II 

113TH CONGRESS 

2D SESSION S. 1904 

To amend the eligibility requirements for funding under title IV of the 

Higher Education Act of 1965. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 9, 2014 

Mr. LEE introduced the following bill; which was read twice and referred to 

the Committee on Health, Education, Labor, and Pensions 

A BILL 

To amend the eligibility requirements for funding under title 

IV of the Higher Education Act of 1965. 

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 ‘‘Higher Education Re5 form and Opportunity Act of 2013’’. 

6 SEC. 2. AMENDMENTS TO THE HIGHER EDUCATION ACT. 

7 (a) DEFINITION OF INSTITUTION OF HIGHER EDU8 CATION.—Section 102(a) of the Higher Education Act of 

9 1965 (20 U.S.C. 1002(a)) is amended— 


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1 (1) by redesignating paragraphs (5) and (6) as 

2 paragraphs (6) and (7), respectively; 

3 (2) in paragraph (1), in the matter preceding 

4 subparagraph (A), by striking ‘‘Subject to para5 graphs (2) through (4)’’ and inserting ‘‘Subject to 

6 paragraphs (2) through (5)’’; 

7 (3) in paragraph (1)— 

8 (A) by redesignating subparagraphs (B) 

9 and (C) as subparagraphs (C) and (D), respec10 tively; and 

11 (B) by inserting after subparagraph (A) 

12 the following: 

13 ‘‘(B) if accredited by an authorized accred14 itation authority in a State that has an alter15 native accreditation agreement with the Sec16 retary, as described in paragraph (5)— 

17 ‘‘(i) an institution that provides post18 secondary education; 

19 ‘‘(ii) a postsecondary apprenticeship 

20 program; or 

21 ‘‘(iii) a postsecondary education 

22 course or program provided by an institu23 tion of postsecondary education, a non24 profit organization, or a for-profit organi25 zation or business;’’; and 


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1 (4) by inserting after paragraph (4), the fol2 lowing: 

3 ‘‘(5) STATE ALTERNATIVE ACCREDITATION.— 

4 ‘‘(A) IN GENERAL.—Notwithstanding any 

5 other provision of law, a State may establish an 

6 alternative accreditation system for the purpose 

7 of establishing institutions that provide postsec8 ondary education and postsecondary education 

9 courses or programs as eligible for funding 

10 under title IV if the State enters into an agree11 ment with the Secretary for the establishment 

12 of the alternative accreditation system. Such in13 stitutions, courses, or programs may include— 

14 ‘‘(i) institutions that provide postsec15 ondary education; 

16 ‘‘(ii) postsecondary apprenticeship 

17 programs; 

18 ‘‘(iii) any other postsecondary edu19 cation course or program offered at an in20 stitution of postsecondary education, a 

21 nonprofit organization, or a for-profit orga22 nization or business; and 

23 ‘‘(iv) any of the entities described in 

24 clauses (i) through (iii) that do not award 

25 a postsecondary certification, credential, or 


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1 degree, provided that such entity provides 

2 credit that will apply toward a postsec3 ondary certification, credential, or degree. 

4 ‘‘(B) ALTERNATIVE ACCREDITATION

5 AGREEMENT.—The alternative accreditation 

6 agreement described in subparagraph (A) shall 

7 include the following: 

8 ‘‘(i) The designation of one or more 

9 authorized accrediting entities within the 

10 State, such as the State Department of 

11 Education, another State agency, an indus12 try-specific accrediting agency, or another 

13 entity, and an explanation of the process 

14 through which the State will select such 

15 authorized accrediting entities. 

16 ‘‘(ii) The standards or criteria that an 

17 institution that provides postsecondary 

18 education and a postsecondary education 

19 course or program must meet in order to— 

20 ‘‘(I) receive an initial accredita21 tion as part of the alternative accredi22 tation system; and 

23 ‘‘(II) maintain such accredita24 tion. 


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1 ‘‘(iii) A description of the appeals 

2 process through which an institution that 

3 provides postsecondary education and a 

4 postsecondary education course or program 

5 may appeal to an authorized accrediting 

6 entity if such institution, course, or pro7 gram is denied accreditation under the 

8 State alternative accreditation system. 

9 ‘‘(iv) Each authorized accrediting en10 tity’s policy regarding the transfer of cred11 its between institutions that provide post12 secondary education and postsecondary 

13 education courses or programs within the 

14 State that are accredited as part of the al15 ternative accreditation system. 

16 ‘‘(v) The Secretary’s reporting re17 quirements for the State regarding the 

18 State alternative accreditation system, in19 cluding— 

20 ‘‘(I) the contents of reports that 

21 must be submitted to the Secretary, 

22 which may include information such 

23 as— 

24 ‘‘(aa) in the case of a post25 secondary education course or 


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1 program that is accredited 

2 through the State alternative ac3 creditation system— 

4 ‘‘(AA) the number and 

5 percentage of students who 

6 successfully complete each 

7 such postsecondary edu8 cation course or program; 

9 and 

10 ‘‘(BB) the number and 

11 percentage of students who 

12 successfully obtain a post13 secondary certification, cre14 dential, or degree using 

15 credit obtained from each 

16 such postsecondary edu17 cation course or program; 

18 and 

19 ‘‘(bb) in the case of an insti20 tution that provides postsec21 ondary education that is accred22 ited through the State alternative 

23 accreditation system— 

24 ‘‘(AA) the number and 

25 percentage of students who 


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1 successfully obtain a post2 secondary certification, cre3 dential, or degree from such 

4 institution; and 

5 ‘‘(BB) the number and 

6 percentage of students who 

7 do not successfully obtain a 

8 postsecondary certification, 

9 credential, or degree from 

10 such institution but do ob11 tain credit from such insti12 tution toward a postsec13 ondary degree, credential, or 

14 certification; 

15 ‘‘(II) the frequency with which 

16 such reports must be submitted to the 

17 Secretary; and 

18 ‘‘(III) any requirements for third 

19 party verification of information con20 tained in such reports. 

21 ‘‘(vi) The State policy regarding pub22 lic accessibility to certain information re23 lating to institutions that provide postsec24 ondary education and postsecondary edu25 cation courses and programs accredited 


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1 under the State alternative accreditation 

2 system, including— 

3 ‘‘(I) the information described in 

4 subclause (I) of clause (v); and 

5 ‘‘(II) information about the rates 

6 of job placement for individuals that 

7 have graduated from an institution or 

8 completed a course or program that is 

9 accredited under the State alternative 

10 accreditation system. 

11 ‘‘(vii) An assurance by the State that 

12 under the State alternative accreditation 

13 system, only institutions that provide post14 secondary education and postsecondary 

15 education courses or programs that provide 

16 credits toward a postsecondary certifi17 cation, credential, or degree (as defined by 

18 the State in accordance with clause (viii)) 

19 will be accredited. 

20 ‘‘(viii) The State’s definition of a 

21 postsecondary certification, credential, or 

22 degree, as such term applies to the require23 ment described in clause (vii). 

24 ‘‘(ix) A description of the agreements 

25 that the State will enter into with instituVerDate Mar 15 2010 03:05 Jan 10, 2014 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1904.IS S1904

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1 tions that provide postsecondary education 

2 and postsecondary education courses or 

3 programs that are accredited under the al4 ternative accreditation system to enable 

5 such institutions, courses, or programs to 

6 be eligible under a program authorized 

7 under title IV, for participation in the di8 rect student loan program, and for the 

9 origination of loans under part D of title 

10 IV, and how such agreements will operate 

11 in lieu of the agreements described in sec12 tions 487 and 454. 

13 ‘‘(x) A description of how the State 

14 will select institutions that provide postsec15 ondary education and postsecondary edu16 cation courses or programs that are ac17 credited under the alternative accreditation 

18 system, in lieu of the selection process de19 scribed in section 453, for— 

20 ‘‘(I) participation in the direct 

21 student loan program under part D of 

22 title IV; and 

23 ‘‘(II) approval allowing such in24 stitution, program, or course to origiVerDate Mar 15 2010 03:05 Jan 10, 2014 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1904.IS S1904

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1 nate direct loans under part D of title 

2 IV. 

3 ‘‘(xi) A description of how the State 

4 will administer title IV funds for institu5 tions that provide postsecondary education, 

6 postsecondary apprenticeship programs, 

7 and postsecondary education courses or 

8 programs provided by an institution of 

9 postsecondary education, a nonprofit orga10 nization, or a for-profit organization or 

11 business that are accredited through the 

12 alternative accreditation system. 

13 ‘‘(C) ADMINISTRATIVE COSTS FOR PELL

14 GRANT STUDENTS.— 

15 ‘‘(i) PELL GRANTS ADMINISTERED BY

16 ENTITIES.—In the case of an institution 

17 that provides postsecondary education, a 

18 postsecondary apprenticeship program, or 

19 an entity that provides a postsecondary 

20 education course or program that is ac21 credited through the alternative accredita22 tion system and that will administer the 

23 Federal Pell Grant, Federal Perkins Loan, 

24 Federal Work-Study, and Federal Supple25 mental Educational Opportunity Grants in 


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1 accordance with the agreement described 

2 in subparagraph (B)(xi), the Secretary 

3 shall, in lieu of carrying out section 690.10 

4 of title 34, Code of Federal Regulations, 

5 and subject to available appropriations, 

6 pay $5.00 to the institution, apprenticeship 

7 program, or entity, as the case may be, for 

8 each student who receives a Federal Pell 

9 Grant at that institution, apprenticeship 

10 program, or entity for an award year. 

11 ‘‘(ii) PELL GRANTS ADMINISTERED BY

12 STATES.—In the case of an institution that 

13 provides postsecondary education, a post14 secondary apprenticeship program, or an 

15 entity that provides a postsecondary edu16 cation course or program that is accredited 

17 through the alternative accreditation sys18 tem and will not administer the Federal 

19 Pell Grant, Federal Perkins Loan, Federal 

20 Work-Study, and Federal Supplemental 

21 Educational Opportunity Grants, but will 

22 have such programs administered by the 

23 State in accordance with the agreement de24 scribed in subparagraph (B)(xi), the Sec25 retary shall, in lieu of carrying out section 


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1 690.10 of title 34, Code of Federal Regula2 tions, and subject to available appropria3 tions, pay $5.00 to the State for each stu4 dent who receives a Federal Pell Grant at 

5 that institution, apprenticeship program, 

6 or entity, as the case may be, for an award 

7 year. 

8 ‘‘(iii) USE OF FUNDS.—All funds that 

9 an institution, apprenticeship program, en10 tity, or the State receives under this sub11 paragraph shall be used solely to pay the 

12 cost of— 

13 ‘‘(I) administering the Federal 

14 Pell Grant, Federal Perkins Loan, 

15 Federal Work-Study, and Federal 

16 Supplemental Educational Oppor17 tunity Grants; and 

18 ‘‘(II) carrying out the reporting 

19 requirements described under sub20 paragraph (B)(v). 

21 ‘‘(iv) FINANCIAL AID SERVICES.—If 

22 an institution, apprenticeship program, or 

23 entity described in this subparagraph en24 rolls a significant number of students who 

25 are attending less-than-full-time or are 


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1 independent students, such institution, ap2 prenticeship program, entity, or the State, 

3 as the case may be, shall use a reasonable 

4 proportion of the funds provided under this 

5 subparagraph to make financial aid serv6 ices available during times and in places 

7 that will most effectively accommodate the 

8 needs of those students.’’. 

9 (b) TITLE IV ELIGIBILITY REQUIREMENTS.—Part G 

10 of title IV of the Higher Education Act of 1965 (20 U.S.C. 

11 1088 et seq.) is amended by adding at the end the fol12 lowing: 

13 ‘‘SEC. 493E. STATE ACCREDITED INSTITUTIONS, PRO14 GRAMS, OR COURSES. 

15 ‘‘Notwithstanding any other provision of law, an in16 stitution, program, or course that is eligible for funds 

17 under this title in accordance with section 102(a)(1)(B) 

18 and meets the requirements of section 102(a)(5) shall not 

19 be required to meet any other requirements of this title. 

20 For purposes of this title, such an institution, program, 

21 or course shall be deemed to be an eligible institution that 

22 meets the requirements of section 487.’’. 

Æ 


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