I 

113TH CONGRESS 

1ST SESSION H. R. 2155 

To award grants in order to establish longitudinal personal college readiness 

and savings online platforms for low-income students. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 23, 2013 

Mr. FATTAH (for himself and Mr. HINOJOSA) introduced the following bill; 

which was referred to the Committee on Education and the Workforce 

A BILL 

To award grants in order to establish longitudinal personal 

college readiness and savings online platforms for lowincome students. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘American Dream Ac5 counts Act of 2013’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 

8 (1) Only 9.8 out of every 100 individuals from 

9 low-income families will graduate from an institution 

10 of higher education before reaching the age of 24. 


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1 (2) Lack of knowledge about how to apply to, 

2 and pay for, an institution of higher education is a 

3 barrier for many low-income students and students 

4 who would be in the first generation in their families 

5 to attend an institution of higher education. 

6 (3) According to Public Agenda, most young 

7 adults give secondary school counselors fair or poor 

8 ratings for advice about attending an institution of 

9 higher education, including advice about how to de10 cide what institution of higher education to attend, 

11 how to pay for higher education, what careers to 

12 pursue, and how to apply to an institution of higher 

13 education. 

14 (4) More than 1,700,000 students fail to file 

15 the Free Application for Federal Student Aid 

16 (FAFSA), and about one-third of such students 

17 would qualify for a Federal Pell Grant. 

18 (5) During the last 2 decades, costs of attend19 ing institutions of higher education have increased 

20 dramatically, but need-based financial aid has not 

21 kept pace with such increasing costs. 

22 (6) In the 1990–1991 school year, the max23 imum Federal Pell Grant covered 45 percent of the 

24 average cost of attendance at a public 4-year institu25 tion of higher education (including tuition, fees, 


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1 room, and board), but in the 2010–2011 school year, 

2 the maximum Federal Pell Grant covered only 34 

3 percent of such cost. 

4 (7) Parental and youth college savings are 

5 strong predictors of a youth’s expectations about at6 tendance at an institution of higher education. 

7 (8) Only 32 percent of parents who earn less 

8 than $35,000 a year are saving for their child’s edu9 cation at an institution of higher education. 

10 (9) According to the Center for Social Develop11 ment, ‘‘wilt’’ occurs when a young person who ex12 pects to graduate from a 4-year institution of higher 

13 education has not yet attended such institution by 

14 the ages of 19 to 22. 

15 (10) Children who have savings dedicated for 

16 attendance at an institution of higher education are 

17 4 times more likely to attend a 4-year institution of 

18 higher education and avoid ‘‘wilt’’. 

19 SEC. 3. DEFINITIONS. 

20 In this Act: 

21 (1) ESEA DEFINITIONS.—The terms ‘‘local 

22 educational agency’’, ‘‘parent’’, ‘‘State educational 

23 agency’’, and ‘‘Secretary’’ shall have the meanings 

24 given the terms in section 9101 of the Elementary 

25 and Secondary Education Act of 1965 (20 U.S.C. 


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1 7801) and the term ‘‘charter school’’ shall have the 

2 meaning given the term in section 5210 of such Act. 

3 (2) AMERICAN DREAM ACCOUNT.—The term 

4 ‘‘American Dream Account’’ means a personal on5 line account for low-income students that monitors 

6 higher education readiness and includes a college 

7 savings account. 

8 (3) APPROPRIATE COMMITTEES OF CON9 GRESS.—The term ‘‘appropriate committees of Con10 gress’’ means the Committee on Health, Education, 

11 Labor, and Pensions, the Committee on Appropria12 tions, and the Committee on Finance of the Senate, 

13 and the Committee on Education and the Work14 force, the Committee on Appropriations, and the 

15 Committee on Ways and Means of the House of 

16 Representatives, as well as any other Committee of 

17 the Senate or House of Representatives that the 

18 Secretary determines appropriate. 

19 (4) COLLEGE SAVINGS ACCOUNT.—The term 

20 ‘‘college savings account’’ means a savings account 

21 that— 

22 (A) provides some tax-preferred accumula23 tion; 

24 (B) is widely available (such as Qualified 

25 Tuition Programs under section 529 of the InVerDate Mar 15 2010 23:33 May 30, 2013 Jkt 029200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2155.IH H2155

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1 ternal Revenue Code of 1986 or Coverdell Edu2 cation Savings Accounts under section 530 of 

3 the Internal Revenue Code of 1986); and 

4 (C) contains funds that may be used only 

5 for the costs associated with attending an insti6 tution of higher education, including— 

7 (i) tuition and fees; 

8 (ii) room and board; 

9 (iii) textbooks; 

10 (iv) supplies and equipment; and 

11 (v) Internet access. 

12 (5) DUAL ENROLLMENT PROGRAM.—The term 

13 ‘‘dual enrollment program’’ means an academic pro14 gram through which a secondary school student is 

15 able simultaneously to earn credit toward a sec16 ondary school diploma and a postsecondary degree 

17 or credential. 

18 (6) ELIGIBLE ENTITY.—The term ‘‘eligible enti19 ty’’ means— 

20 (A) a State educational agency; 

21 (B) a local educational agency; 

22 (C) a charter school; 

23 (D) a charter management organization; 

24 (E) an institution of higher education; 

25 (F) a nonprofit organization; 


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1 (G) an entity with demonstrated experience 

2 in educational savings or in assisting low-in3 come students to prepare for, and attend, an in4 stitution of higher education; or 

5 (H) a consortium of 2 or more of the enti6 ties described in subparagraphs (A) through 

7 (G). 

8 (7) INSTITUTION OF HIGHER EDUCATION.—The 

9 term ‘‘institution of higher education’’ has the 

10 meaning given the term in section 101(a) of the 

11 Higher Education Act of 1965 (20 U.S.C. 1001(a)). 

12 (8) LOW-INCOME STUDENT.—The term ‘‘low-in13 come student’’ means a student who is eligible to re14 ceive a free or reduced price lunch under the Rich15 ard B. Russell National School Lunch Act (42 

16 U.S.C. 1751 et seq.). 

17 SEC. 4. GRANT PROGRAM. 

18 (a) PROGRAM AUTHORIZED.—The Secretary is au19 thorized to award grants, on a competitive basis, to eligible 

20 entities to enable such eligible entities to establish and ad21 minister American Dream Accounts for a group of low22 income students. 

23 (b) RESERVATION.—From the amount appropriated 

24 each fiscal year to carry out this Act, the Secretary shall 


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1 reserve not more than 5 percent of such amount to carry 

2 out the evaluation activities described in section 7(a). 

3 (c) DURATION.—A grant awarded under this Act 

4 shall be for a period of not more than 3 years. The Sec5 retary may extend such grant for an additional 2-year pe6 riod if the Secretary determines that the eligible entity has 

7 demonstrated significant progress, based on the factors 

8 described in section 5(b)(11). 

9 SEC. 5. APPLICATIONS; PRIORITY. 

10 (a) IN GENERAL.—Each eligible entity desiring a 

11 grant under this Act shall submit an application to the 

12 Secretary at such time, in such manner, and containing 

13 such information as the Secretary may require. 

14 (b) CONTENTS.—At a minimum, the application de15 scribed in subsection (a) shall include the following: 

16 (1) A description of the characteristics of a 

17 group of not less than 30 low-income public school 

18 students who— 

19 (A) are, at the time of the application, at20 tending a grade not higher than grade 9; and 

21 (B) will, under the grant, receive an Amer22 ican Dream Account. 

23 (2) A description of how the eligible entity will 

24 engage, and provide support (such as tutoring and 

25 mentoring for students, and training for teachers 


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1 and other stakeholders) either online or in person, 

2 to— 

3 (A) the students in the group described in 

4 paragraph (1); 

5 (B) the family members and teachers of 

6 such students; and 

7 (C) other stakeholders such as school ad8 ministrators and school counselors. 

9 (3) An identification of partners who will assist 

10 the eligible entity in establishing and sustaining 

11 American Dream Accounts. 

12 (4) A description of what experience the eligible 

13 entity or the eligible entity’s partners have in man14 aging college savings accounts, preparing low-income 

15 students for postsecondary education, managing on16 line systems, and teaching financial literacy. 

17 (5) A demonstration that the eligible entity has 

18 sufficient resources to provide an initial deposit into 

19 the college savings account portion of each American 

20 Dream Account. 

21 (6) A description of how the eligible entity will 

22 help increase the value of the college savings account 

23 portion of each American Dream Account, such as 

24 by providing matching funds or incentives for aca25 demic achievement. 


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1 (7) A description of how the eligible entity will 

2 notify each participating student in the group de3 scribed in paragraph (1), on a semiannual basis, of 

4 the current balance and status of the student’s col5 lege savings account portion of the student’s Amer6 ican Dream Account. 

7 (8) A plan that describes how the eligible entity 

8 will monitor participating students in the group de9 scribed in paragraph (1) to ensure that each stu10 dent’s American Dream Account will be maintained 

11 if a student in such group changes schools before 

12 graduating from secondary school. 

13 (9) A plan that describes how the American 

14 Dream Accounts will be managed for not less than 

15 1 year after a majority of the students in the group 

16 described in paragraph (1) graduate from secondary 

17 school. 

18 (10) A description of how the eligible entity will 

19 encourage students in the group described in para20 graph (1) who fail to graduate from secondary 

21 school to continue their education. 

22 (11) A description of how the eligible entity will 

23 evaluate the grant program, including by collecting, 

24 as applicable, the following data about the students 

25 in the group described in paragraph (1) during the 


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1 grant period, and, if sufficient grant funds are avail2 able, after the grant period: 

3 (A) Attendance rates. 

4 (B) Progress reports. 

5 (C) Grades and course selections. 

6 (D) The student graduation rate, as de7 fined in section 1111(b)(2)(C)(vi) of the Ele8 mentary and Secondary Education Act of 1965 

9 (20 U.S.C. 6311(b)(2)(C)(vi)). 

10 (E) Rates of student completion of the 

11 Free Application for Federal Student Aid de12 scribed in section 483 of the Higher Education 

13 Act of 1965 (20 U.S.C. 1090). 

14 (F) Rates of enrollment in an institution of 

15 higher education. 

16 (G) Rates of completion at an institution 

17 of higher education. 

18 (12) A description of what will happen to the 

19 funds in the college savings account portion of the 

20 American Dream Accounts that are dedicated to 

21 participating students described in paragraph (1) 

22 who have not matriculated at an institution of high23 er education at the time of the conclusion of the pe24 riod of American Dream Account management de25 scribed in paragraph (9). 


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1 (13) A description of how the eligible entity will 

2 ensure that funds in the college savings account por3 tion of the American Dream Accounts will not make 

4 families ineligible for public assistance. 

5 (14) A description of how the eligible entity will 

6 ensure that participating students described in para7 graph (1) will have access to the Internet. 

8 (c) PRIORITY.—In awarding grants under this Act, 

9 the Secretary shall give priority to applications from eligi10 ble entities that— 

11 (1) are described in section 3(6)(H); 

12 (2) serve the largest number of low-income stu13 dents; or 

14 (3) in the case of an eligible entity described in 

15 subparagraphs (A) or (B) of section 3(6), provide 

16 opportunities for participating students described in 

17 paragraph (1) to participate in a dual enrollment 

18 program at no cost to the student. 

19 SEC. 6. AUTHORIZED ACTIVITIES. 

20 (a) IN GENERAL.—An eligible entity that receives a 

21 grant under this Act shall use such grant funds to estab22 lish an American Dream Account for each participating 

23 student described in section 5(b)(1), which will be used 

24 to— 


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1 (1) open a college savings account for such stu2 dent; 

3 (2) monitor the progress of such student online, 

4 which— 

5 (A) shall include monitoring student data 

6 relating to— 

7 (i) grades and course selections; 

8 (ii) progress reports; and 

9 (iii) attendance and disciplinary 

10 records; and 

11 (B) may also include monitoring student 

12 data relating to a broad range of information, 

13 provided by teachers and family members, re14 lated to postsecondary education readiness, ac15 cess, and completion; 

16 (3) provide opportunities for such students, ei17 ther online or in person, to learn about financial lit18 eracy, including by— 

19 (A) assisting such students in financial 

20 planning for enrollment in an institution of 

21 higher education; and 

22 (B) assisting such students in identifying 

23 and applying for financial aid (such as loans, 

24 grants, and scholarships) for an institution of 

25 higher education; 


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1 (4) provide opportunities for such students, ei2 ther online or in person, to learn about preparing for 

3 enrollment in an institution of higher education, in4 cluding by providing instruction to students about— 

5 (A) choosing the appropriate courses to 

6 prepare for postsecondary education; 

7 (B) applying to an institution of higher 

8 education; 

9 (C) building a student portfolio, which may 

10 be used when applying to an institution of high11 er education; 

12 (D) selecting an institution of higher edu13 cation; 

14 (E) choosing a major for the student’s 

15 postsecondary program of education or a career 

16 path; and 

17 (F) adapting to life at an institution of 

18 higher education; and 

19 (5) provide opportunities for such students, ei20 ther online or in person, to identify skills or inter21 ests, including career interests. 

22 (b) ACCESS TO AMERICAN DREAM ACCOUNT.— 

23 (1) IN GENERAL.—Subject to paragraphs (3) 

24 and (4), and in accordance with applicable Federal 

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1 tion and the privacy of children, an eligible entity 

2 that receives a grant under this Act shall allow vest3 ed stakeholders, as described in paragraph (2), to 

4 have secure access, through the Internet, to an 

5 American Dream Account. 

6 (2) VESTED STAKEHOLDERS.—The vested 

7 stakeholders that an eligible entity shall permit to 

8 access an American Dream Account are individuals 

9 (such as the student’s teachers, school counselors, 

10 counselors at an institution of higher education, 

11 school administrators, or other individuals) that are 

12 designated, in accordance with the Family Edu13 cational Rights and Privacy Act of 1974 (20 U.S.C. 

14 1232g), by the parent of a participating student in 

15 whose name such American Dream Account is held, 

16 as having permission to access the account. A stu17 dent’s parent may withdraw such designation from 

18 an individual at any time. 

19 (3) EXCEPTION FOR COLLEGE SAVINGS AC20 COUNT.—An eligible entity that receives a grant 

21 under this Act shall not be required to give vested 

22 stakeholders, as described in paragraph (2), access 

23 to the college savings account portion of a student’s 

24 American Dream Account. 


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1 (4) ADULT STUDENTS.—Notwithstanding para2 graphs (1), (2), and (3), if a participating student 

3 is age 18 or older, an eligible entity that receives a 

4 grant under this Act shall not provide access to such 

5 participating student’s American Dream Account 

6 without the student’s consent, in accordance with 

7 the Family Educational Rights and Privacy Act of 

8 1974 (20 U.S.C. 1232g). 

9 (5) INPUT OF STUDENT INFORMATION.—Stu10 dent data collected pursuant to subsection (a)(2)(A) 

11 shall be entered into an American Dream Account 

12 only by a school administrator or such administra13 tor’s designee. 

14 (c) PROHIBITION ON USE OF STUDENT INFORMA15 TION.—An eligible entity that receives a grant under this 

16 Act shall not use any student-level information or data for 

17 the purpose of soliciting, advertising, or marketing any fi18 nancial or non-financial consumer product or service that 

19 is offered by such eligible entity, or on behalf of any other 

20 person. 

21 (d) PROHIBITION ON THE USE OF GRANT FUNDS.— 

22 An eligible entity shall not use grant funds provided under 

23 this Act to provide the initial deposit into a college savings 

24 account portion of a student’s American Dream Account. 


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1 SEC. 7. REPORTS AND EVALUATIONS. 

2 (a) IN GENERAL.—Not later than 1 year after the 

3 Secretary has disbursed grants under this Act, and annu4 ally thereafter until each grant disbursed under section 4 

5 has ended, the Secretary shall prepare and submit a report 

6 to the appropriate committees of Congress, which shall in7 clude an evaluation of the effectiveness of the grant pro8 gram established under this Act. 

9 (b) CONTENTS.—The report described in subsection 

10 (a) shall— 

11 (1) list the grants that have been awarded 

12 under section 4(a); 

13 (2) include the number of students who have an 

14 American Dream Account established through a 

15 grant awarded under section 4(a); 

16 (3) provide data (including the interest accrued 

17 on college savings accounts that are part of an 

18 American Dream Account) in the aggregate, regard19 ing students who have an American Dream Account 

20 established through a grant awarded under section 

21 4(a), as compared to similarly situated students who 

22 do not have an American Dream Account; 

23 (4) identify best practices developed by the eli24 gible entities receiving grants under this Act; 


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1 (5) identify any issues related to student pri2 vacy and stakeholder accessibility to American 

3 Dream Accounts; 

4 (6) provide feedback from participating stu5 dents and the parents of such students about the 

6 grant program, including— 

7 (A) the impact of the program; 

8 (B) aspects of the program that are suc9 cessful; 

10 (C) aspects of the program that are not 

11 successful; and 

12 (D) any other data required by the Sec13 retary; and 

14 (7) provide recommendations for expanding the 

15 American Dream Accounts program. 

16 SEC. 8. ELIGIBILITY TO RECEIVE FEDERAL STUDENT FI17 NANCIAL AID. 

18 Notwithstanding any other provision of law, any 

19 funds that are in the college savings account portion of 

20 a student’s American Dream Account shall not affect such 

21 student’s eligibility to receive Federal student financial 

22 aid, including any Federal student financial aid under the 

23 Higher Education Act of 1965 (20 U.S.C. 1001), and 

24 shall not be considered in determining the amount of any 

25 such Federal student aid. 


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1 SEC. 9. AUTHORIZATION OF APPROPRIATIONS. 

2 There are authorized to be appropriated to carry out 

3 this Act $3,000,000 for fiscal year 2013, from existing 

4 Department of Education funds, and such sums as may 

5 be necessary for each subsequent fiscal year. 

6 SEC. 10. CONFORMING AMENDMENT. 

7 Section 480(j) of the Higher Education Act of 1965 

8 (20 U.S.C. 1087vv(j)) is amended by adding at the end 

9 the following: 

10 ‘‘(5) Notwithstanding paragraph (1), amounts 

11 made available under the college savings account 

12 portion of an American Dream Account under the 

13 American Dream Accounts Act of 2013 shall not be 

14 treated as estimated financial assistance for pur15 poses of section 471(3).’’. 

Æ 


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