipient's obligation to pay ends at the specified time even if the recipient does not pay back the full amount of the funding. Further, payments are limited to 20% of the recipient's income. Recipients earning under a certain threshold are exempt from payments. If a recipient files for bankruptcy, ISAs are not subject to the same undue hardship standard typical of student loan discharges, therefore making these agreements easier to discharge. The bill also applies current consumer loan protections to these agreements. A provider must make certain disclosures to the recipient before entering into an ISA, including how payments are calculated, the length of the agreement, and how these agreements compare to student loan options. The bill establishes the tax treatment of ISAs, including by exempting from taxable income the amounts received under an ISA.

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Timeline

1. 19 July 2022

   Introduced

   Read twice and referred to the Committee on Finance.

   Source: IntroReferral

2. 19 July 2022

   Introduced

   Introduced in Senate

   Source: IntroReferral

Votes

No vote records are attached yet.

Versions

• Introduced in Senate · 19 July 2022 · Official file

Documents

3 official files

• Introduced in Senate (text)

  Introduced in Senate · EN · 19 July 2022

  ViewDownloadOpen at official source

• Introduced in Senate (PDF)

  Introduced in Senate · EN · 19 July 2022

  ViewDownloadOpen at official source

• Introduced in Senate

  summary · EN · 19 July 2022

  Open at official source

Sponsors

• Todd Young · R · Sponsor
• Mark Warner · D · Sponsor
• Sen. Rubio, Marco [R-FL] · R · Sponsor
• Christopher Coons · D · Sponsor
• · ssfi00 · Standing

Related records

• related to → ISA Student Protection Act of 2023