Erin Houchin (R-IN)
Outcomes-Based Financing (OBF) for Students Act
A Republican bill with 1 Democratic cosponsor · See the cosponsor
Last activity — Referred to the Committee on Financial Services, and in addition to the Committees on Ways and Means, Education and Workforce, and the Judiciary, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
In committee
Introduced and handed to a committee in the chamber it started in.
The committee holds it, and most bills are never heard from again. A hearing or a committee vote would be news; silence is the usual outcome, and it kills the bill without anyone voting against it.
Its path through Congress
- Introduced
- In Committee
What this bill would do
This bill, known as the Outcomes-Based Financing (OBF) for Students Act, establishes a consumer protection framework for outcomes-based student financing tools. These tools are designed to support workforce training, postsecondary education, and economic development. The legislation includes specific tax treatments for OBF products and their providers. It also mandates strict disclosure requirements for OBF products to ensure recipients understand their obligations. Additionally, the bill provides consumer protections, such as limits on monthly payment obligations and protections against debt acceleration. Finally, it offers clarifications regarding bankruptcy treatment and the use of taxpayer information.
Yes· 3 of 8
- Scored +7
Does this give people more protection from unfair business practices?
The bill mandates strict disclosure requirements and caps monthly payment obligations at 20 percent of income for OBF products.
- Scored +6
Would students be better off under this?
The bill protects students through debt discharge upon disability or death and limits monthly payment burdens.
- Scored +5
Would households on low incomes be better off under this?
The bill provides protections like $0 obligations when income falls below a set threshold and termination upon disability.
The opposite
- Scored -2
Does this protect people from being watched or searched?
The bill facilitates the release of taxpayer information to OBF providers via continuing consent.
Who it would affect, and how
Potential Positive Impacts for People
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Tax Relief on Debt Discharge: Individuals will not have income included in their gross income due to the discharge or alteration of an outcomes-based loan or payment agreement (Section 101).
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Tax Deductions for Education: Payments made under an outcomes-based payment agreement will be treated similarly to interest paid on a qualified education loan (Section 102).
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Enhanced Disclosure and Transparency: OBF providers must disclose key terms like "payment calculation method," "income threshold," and "completion mechanisms" more conspicuously to help recipients understand the transaction (Section 201).
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Protection Against High Debt Burdens: An OBF provider cannot enter into an agreement if the recipient would be committing to pay more than 20 percent of their income (Section 301).
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Automatic Relief for Disability or Death: Obligations under an OBF product will terminate if the recipient becomes totally and permanently disabled or upon their death (Section 301).
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Lower Income Protections: The income threshold for an OBF product must be at least 250 percent of the Federal poverty guidelines for a single person (Section 301).
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Bankruptcy Protections: OBF products are treated such that they are dischargeable in bankruptcy in the same manner as other standard loans (Section 301/Section 302).
Potential Negative Impacts for People
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Restrictions on Debt Acceleration: While designed as a protection, the prohibition on accelerating debt during delinquency or default may limit certain legal avenues for providers (Section 301).
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Limited Use of Personal Information: The requirement for continuing consent to release taxpayer information may create hurdles in the process of carrying out the terms of the OBF product (Section 401).
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Requirement to Provide Income Documentation: OBF providers may require recipients to provide specific documentation, such as pay stubs or tax transcripts, to verify income (Section 301).
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Tap or hover a score for the reason it gave.
- Demographic And Interest Groups
- Would students be better off under this? — The bill protects students through debt discharge upon disability or death and limits monthly payment burdens. Would households on low incomes be better off under this? — The bill provides protections like $0 obligations when income falls below a set threshold and termination upon disability. Would middle-income households be better off under this? — The bill provides tax benefits for interest paid on outcomes-based payment agreements.
- Economy And Finance
- Does this give people more protection from unfair business practices? — The bill mandates strict disclosure requirements and caps monthly payment obligations at 20 percent of income for OBF products. Does this cut taxes for middle-income families? — The bill allows certain educational payment amounts to be treated as interest on a qualified education loan for tax purposes.
- Education And Technology
- Does this make college cost less? — The bill establishes a regulatory framework for outcomes-based financing to support workforce training and postsecondary education.
- Social Issues And Justice
- Is this likely to lift people out of poverty? — The bill protects recipients by requiring the income threshold to be at least 250 percent of the Federal poverty guidelines.
- Governance And Ideology
- Does this make what the government does easier for the public to see? — The bill enhances transparency by requiring conspicuous disclosure of payment calculation methods and income thresholds. Does this protect people from being watched or searched? — The bill facilitates the release of taxpayer information to OBF providers via continuing consent.
- 6/25/2026
- Referred to the Committee on Financial Services, and in addition to the Committees on Ways and Means, Education and Workforce, and the Judiciary, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- 1 Cosponsor added.
- Introduced in House
One bill Congress.gov lists as related to this one — companions in the other chamber, earlier versions, and bills this one absorbed or was folded into.
Ritchie TorresDemocrat · New York