To amend the Higher Education Act of 1965 to provide greater academic freedom for institutions of higher education, and for other purposes.

SECTION 1. SHORT TITLE; REFERENCES.

    (a) Short Title.--This Act may be cited as the ``Higher Education 
Accrediting Agency Responsibility Act of 2002''.
    (b) References to Higher Education Act of 1965.--Except as 
otherwise expressly provided, whenever in this Act an amendment or 
repeal is expressed in terms of an amendment to, or repeal of, a 
section or other provision, the reference shall be considered to be 
made to a section or other provision of the Higher Education Act of 
1965.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--Congress finds the following:
            (1) Accrediting agencies were originally intended to 
        provide voluntary, nongovernmental oversight of institutions of 
        higher education.
            (2) However, Congress has allowed accreditors to become 
        gatekeepers of more than $40,000,000,000 of Federal student aid 
        funds due to such agencies role, enshrined in current Federal 
        law, to help determine an institution's eligibility to 
        participate in Federal student aid programs.
            (3) More effective and less costly mechanisms are already 
        in place to protect students and parents, as no institution can 
        receive Federal funds until the Department of Education 
        certifies its financial and administrative capacity. 
        Additionally, the amount of useful information publicly 
        available about the quality of academic institutions has grown 
        dramatically in recent years and now far exceeds the minimal 
        amount conveyed by the accreditation system.
            (4) It is virtually unknown for an institution to be denied 
        accreditation because of low educational values, despite 
        growing public concern that American college graduates are 
        lacking the skills necessary for participation in civic life.
            (5) The time and effort required of institutions of higher 
        education to comply with the accreditation process imposes 
        costs which must ultimately be borne by students and parents.
    (b) Purposes.--The purposes of this Act are as follows:
            (1) To refocus the purpose of accreditation on providing 
        comparative information about the quality of institutions of 
        higher education, rather than determining student aid 
        eligibility, which should properly be the responsibility of the 
        Department of Education.
            (2) To end the virtual monopoly that today's accrediting 
        agencies enjoy, and require them to operate in a competitive 
        environment like any other industry.

SEC. 3. AMENDMENTS AND REPEALS.

    (a) Qualification of Institutions of Higher Education.--Section 101 
of the Higher Education Act of 1965 (20 U.S.C. 1001) is amended--
            (1) in subsection (a)--
                    (A) by adding ``and'' at the end of paragraph (3);
                    (B) by striking ``; and'' at the end of paragraph 
                (4) and inserting a period; and
                    (C) by striking paragraph (5); and
            (2) by striking subsection (c).
    (b) Qualification of Proprietary Institutions of Higher 
Education.--Section 102(b)(1) (20 U.S.C. 1002(b)(1)) is amended--
            (1) by striking subparagraph (D); and
            (2) by redesignating subparagraphs (E) and (F) as 
        subparagraphs (D) and (E), respectively.
    (c) National Advisory Committee on Institutional Quality and 
Integrity.--Section 114 (20 U.S.C. 1011c) is repealed.
    (d) Disclosures of Foreign Gifts.--Section 117(h)(4) (20 U.S.C. 
1011f(h)(4)) is amended--
            (1) by adding ``and'' at the end of subparagraph (A); and
            (2) by striking subparagraph (C).
    (e) Title III Eligible Institutions.--Section 312(b)(1) (20 U.S.C. 
1058(b)(1)) is amended--
            (1) by striking subparagraph (D); and
            (2) by redesignating subparagraphs (E) and (F) as 
        subparagraphs (D) and (E), respectively.
    (f) Title III Definitions.--Section 322(2) (20 U.S.C. 1061(2)) is 
amended--
            (1) by inserting ``and'' after ``1964'',''; and
            (2) by striking ``and that is accredited'' and all that 
        follows through ``toward accreditation,''.
    (g) HBCU Capital Financing.--Section 342(5) (20 U.S.C. 1066a(5)) is 
amended--
            (1) by adding ``and'' at the end of subparagraph (F);
            (2) by striking subparagraph (G); and
            (3) by redesignating subparagraph (H) as subparagraph (G).
    (h) Conforming Amendment.--Section 365 (20 U.S.C. 1067k) is 
amended--
            (1) by striking paragraph (1); and
            (2) by redesignating paragraphs (2) through (9) as 
        paragraphs (1) through (8), respectively.
    (i) Distance Education Demonstration Programs.--Section 486(c)(2) 
(20 U.S.C. 1093(c)(2)) is amended--
            (1) by striking subparagraph (A); and
            (2) by redesignating subparagraphs (B) through (F) as 
        subparagraphs (A) through (E), respectively.
    (j) Program Participation Agreements.--Section 487 (20 U.S.C. 1094) 
is amended--
            (1) in subsection (a)(3)--
                    (A) by adding ``and'' at the end of subparagraph 
                (A);
                    (B) by striking ``; and'' at the end of 
                subparagraph (B) and inserting a period; and
                    (C) by striking subparagraph (C);
            (2) in subsection (a)(15), by striking ``accrediting 
        agencies,'';
            (3) in subsection (a)(21), by striking ``and accrediting 
        agencies or associations''; and
            (4) in subsection (c)(5)--
                    (A) by inserting ``and'' after ``eligible 
                lenders,''; and
                    (B) by striking ``, and accrediting agencies or 
                associations''.
    (k) Accrediting Agency Recognition.--Section 496 (20 U.S.C. 1099b) 
is repealed.
    (l) Eligibility and Certification Procedures.--Section 498 (20 
U.S.C. 1099c) is amended--
            (1) in subsection (a), by striking ``accreditation''; and
            (2) in subsection (b), by striking ``accreditation,'' each 
        place it appears.

SEC. 4. EFFECTIVE DATE.

    The amendments made by this Act shall apply be effective on 
September 1, 2002.

Summary: Higher Education Accrediting Agency Responsibility Act of 2002 - Amends the Higher Education Act of 1965 (HEA) to remove requirements that institutions of higher education (IHEs) be accredited or preaccredited by a nationally recognized accrediting agency or association in order to receive Federal funds under various HEA programs, including student aid under HEA title IV. Removes such accreditation requirements with respect to IHEs, proprietary IHEs, special institutional aid under HEA title III, historically Black college and university capital financing, distance education demonstration programs, and student assistance program participation agreements. Repeals provisions for: (1) the National Advisory Committee on Institutional Quality and Integrity, and (2) recognition of accrediting agencies or associations under HEA.