1. Short title This Act may be cited as the Preventing Financial Exploitation in Higher Education Act . 2. Institutional accountability for defaulted, delinquent, and underpaid student loans Part D of title IV of the Higher Education Act of 1965 ( 20 U.S.C. 1087a et seq. ) is amended by inserting after section 454 the following: 454A. Institutional accountability for defaulted, delinquent, and underpaid student loans (a) In general In accordance with subsection (b), a covered institution of higher education shall pay to the Secretary— (1) a penalty based on the institution’s cohort default rate for each fiscal year; (2) a penalty based on the institution’s cohort delinquency rate for each fiscal year; and (3) a penalty based on the institution’s cohort underpayment rate for each fiscal year. (b) Phase-In of cohort default rate penalty (1) Fiscal year 2024 A covered institution of higher education— (A) with a cohort default rate (as calculated under section 435(m)) for fiscal year 2024 that is 11 percent or more, shall pay to the Secretary a penalty in an amount equal to 30 percent of the total outstanding balance of principle and interest due on all loans under this part that are included in the calculation of such cohort default rate for such fiscal year; (B) with a cohort delinquency rate (as determined by the Secretary) for fiscal year 2024 that is 10 percent or more shall pay to the Secretary a penalty in an amount equal to 28 percent of the total outstanding balance of principle and interest due on all loans under this part that are included in the calculation of such cohort delinquency rate for such fiscal year