To amend the Higher Education Act of 1965 regarding distance education, and for other purposes.

Summary: Distance Education and Online Learning Act of 2003 - Amends the Higher Education Act of 1965 to revise title IV student assistance provisions regarding distance education courses and programs, with respect to student eligibility, eligible programs, and requirements for recognition of accrediting agencies that evaluate institutions of higher education offering such programs.

SECTION 1. SHORT TITLE.

    This Act may be cited as ``Distance Education and Online Learning 
Act of 2003''.

SEC. 2. STUDENT ELIGIBILITY.

    Section 484(l)(1) of the Higher Education Act of 1965 (20 U.S.C. 
1091(l)(1)) is amended--
            (1) in subparagraph (A)--
                    (A) by striking ``in whole or in part'' and 
                inserting ``predominantly'';
                    (B) by striking ``of 1 year or longer''; and
                    (C) by striking ``unless'' and all that follows 
                through ``all courses at the institution''; and
            (2) by amending subparagraph (B) to read as follows:
                    ``(B) Requirement.--An institution of higher 
                education referred to in subparagraph (A) is an 
                institution of higher education that is not an 
                institution or school described in section 3(3)(C) of 
                the Carl D. Perkins Vocational and Technical Education 
                Act of 1998.''.

SEC. 3. DEFINITION OF ELIGIBLE PROGRAM.

    Section 481(b) of the Higher Education Act of 1965 (20 U.S.C. 
1088(b)) is amended by adding at the end the following:
            ``(3) Distance education programs.--
                    ``(A) In general.--A program that is offered 
                predominantly through distance education methods and 
                processes (other than correspondence courses) is an 
                eligible program for purposes of this title if--
                            ``(i) the program was reviewed and approved 
                        by an accrediting agency or association that--
                                    ``(I) is recognized by the 
                                Secretary under subpart 2 of part H; 
                                and
                                    ``(II) has evaluation of distance 
                                education programs within the scope of 
                                its recognition; and
                            ``(ii) the institution offering the program 
                        complies with clause (i) or clause (ii) of 
                        subparagraph (B).
                    ``(B) Additional criteria based on duration of 
                certification.--
                            ``(i) Certified for at least 4 years.--An 
                        institution complies with this clause if the 
                        institution has been certified as eligible to 
                        participate in programs under this title for at 
                        least four years and--
                                    ``(I) has not had its participation 
                                in programs under this title limited, 
                                suspended, or terminated within the 
                                preceding 5 years;
                                    ``(II) has not had or failed to 
                                resolve an audit finding or program 
                                review finding under this Act during 
                                the preceding 2 years that resulted in 
                                the institution being required to repay 
                                an amount that is greater than 5 
                                percent of the total funds the 
                                institution received under the programs 
                                authorized by this title for any award 
                                year covered by the audit or program 
                                review;
                                    ``(III) has not been found by the 
                                Secretary during the preceding 5 years 
                                to be in material noncompliance with 
                                the provisions of this Act related to 
                                the submission of acceptable and timely 
                                audit reports required under this 
                                title; and
                                    ``(IV) is determined to be 
                                financially responsible under 
                                regulations promulgated by the 
                                Secretary pursuant to section 498(c).
                            ``(ii) Certified for less than 4 years.--An 
                        institution complies with this clause if the 
                        institution has been certified as eligible to 
                        participate in programs under this title for 
                        less than four years, meets the requirements of 
                        clause (i), and--
                                    ``(I) the institution has not been 
                                subject to any action to suspend, 
                                revoke, withdraw, or terminate its 
                                authority to operate by a state;
                                    ``(II) the institution has not been 
                                subject to any action to suspend, 
                                revoke, withdraw, or terminate its 
                                accreditation and has not been placed 
                                on probation or an equivalent status by 
                                a recognized accrediting agency;
                                    ``(III) neither the institution nor 
                                any person who exercises substantial 
                                control over the institution have been 
                                administratively or judicially 
                                determined to have committed fraud or 
                                any other material violation of law 
                                involving the use of federal, state or 
                                local government funds; and
                                    ``(IV) no person who exercises 
                                substantial control over the 
                                institution has been directly or 
                                indirectly affiliated with an 
                                institution that has lost or been 
                                denied accreditation, has lost or been 
                                denied authority to operate by a state, 
                                has lost or been denied eligibility to 
                                participate in programs authorized 
                                under this title, has filed for 
                                bankruptcy, or has closed owing a 
                                liability for a program requirement 
                                under this Act.
                    ``(C) Consequences of withdrawl of approval.--If 
                the accreditation agency or association withdraws 
                approval of the program described in subparagraph 
                (A)(i), or the institution fails to meet any of the 
                requirements described in clause (i) or (ii) of 
                subparagraph (B) (whichever is applicable), or both, 
                then the program shall cease to be an eligible program 
                at the end of the award year in which such withdrawal 
                of approval or failure to meet such requirements 
                occurs. The program shall not be an eligible program 
                for any subsequent award year until the institution 
                obtains such approval or corrects such failure, or 
                both.''.

SEC. 4. RECOGNITION OF ACCREDITING AGENCY OR ASSOCIATION.

    Section 496 of the Higher Education Act of 1965 (20 U.S.C. 1099b) 
is amended--
            (1) in subsection (n)(3), by striking the last sentence and 
        inserting the following: ``If the agency or association 
        requests that the evaluation of institutions offering distance 
        education programs be included within its scope of recognition, 
        and demonstrates that the agency or association meets the 
        requirements of subsection (p), then the Secretary shall 
        include the accreditation of institutions offering distance 
        education programs within the agency's or association's scope 
        of recognition.''; and
            (2) by adding at the end the following:
    ``(p) Distance Education Programs.--An agency or association that 
seeks to evaluate the quality of institutions offering distance 
education programs within its scope of recognition shall, in addition 
to meeting the other requirements of this subpart, demonstrate to the 
Secretary that the agency or association assesses--
            ``(1) measures of student achievement of students enrolled 
        in distance education programs, including State licensing 
        examination results, and success in preparing students for 
        entry into and advancement in the work force;
            ``(2) measures of program completion and retention rates of 
        students in distance education programs, including monitoring 
        such rates throughout the accreditation period;
            ``(3) the preparation of faculty and students to 
        participate in distance education programs;
            ``(4) the quality and frequency of interaction between 
        faculty and students in distance education programs;
            ``(5) the availability of current and recognized learning 
        resources and support services for students in distance 
        education programs; and
            ``(6) measures to ensure the integrity of student and 
        faculty participation in distance education programs.''.