II

107TH CONGRESS

1ST SESSION S. 1445

To amend the Higher Education Act of 1965 to expand the opportunities

for higher education via telecommunications.

IN THE SENATE OF THE UNITED STATES

SEPTEMBER 21, 2001

Mr. ENZI (for himself, Mr. DORGAN, Mr. FRIST, and Mr. HUTCHINSON) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions

A BILL

To amend the Higher Education Act of 1965 to expand

the opportunities for higher education via telecommunications.

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 ‘‘Internet Equity and

5 Education Act of 2001’’.

6 SEC. 2. EXCEPTION TO 50 PERCENT CORRESPONDENCE

7 COURSE LIMITATIONS.

8 (a) DEFINITION OF INSTITUTION OF HIGHER EDU9 CATION FOR TITLE IV PURPOSES.—Section 102(a) of the
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1 Higher Education Act of 1965 (20 U.S.C. 1002(a)) is

2 amended by adding at the end the following:

3 ‘‘(7) EXCEPTION TO LIMITATION BASED ON

4 COURSE OF STUDY.—Courses offered via tele5 communications (as defined in section 484(l)(4))

6 shall not be considered to be correspondence courses

7 for purposes of paragraph (3)(A) for any institution

8 that—

9 ‘‘(A) is participating in either or both of

10 the loan programs under part B or D of title

11 IV on the date of enactment of the Internet Eq12 uity and Education Act of 2001; and

13 ‘‘(B) has a cohort default rate (as deter14 mined under section 435(m)) for each of the 3

15 most recent fiscal years for which data are

16 available that is less than 10 percent.’’.

17 (b) DEFINITION OF ELIGIBLE STUDENT.—Section

18 484(l)(1) of the Higher Education Act of 1965 (20 U.S.C.

19 1091(l)(1)) is amended by adding at the end the following:

20 ‘‘(C) EXCEPTION TO 50 PERCENT LIMITA21 TION.—Notwithstanding the 50 percent limita22 tion in subparagraph (A), a student enrolled in

23 a course of instruction described in such sub24 paragraph shall not be considered to be enrolled
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1 in correspondence courses if the student is en2 rolled in an institution that—

3 ‘‘(i) is participating in either or both

4 of the loan programs under part B or D of

5 title IV on the date of enactment of the

6 Internet Equity and Education Act of

7 2001; and

8 ‘‘(ii) has a cohort default rate (as de9 termined under section 435(m)) for each of

10 the 3 most recent fiscal years for which

11 data are available that is less than 10 per12 cent.’’.

13 SEC. 3. DEFINITION OF ACADEMIC YEAR.

14 Section 481(a)(2) of the Higher Education Act of

15 1965 (20 U.S.C. 1088(a)(2)) is amended by inserting

16 after the first sentence the following: ‘‘For purposes of any

17 program under this title (whether a standard or non18 standard term program), a ‘‘week of instruction’’ is de19 fined as a week in which at least 1 day of instruction,

20 examination, or preparation for examination occurs.’’.

21 SEC. 4. INCENTIVE COMPENSATION.

22 (a) AMENDMENT.—Part G of title IV of the Higher

23 Education Act of 1965 (20 U.S.C. 1088 et seq.) is amend24 ed by inserting after section 484B (20 U.S.C. 1091b) the

25 following:
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1 ‘‘SEC. 484C. INCENTIVE COMPENSATION PROHIBITED.

2 ‘‘(a) PROHIBITION.—No institution of higher edu3 cation participating in a program under this title shall

4 make any payment of a commission, bonus, or other incen5 tive, non-salary payment, based directly on success in se6 curing enrollments or financial aid, to any person or entity

7 directly engaged in student recruiting or admission activi8 ties, or making decisions regarding the award of student

9 financial assistance, except that this section shall not

10 apply to the recruitment of foreign students residing in

11 foreign countries who are not eligible to receive Federal

12 student assistance.

13 ‘‘(b) EXCEPTION.—Subsection (a) shall not apply to

14 any contract with any third-party service provider that has

15 no control over eligibility for admission or enrollment or

16 the awarding of financial aid at the institution of higher

17 education, if no employee of the third-party service pro18 vider is compensated solely on the basis of student recruit19 ment goals or objectives.

20 ‘‘(c) DEFINITION OF SALARY.—For purposes of sub21 section (a), a person shall be treated as receiving a salary

22 (and not as receiving incentive compensation) when such

23 person receives a fixed compensation that is paid regularly

24 for services and that is adjusted no more frequently than

25 every 6 months.’’.
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1 (b) CONFORMING AMENDMENT.—Paragraph (20) of

2 section 487(a) of the Higher Education Act of 1965 (20

3 U.S.C. 1094(a)(20)) is repealed.

4 (c) TECHNICAL AMENDMENT.—Section 487(c)(1) of

5 the Higher Education Act of 1965 (20 U.S.C. 1094(c)(1))

6 is amended by striking ‘‘paragraph (2)(B)’’ each place it

7 appears in subparagraphs (F) and (H) and inserting

8 ‘‘paragraph (3)(B)’’.

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