I 

112TH CONGRESS 

2D SESSION H. R. 4390 

To amend the Higher Education Opportunity Act to restrict institutions 

of higher education from using revenues derived from Federal educational 

assistance funds for advertising, marketing, or recruiting purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 18, 2012 

Mr. GRIJALVA introduced the following bill; which was referred to the 

Committee on Education and the Workforce 

A BILL 

To amend the Higher Education Opportunity Act to restrict 

institutions of higher education from using revenues derived from Federal educational assistance funds for advertising, marketing, or recruiting purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. FINDINGS. 

4 (a) FINDINGS.—Congress finds the following: 

5 (1) From 1998 to 2008, enrollment in for-profit 

6 institutions of higher education increased by 225 

7 percent, from 553,000 students to 1,800,000 stu8 dents. 


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1 (2) On average, 86 percent of revenues at 15 

2 large, publicly traded companies that operate for3 profit institutions of higher education came from the 

4 Federal Government through student aid programs. 

5 (3) In 2009, students who enrolled at for-profit 

6 institutions of higher education received 

7 $30,000,000,000 in Federal Pell Grants and student 

8 loans. 

9 (4) Eight out of the 10 top recipients of Post10 9/11 Educational Assistance funds are for-profit in11 stitutions of higher education. For-profit colleges re12 ceived 37 percent ($4,400,000,000) of all Post-9/11 

13 Educational Assistance funds during the 2-year pe14 riod of August 1, 2009 through July 30, 2011. 

15 (5) Six of the top 10 military tuition assistance 

16 recipients are for-profit institutions of higher edu17 cation. For-profit colleges received half of all tuition 

18 assistance dollars—$280,000,000 out of 

19 $563,000,000 spent last year. 

20 (6) The 15 companies that received 86 percent 

21 of their revenues from Federal student aid programs 

22 spent $3,700,000,000 (23 percent of expenditures) 

23 on advertising, marketing, and recruitment in fiscal 

24 year 2009. 


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1 (7) According to documents obtained by the 

2 Committee on Health, Education, Labor and Pen3 sions of the Senate (referred to in this Act as the 

4 ‘‘HELP Committee’’), 30 companies operating for5 profit institutions of higher education spent 

6 $4,100,000,000 on advertising, marketing, and re7 cruitment in fiscal year 2009. 

8 (8) An analysis of 8 publicly traded companies 

9 that operate institutions of higher education shows 

10 that, on average, they spend 31 percent of expendi11 tures on advertising, marketing, and recruiting. 

12 (9) Documents obtained by the HELP Com13 mittee reveal that for-profit institutions of higher 

14 education have created sophisticated marketing 

15 plans and employed many third parties as well as 

16 large sales forces specifically tasked with enrolling as 

17 many students as possible, including veterans, 

18 servicemembers, and their families. 

19 (10) In 2010, an undercover investigation by 

20 the Government Accountability Office documented 

21 misleading and deceptive recruitment practices at 

22 each of 15 for-profit institutions of higher education 

23 campuses visited. Misleading statements included in24 formation regarding the cost of attendance, transferVerDate Mar 15 2010 20:37 Apr 23, 2012 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4390.IH H4390

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1 ability of credits, loan repayment by future employ2 ers, job placement, and likelihood of graduation. 

3 (11) Documents produced to the HELP Com4 mittee demonstrate that revenue from Federal funds 

5 is used to pay recruiters, who, at some for-profit in6 stitutions of higher education, are trained to exploit 

7 emotional vulnerabilities of prospective students to 

8 meet enrollment thresholds. 

9 (12) Documents produced to the HELP Com10 mittee demonstrate that revenues from Federal 

11 funds are used to pay very large sales staff titled 

12 ‘‘enrollment advisors’’, including 8,137, 5,669 and 

13 3,069 of such individuals at 3 large for-profit com14 panies. 

15 (13) The number of enrollment advisors at sev16 eral for-profit institutions of higher education exam17 ined by the HELP Committee are very dispropor18 tionate with the number of staff engaged in all stu19 dent support services, including job placement, 

20 which were 3,737, 2,582 and 2,472 at the same 3 

21 for-profit companies. 

22 SEC. 2. RESTRICTIONS ON SOURCES OF FUNDS FOR RE23 CRUITING AND MARKETING ACTIVITIES. 

24 Section 119 of the Higher Education Opportunity 

25 Act (20 U.S.C. 1011m) is amended— 


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1 (1) in the section heading, by inserting ‘‘AND

2 RESTRICTIONS ON SOURCES OF FUNDS FOR

3 RECRUITING AND MARKETING ACTIVITIES’’ 

4 after ‘‘FUNDS’’; 

5 (2) in subsection (d), by striking ‘‘subsections 

6 (a) through (c)’’ and inserting ‘‘subsections (a), (b), 

7 (c), and (e)’’; 

8 (3) by redesignating subsection (e) as sub9 section (f); and 

10 (4) by inserting after subsection (d) the fol11 lowing: 

12 ‘‘(e) RESTRICTIONS ON SOURCES OF FUNDS FOR RE13 CRUITING AND MARKETING ACTIVITIES.— 

14 ‘‘(1) IN GENERAL.—An institution of higher 

15 education, or other postsecondary educational insti16 tution, may not use revenues derived from Federal 

17 educational assistance funds for recruiting or mar18 keting activities described in paragraph (2). 

19 ‘‘(2) COVERED ACTIVITIES.—Except as pro20 vided in paragraph (3), the recruiting and marketing 

21 activities subject to paragraph (1) shall include the 

22 following: 

23 ‘‘(A) Advertising and promotion activities, 

24 including paid announcements in newspapers, 

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1 tronic media, naming rights, or any other public 

2 medium of communication, including paying for 

3 displays or promotions at job fairs, military in4 stallations, or college recruiting events. 

5 ‘‘(B) Efforts to identify and attract pro6 spective students, either directly or through a 

7 contractor or other third party, including con8 tact concerning a prospective student’s potential 

9 enrollment or application for grant, loan, or 

10 work assistance under title IV of the Higher 

11 Education Act of 1965 (20 U.S.C. 1070 et 

12 seq.) or participation in preadmission or advis13 ing activities, including— 

14 ‘‘(i) paying employees responsible for 

15 overseeing enrollment and for contacting 

16 potential students in-person, by phone, by 

17 email, or by other internet communications 

18 regarding enrollment; and 

19 ‘‘(ii) soliciting an individual to provide 

20 contact information to an institution of 

21 higher education, including websites estab22 lished for such purpose and funds paid to 

23 third parties for such purpose. 

24 ‘‘(C) Such other activities as the Secretary 

25 of Education may prescribe, including paying 


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1 for promotion or sponsorship of education or 

2 military-related associations. 

3 ‘‘(3) EXCEPTIONS.—Any activity that is re4 quired as a condition of receipt of funds by an insti5 tution under title IV of the Higher Education Act of 

6 1965 (20 U.S.C. 1070 et seq.), is specifically author7 ized under such title, or is otherwise specified by the 

8 Secretary of Education, shall not be considered to be 

9 a covered activity under paragraph (2). 

10 ‘‘(4) FEDERAL EDUCATIONAL ASSISTANCE

11 FUNDS.—In this subsection, the term ‘Federal edu12 cational assistance funds’ means funds provided di13 rectly to an institution or to a student attending 

14 such institution under any of the following provi15 sions of law: 

16 ‘‘(A) Title IV of the Higher Education Act 

17 of 1965 (20 U.S.C. 1070 et seq.). 

18 ‘‘(B) Chapter 30, 31, 32, 33, 34, or 35 of 

19 title 38, United States Code. 

20 ‘‘(C) Chapter 101, 105, 106A, 1606, 1607, 

21 or 1608 of title 10, United States Code. 

22 ‘‘(D) Section 1784a, 2005, or 2007 of title 

23 10, United States Code. 

24 ‘‘(E) Title I of the Workforce Investment 

25 Act of 1998 (29 U.S.C. 2801 et seq.). 


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1 ‘‘(F) The Adult Education and Family Lit2 eracy Act (20 U.S.C. 9201 et seq.). 

3 ‘‘(5) RULE OF CONSTRUCTION.—Nothing in 

4 this section shall be construed as a limitation on the 

5 use by an institution of revenues derived from 

6 sources other than Federal educational assistance 

7 funds. 

8 ‘‘(6) REPORTING.—Each institution of higher 

9 education, or other postsecondary educational insti10 tution, that receives revenues derived from Federal 

11 educational assistance funds shall report annually to 

12 the Secretary and to Congress the institution’s ex13 penditures on advertising, marketing, and recruit14 ing.’’. 

Æ 


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