I

103D CONGRESS

2D SESSION H. R. 4384

To substitute evaluations of educational quality for cohort default rates in

eligibility determinations for proprietary institutions of higher education

under the Federal student assistance programs.

IN THE HOUSE OF REPRESENTATIVES

MAY 11, 1994

Mr. ANDREWS of New Jersey introduced the following bill; which was referred

to the Committee on Education and Labor

A BILL

To substitute evaluations of educational quality for cohort

default rates in eligibility determinations for proprietary

institutions of higher education under the Federal student assistance programs.

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 ‘‘Educational Quality

5 Index Act of 1994’’.

6 SEC. 2. FINDINGS.

7 The Congress finds that—
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1 (1) cohort default rates alone do not indicate

2 the quality of an educational institution;

3 (2) for the purpose of evaluating performance

4 of an institution of higher education, the population

5 which that institution serves should be taken into

6 account;

7 (3) schools whose students are from less afflu8 ent backgrounds have more difficulty with cohort de9 fault rate standards;

10 (4) use of the cohort default rates as a deter11 minant for participation in Federal student loan pro12 grams has kept technical and vocational school oper13 ators from opening schools in impoverished areas;

14 (5) many individuals living in impoverished

15 areas have been effectively denied an opportunity to

16 access technical and vocational higher education;

17 and

18 (6) the performance of a technical or vocational

19 institution of higher education can be measured by

20 objective data concerning the outcome from the per21 spective of the student.
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1 SEC. 3. USE OF EDUCATIONAL QUALITY IN INSTITUTIONAL

2 ELIGIBILITY FOR GUARANTEED STUDENT

3 LOAN PROGRAM.

4 Section 435(a) of the Higher Education Act of

5 1965 (20 U.S.C. 1085(a)) is amended—

6 (1) in paragraph (1), by striking ‘‘paragraph

7 (2)’’ and inserting ‘‘paragraphs (2) and (4)’’;

8 (2) in paragraph (2), by striking ‘‘An institu9 tion’’ and inserting ‘‘Except as provided in para10 graph (4), an institution’’;

11 (3) by adding at the end the following new

12 paragraph:

13 ‘‘(4) INELIGIBILITY BASED ON EDUCATIONAL

14 QUALITY INDEX.—

15 ‘‘(A) USE OF INDEX IN PLACE OF COHORT

16 DEFAULT RATE.—A proprietary institution of

17 higher education (as such term is defined in

18 section 481(b)) shall not be subject to ineligibil19 ity determinations under paragraph (2), but

20 shall be subject to such determinations on the

21 basis of the educational quality index prescribed

22 under this paragraph.

23 ‘‘(B) PRESCRIPTION OF INDEX.—The Sec24 retary of Education shall by regulation pre25 scribe an educational quality index for the pur26 pose of evaluating the programs of proprietary
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1 institutions of higher education. Such index

2 shall be equal to the sum of the following com3 ponent indexes:

4 ‘‘(i) A placement rate index which

5 shall be based on the percentage of stu6 dents who are employed in the field for

7 which the institution has trained them.

8 ‘‘(ii) A Pell grant eligibility index

9 equal to (I) the percentage of enrolled stu10 dents who are eligible for Pell grants,

11 minus (II) the national average percentage

12 of students who are so eligible at all insti13 tutions of higher education, divided by

14 (III) four.

15 ‘‘(iii) An index based on the institu16 tion’s cohort default rate (as determined

17 under subsection (m)).

18 ‘‘(iv) A successful completion index

19 which shall be based on graduation rates

20 (as determined for purposes of section

21 484(a)(1)(C)), or on certification or licen22 sure rates (if available).

23 ‘‘(C) CONTENTS OF REGULATIONS.—The

24 regulations prescribed by the Secretary under

25 subparagraph (B) shall—
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1 ‘‘(i) define the minimum aggregate

2 score that an proprietary institution of

3 higher education must achieve, as a sum of

4 the 4 indexes established under clauses (i),

5 (ii), and (iii) of such subparagraph, in

6 order for the institution to remain eligible

7 to participate in the programs under this

8 part;

9 ‘‘(ii) provide that the weights to be at10 tributed to such 4 indexes for purposes of

11 aggregating such score shall require that,

12 of the maximum possible aggregate

13 score—

14 ‘‘(I) 37.5 percent shall be attrib15 uted to the index described in sub16 paragraph (B)(i);

17 ‘‘(II) 25 percent shall be attrib18 uted to subparagraph (B)(ii);

19 ‘‘(III) 25 percent shall be attrib20 uted to subparagraph (B)(iii); and

21 ‘‘(IV) 12.5 percent shall be at22 tributed to subparagraph (B)(iv); and

23 ‘‘(iii) establish the procedures for the

24 determination of scores for individual insti-
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1 tutions, and for the resolution of disputes

2 concerning such scores.’’.

3 SEC. 4. USE OF EDUCATIONAL QUALITY INDEX IN PRO4 GRAM INTEGRITY REVIEWS.

5 (a) STATE REVIEW ENTITY CRITERIA.—Section

6 494C(a)(1) of the Higher Education Act of 1965 (20

7 U.S.C. 1099a–3(a)(1)) is amended by inserting before the

8 period the following: ‘‘or, in the case of a proprietary insti9 tution of higher education, an educational quality index

10 score that does not equal or exceed the minimum estab11 lished by the Secretary under section 435(a)(4)(B)(i)’’.

12 (b) PROGRAM REVIEW.—Section 498A(a)(2)(A) of

13 such Act (20 U.S.C. 1099c–1(a)(2)(A)) is amended by in14 serting before the semicolon the following: ‘‘or, in the case

15 of a proprietary institution of higher education, an edu16 cational quality index score that does not equal or exceed

17 the minimum established by the Secretary under section

18 435(a)(4)(B)(i)’’.

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