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[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 1659 Introduced in Senate (IS)]

113th CONGRESS
  1st Session
                                S. 1659

    To amend the Higher Education Act of 1965 regarding proprietary 
   institutions of higher education in order to protect students and 
                               taxpayers.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                            November 6, 2013

Mr. Durbin (for himself and Mr. Harkin) 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 regarding proprietary 
   institutions of higher education in order to protect students and 
                               taxpayers.

    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 ``Protecting Our Students and 
Taxpayers Act of 2013'' or ``POST Act of 2013''.

SEC. 2. 85/15 RULE.

    (a) In General.--Section 102(b) of the Higher Education Act of 1965 
(20 U.S.C. 1002(b)) is amended--
            (1) in paragraph (1)--
                    (A) in subparagraph (D), by striking ``and'' after 
                the semicolon;
                    (B) in subparagraph (E), by striking the period and 
                inserting ``; and''; and
                    (C) by adding at the end the following:
                    ``(F) meets the requirements of paragraph (2).'';
            (2) by redesignating paragraph (2) as paragraph (3); and
            (3) by inserting after paragraph (1) the following:
            ``(2) Revenue sources.--
                    ``(A) In general.--In order to qualify as a 
                proprietary institution of higher education under this 
                subsection, an institution shall derive not less than 
                15 percent of the institution's revenues from sources 
                other than Federal funds, as calculated in accordance 
                with subparagraphs (B) and (C).
                    ``(B) Federal funds.--In this paragraph, the term 
                `Federal funds' means any Federal financial assistance 
                provided, under this Act or any other Federal law, 
                through a grant, contract, subsidy, loan, guarantee, 
                insurance, or other means to a proprietary institution, 
                including Federal financial assistance that is 
                disbursed or delivered to an institution or on behalf 
                of a student or to a student to be used to attend the 
                institution, except that such term shall not include 
                any monthly housing stipend provided under the Post-9/
                11 Veterans Educational Assistance Program under 
                chapter 33 of title 38, United States Code.
                    ``(C) Implementation of non-federal revenue 
                requirement.--In making calculations under subparagraph 
                (A), an institution of higher education shall--
                            ``(i) use the cash basis of accounting;
                            ``(ii) consider as revenue only those funds 
                        generated by the institution from--
                                    ``(I) tuition, fees, and other 
                                institutional charges for students 
                                enrolled in programs eligible for 
                                assistance under title IV;
                                    ``(II) activities conducted by the 
                                institution that are necessary for the 
                                education and training of the 
                                institution's students, if such 
                                activities are--
                                            ``(aa) conducted on campus 
                                        or at a facility under the 
                                        control of the institution;
                                            ``(bb) performed under the 
                                        supervision of a member of the 
                                        institution's faculty; and
                                            ``(cc) required to be 
                                        performed by all students in a 
                                        specific educational program at 
                                        the institution; and
                                    ``(III) a contractual arrangement 
                                with a Federal agency for the purpose 
                                of providing job training to low-income 
                                individuals who are in need of such 
                                training;
                            ``(iii) presume that any Federal funds that 
                        are disbursed or delivered to an institution on 
                        behalf of a student or directly to a student 
                        will be used to pay the student's tuition, 
                        fees, or other institutional charges, 
                        regardless of whether the institution credits 
                        such funds to the student's account or pays 
                        such funds directly to the student, except to 
                        the extent that the student's tuition, fees, or 
                        other institutional charges are satisfied by--
                                    ``(I) grant funds provided by an 
                                outside source that--
                                            ``(aa) has no affiliation 
                                        with the institution; and
                                            ``(bb) shares no employees 
                                        with the institution; and
                                    ``(II) institutional scholarships 
                                described in clause (v);
                            ``(iv) include no loans made by an 
                        institution of higher education as revenue to 
                        the school, except for payments made by 
                        students on such loans;
                            ``(v) include a scholarship provided by the 
                        institution--
                                    ``(I) only if the scholarship is in 
                                the form of monetary aid based upon the 
                                academic achievements or financial need 
                                of students, disbursed to qualified 
                                student recipients during each fiscal 
                                year from an established restricted 
                                account; and
                                    ``(II) only to the extent that 
                                funds in that account represent 
                                designated funds, or income earned on 
                                such funds, from an outside source 
                                that--
                                            ``(aa) has no affiliation 
                                        with the institution; and
                                            ``(bb) shares no employees 
                                        with the institution; and
                            ``(vi) exclude from revenues--
                                    ``(I) the amount of funds the 
                                institution received under part C of 
                                title IV, unless the institution used 
                                those funds to pay a student's 
                                institutional charges;
                                    ``(II) the amount of funds the 
                                institution received under subpart 4 of 
                                part A of title IV;
                                    ``(III) the amount of funds 
                                provided by the institution as matching 
                                funds for any Federal program;
                                    ``(IV) the amount of Federal funds 
                                provided to the institution to pay 
                                institutional charges for a student 
                                that were refunded or returned; and
                                    ``(V) the amount charged for books, 
                                supplies, and equipment, unless the 
                                institution includes that amount as 
                                tuition, fees, or other institutional 
                                charges.
                    ``(D) Report to congress.--Not later than July 1, 
                2014, and by July 1 of each succeeding year, the 
                Secretary shall submit to the authorizing committees a 
                report that contains, for each proprietary institution 
                of higher education that receives assistance under 
                title IV and as provided in the audited financial 
                statements submitted to the Secretary by each 
                institution pursuant to the requirements of section 
                487(c)--
                            ``(i) the amount and percentage of such 
                        institution's revenues received from Federal 
                        funds; and
                            ``(ii) the amount and percentage of such 
                        institution's revenues received from other 
                        sources.''.
    (b) Repeal of Existing Requirements.--Section 487 of the Higher 
Education Act of 1965 (20 U.S.C. 1094) is amended--
            (1) in subsection (a)--
                    (A) by striking paragraph (24);
                    (B) by redesignating paragraphs (25) through (29) 
                as paragraphs (24) through (28), respectively;
                    (C) in paragraph (24)(A)(ii) (as redesignated by 
                subparagraph (B)), by striking ``subsection (e)'' and 
                inserting ``subsection (d)''; and
                    (D) in paragraph (26) (as redesignated by 
                subparagraph (B)), by striking ``subsection (h)'' and 
                inserting ``subsection (g)'';
            (2) by striking subsection (d);
            (3) by redesignating subsections (e) through (j) as 
        subsections (d) through (i), respectively;
            (4) in subsection (f)(1) (as redesignated by paragraph 
        (3)), by striking ``subsection (e)(2)'' and inserting 
        ``subsection (d)(2)''; and
            (5) in subsection (g)(1) (as redesignated by paragraph 
        (3)), by striking ``subsection (a)(27)'' in the matter 
        preceding subparagraph (A) and inserting ``subsection 
        (a)(26)''.
    (c) Conforming Amendments.--The Higher Education Act of 1965 (20 
U.S.C. 1001 et seq.) is amended--
            (1) in section 152 (20 U.S.C. 1019a)--
                    (A) in subsection (a)(1)(A), by striking 
                ``subsections (a)(27) and (h) of section 487'' and 
                inserting ``subsections (a)(26) and (g) of section 
                487''; and
                    (B) in subsection (b)(1)(B)(i)(I), by striking 
                ``section 487(e)'' and inserting ``section 487(d)'';
            (2) in section 153(c)(3) (20 U.S.C. 1019b(c)(3)), by 
        striking ``section 487(a)(25)'' each place the term appears and 
        inserting ``section 487(a)(24)'';
            (3) in section 496(c)(3)(A) (20 U.S.C. 1099b(c)(3)(A)), by 
        striking ``section 487(f)'' and inserting ``section 487(e)''; 
        and
            (4) in section 498(k)(1) (20 U.S.C. 1099c(k)(1)), by 
        striking ``section 487(f)'' and inserting ``section 487(e)''.
                                 <all>
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