Todd Young (R-IN)
Outcomes-Based Financing (OBF) for Students Act
A Republican bill with 2 Democratic cosponsors · See all 2 cosponsors
Last activity — Read twice and referred to the Committee on Finance.
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, titled the "Outcomes-Based Financing (OBF) for Students Act," creates a legal and consumer protection framework for outcomes-based student financing tools. These tools are designed to support workforce training, postsecondary education, and economic development. The legislation establishes specific tax treatments for OBF products and dictates how they are handled under the Truth in Lending Act. It also implements required disclosures and rules for advertising to ensure consumers understand their obligations. Additionally, the bill provides consumer protections, such as limits on payment obligations and rules for bankruptcy and credit reporting.
Yes· 3 of 12
- Scored +7
Does this give people more protection from unfair business practices?
The bill establishes extensive disclosure requirements, income-based payment floors, and limits on total debt obligations to protect consumers.
- Scored +6
Would households on low incomes be better off under this?
The bill includes a $0 payment requirement for those earning below a specific income threshold.
- Scored +6
Would students be better off under this?
The bill implements significant protections including income-based payment floors and limits on total debt burden.
The opposite
- Scored -2
Does this protect people from being watched or searched?
The bill allows for the continuing release of taxpayer information to OBF providers for income verification.
Who it would affect, and how
Potential Positive Impacts for People
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Tax Benefits for Students: The bill ensures that the discharge of an outcomes-based loan or the termination of an agreement does not count as gross income for the individual (Section 101). Additionally, payments made under an outcomes-based payment agreement can be treated similarly to interest on a qualified education loan (Section 102).
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Enhanced Disclosure and Understanding: To help students understand complex financing, the Bureau is required to publish model integrated disclosure forms using readily understandable language (Section 201).
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Income-Based Protections: The bill mandates that if a recipient's income falls below a specific threshold, their periodic payment obligation must be $0 (Section 301). The income threshold must be at least 250 percent of the Federal poverty guidelines for a single person (Section s 301).
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Financial Safety Nets: Obligations under an OBF product are terminated upon the death of the recipient or if the recipient is deemed totally and permanently disabled (Section 301).
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Debt Management Limits: The bill prevents OBF products from requiring a person to commit more than 20 percent of their income to these payments (Section 301). It also sets a cap on the total number of payments at 240 monthly payments and a maximum duration of 360 months (Section 301).
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Protection Against Wage Seizure: OBF providers are prohibited from taking an assignment of an individual's earnings or wages as payment or security for the debt (Section 301).
Potential Negative Impacts for People
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Increased Debt Burden Risk: While there are limits, the bill allows for the calculation of future burdens based on various income scenarios, which may still result in significant obligations (Section 301).
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Limits on Bankruptcy Protections: The bill changes how these products are treated under bankruptcy laws, specifically stating that funds provided as part of an OBF product are excluded from certain discharge protections found in section 523(a)(8) of title 11 (Section 302).
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Income Verification Requirements: OBF providers are permitted to require documentation of income, such as tax transcripts, and if documentation is not provided, they may assign an income amount to the recipient to calculate payments (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 households on low incomes be better off under this? — The bill includes a $0 payment requirement for those earning below a specific income threshold. Would students be better off under this? — The bill implements significant protections including income-based payment floors and limits on total debt burden. Would people in their twenties and thirties be better off under this? — The bill provides flexible repayment terms tailored to post-graduation income levels. Would middle-income households be better off under this? — The bill offers tax treatments that can treat OBF payments similarly to education loan interest.
- Economy And Finance
- Does this give people more protection from unfair business practices? — The bill establishes extensive disclosure requirements, income-based payment floors, and limits on total debt obligations to protect consumers. Does this cut taxes for middle-income families? — The bill allows for the discharge of outcomes-based debt to be excluded from gross income. Is this likely to grow the economy? — The bill aims to support economic development by expanding accessible financing for postsecondary education. Is this likely to create jobs? — By supporting workforce training through OBF products, the bill may facilitate easier access to skill development. Does this cut taxes for small businesses? — The bill provides tax treatment that may benefit businesses engaging in employee training via OBF products.
- Education And Technology
- Does this make college cost less? — The bill creates a framework for flexible, income-contingent financing to support higher education expenses.
- Social Issues And Justice
- Is this likely to lift people out of poverty? — The bill mandates that payment obligations drop to zero if income falls below a set threshold.
- Governance And Ideology
- Does this make what the government does easier for the public to see? — The bill requires more conspicuous disclosures regarding payment calculation methods and income thresholds. Does this protect people from being watched or searched? — The bill allows for the continuing release of taxpayer information to OBF providers for income verification.
- 6/24/2026
- Read twice and referred to the Committee on Finance.
- 2 Cosponsors added.
- Introduced in Senate
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.
Christopher CoonsDemocrat · Delaware
Mark WarnerDemocrat · Virginia