PUBLIC LAW 106–420—NOV. 1, 2000 114 STAT. 1867

Public Law 106–420

106th Congress

An Act

To enhance protections against fraud in the offering of financial assistance for

college education, and for other purposes.

Be it enacted by the Senate and House of Representatives of

the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘‘College Scholarship Fraud

Prevention Act of 2000’’.

SEC. 2. FINDINGS.

Congress makes the following findings:

(1) A substantial amount of fraud occurs in the offering

of college education financial assistance services to consumers.

(2) Such fraud includes the following:

(A) Misrepresentations regarding the provision of

sources from which consumers may obtain financial assistance (including scholarships, grants, loans, tuition, awards,

and other assistance) for purposes of financing a college

education.

(B) Misrepresentations regarding the provision of portfolios of such assistance tailored to the needs of specific

consumers.

(C) Misrepresentations regarding the pre-selection of

students as eligible to receive such assistance.

(D) Misrepresentations that such assistance will be

provided to consumers who purchase specified services from

specified entities.

(E) Misrepresentations regarding the business relationships between particular entities and entities that award

or may award such assistance.

(F) Misrepresentations regarding refunds of processing

fees if consumers are not provided specified amounts of

such assistance, and other misrepresentations regarding

refunds.

(3) In 1996, the Federal Trade Commission launched

‘‘Project Scholarscam’’, a joint law enforcement and consumer

education campaign directed at fraudulent purveyors of socalled ‘‘scholarship services’’.

(4) Despite the efforts of the Federal Trade Commission,

colleges and universities, and nongovernmental organizations,

the continued lack of awareness about scholarship fraud permits a significant amount of fraudulent activity to occur.

20 USC 1092d

note.

20 USC 1001

note.

College

Scholarship

Fraud Prevention

Act of 2000.

Nov. 1, 2000

[S. 1455]

114 STAT. 1868 PUBLIC LAW 106–420—NOV. 1, 2000

SEC. 3. SENTENCING ENHANCEMENT FOR HIGHER EDUCATION

FINANCIAL ASSISTANCE FRAUD.

Pursuant to its authority under section 994(p) of title 28, United

States Code, the United States Sentencing Commission shall amend

the Federal sentencing guidelines in order to provide for enhanced

penalties for any offense involving fraud or misrepresentation in

connection with the obtaining or providing of, or the furnishing

of information to a consumer on, any scholarship, grant, loan,

tuition, discount, award, or other financial assistance for purposes

of financing an education at an institution of higher education,

such that those penalties are comparable to the base offense level

for misrepresentation that the defendant was acting on behalf of

a charitable, educational, religious, or political organization, or a

government agency.

SEC. 4. EXCLUSION OF DEBTS RELATING TO COLLEGE FINANCIAL

ASSISTANCE SERVICES FRAUD FROM PERMISSIBLE EXEMPTIONS OF PROPERTY FROM ESTATES IN BANKRUPTCY.

Section 522(c) of title 11, United States Code, is amended—

(1) by striking ‘‘or’’ at the end of paragraph (2);

(2) by striking the period at the end of paragraph (3)

and inserting ‘‘; or’’; and

(3) by adding at the end the following:

‘‘(4) a debt in connection with fraud in the obtaining or

providing of any scholarship, grant, loan, tuition, discount,

award, or other financial assistance for purposes of financing

an education at an institution of higher education (as that

term is defined in section 101 of the Higher Education Act

of 1965 (20 U.S.C. 1001)).’’.

SEC. 5. SCHOLARSHIP FRAUD ASSESSMENT AND AWARENESS ACTIVITIES.

(a) ANNUAL REPORT ON SCHOLARSHIP FRAUD.—

(1) REQUIREMENT.—The Attorney General and the Secretary of Education, in conjunction with the Federal Trade

Commission, shall jointly submit to Congress each year a report

on fraud in the offering of financial assistance for purposes

of financing an education at an institution of higher education.

Each report shall contain an assessment of the nature and

quantity of incidents of such fraud during the one-year period

ending on the date of such report.

(2) INITIAL REPORT.—The first report under paragraph (1)

shall be submitted not later than 18 months after the date

of the enactment of this Act.

(b) NATIONAL AWARENESS ACTIVITIES.—The Secretary of Education shall, in conjunction with the Federal Trade Commission,

maintain a scholarship fraud awareness site on the Internet web

site of the Department of Education. The scholarship fraud awareness site may include the following:

(1) Appropriate materials from the Project Scholarscam

awareness campaign of the Commission, including examples

of common fraudulent schemes.

(2) A list of companies and individuals who have been

convicted of scholarship fraud in Federal or State court.

(3) An Internet-based message board to provide a forum

for public complaints and experiences with scholarship fraud.

Internet.

Deadline.

20 USC 1092d.

28 USC 994 note.

PUBLIC LAW 106–420—NOV. 1, 2000 114 STAT. 1869

LEGISLATIVE HISTORY—S. 1455:

CONGRESSIONAL RECORD:

Vol. 145 (1999): Nov. 4, considered and passed Senate.

Vol. 146 (2000): Sept. 25, considered and passed House.

Æ

(4) An electronic comment form for individuals who have

experienced scholarship fraud or have questions about scholarship fraud, with appropriate mechanisms for the transfer of

comments received through such forms to the Department and

the Commission.

(5) Internet links to other sources of information on scholarship fraud, including Internet web sites of appropriate nongovernmental organizations, colleges and universities, and

government agencies.

(6) An Internet link to the Better Business Bureau in

order to assist individuals in assessing the business practices

of other persons and entities.

(7) Information on means of communicating with the Federal Student Aid Information Center, including telephone and

Internet contact information.

Approved November 1, 2000.