Outcomes-Based Financing (OBF) for Students Act

This bill creates federal rules for "outcomes-based financing" (OBF) products, such as income share agreements, where students repay education or job-training funding based on their future income. It requires lenders to disclose key terms, including how payments are calculated, the minimum income before payments start, and a table of total costs at different income levels. It limits payments to 20 percent of income, sets a minimum income threshold of 250 percent of the federal poverty guidelines, caps terms at 240 monthly payments and 360 months, and ends obligations upon death or permanent disability. It changes tax rules for these products, allows them to be discharged in bankruptcy, and overrides certain state laws on interest limits, wage assignments, and payment terms unless states pass laws specifically addressing OBF products.

Full text and official record on Congress.gov

Sponsors

• Todd Young Republican sponsor
• 2 cosponsors