Essays on Protecting Students Who Borrow Loans Essay

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The paper "Protecting Students Who Borrow Loans " is a marvelous example of a law essay. The Protect Borrowers Act of bill number S. 1873, was introduced in the Senate by Sen. Reed, Jack on 19th December 2013. The bill was sponsored by Senators Dick Durbin, Jack Reed, and Elizabeth Warren. The short title for the bill is “ Protect Student Borrowers Act of 2013.” The main aim of the bill is to protect students who borrow loans by demanding that universities and other institutions of higher learning assume part of the risk of defaulted loans.

According to the bill, schools face a fine of between 5 and 20 percent of the total amount owed by the students. Colleges can reduce these fines by putting in place plans to help students manage their loans effectively. For-profit colleges could be fined highly since graduates from these colleges default more often compared to those from public and nonprofit colleges. When it was introduced on 19th December 2013, the bill was read twice and referred to the Committee on Health, Education, Labor, and Pensions.

The bill currently remains with this committee and it is still being considered before it is sent to the House or Senate. Therefore, the bill is still under the introductory stage. The supporters of this bill argue that the bill will help to reduce the ever-increasing student loan debt. The bill will give student borrowers who are struggling to repay their loans a chance to refinance, and this will be beneficial to the lending institutions. They further argue that the bill will help to make education more affordable, and this will help reduce the amount of loan expenditure by the students.

The fines collected from the learning institutions would be used to address future shortfalls in the funds available for the federal Pell Grant. This will further help in increasing funding in the education sector. In addition, this bill will help loan borrowers declared bankrupt to have their loans discharged. The opponents of this bill, on the other hand, argue that since learning institutions face penalties if their students fail to pay their loans, it is likely that such institutions will limit students’ access to the federal loans.

This will in fact have a negative effect on education as a whole, as many students will find it difficult to access a college education. Opponents also argue that the bill attempts to classify or categorize learning institutions based on the loan default rates. Karen Gross (2014) argues that this is an unfair system since it fails to recognize the fact that most colleges admit students from low-income groups. As a result, some of these students fail to complete their education, and this further contributes to the default rate.

If the bill is enacted, it would mean that students from the lower-income groups are denied access to loan facilities, and this will negatively affect the level of education. Generally, the bill has not been perceived as being controversial but as a measure to reduce the loan default rates and the cost of education in the learning institutions. Perhaps the major issue will be in its implementation such that the bill is not seen to discourage colleges from assisting students to get loans.


Gross, Karen “Student Loans I: Yes, Something Is Wrong.” Inside Higher ED, March 21, 2014. < debt-problem-essay >

“S. 1873--113th Congress: Protect Student Borrowers Act of 2013.” 2013. March 27, 2014

“S.1873 - Protect Student Borrowers Act of 2013.” 2013. March 27, 2014. <>

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