SECTION 1. SHORT TITLE.

    This Act may be cited as the ``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)(A) 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--
                            ``(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 10 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).
            ``(B) 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 
        subparagraph (A)(ii), 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 until the 
        provisions of subparagraph (A) (i) and (ii) are met again.
            ``(4) The Secretary shall promulgate regulations for 
        determining whether a program that offers a degree or 
        certificate on the basis of a competency assessment, that 
        examines the content of the course work provided by the 
        institution of higher education, is an eligible program for 
        purposes of this title.''.

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;
            ``(2) the preparation of faculty and students to 
        participate in distance education programs;
            ``(3) the quality of interaction between faculty and 
        students in distance education programs;
            ``(4) the availability of learning resources and support 
        services for students in distance education programs; and
            ``(5) measures to ensure the integrity of student 
        participation in distance education programs.''.
Distance Education and Online Learning Act of 2003 - Amends the Higher Education Act of 1965 to revise title IV student assistance requirements for distance education courses and programs with respect to student eligibility, eligible programs, and criteria for recognition of accrediting agencies that evaluate institutions of higher education offering such programs.
A bill to amend the Higher Education Act of 1965 regarding distance education, and for other purposes.