IIB 

113TH CONGRESS 

2D SESSION H. R. 3136 

IN THE SENATE OF THE UNITED STATES 

JULY 24, 2014 

Received; read twice and referred to the Committee on Health, Education, 

Labor, and Pensions 

AN ACT 

To establish a demonstration program for competency-based 

education. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Advancing Com3 petency-Based Education Demonstration Project Act of 

4 2014’’. 

5 SEC. 2. COMPETENCY-BASED EDUCATION DEMONSTRATION 

6 PROJECTS. 

7 (a) PROJECTS.—Part G of title IV of the Higher 

8 Education Act of 1965 (20 U.S.C. 1088 et seq.) is amend9 ed by inserting after section 486A the following: 

10 ‘‘SEC. 486B. COMPETENCY-BASED EDUCATION DEMONSTRA11 TION PROJECTS. 

12 ‘‘(a) DEMONSTRATION PROJECTS AUTHORIZED.— 

13 The Secretary shall select, in accordance with subsection 

14 (c), eligible entities to voluntarily carry out competency15 based education demonstration projects and receive waiv16 ers described in subsection (d) to carry out such projects. 

17 ‘‘(b) APPLICATION.— 

18 ‘‘(1) IN GENERAL.—Each eligible entity desir19 ing to carry out a demonstration project under this 

20 section shall submit an application to the Secretary, 

21 at such time and in such manner as the Secretary 

22 may require. 

23 ‘‘(2) OUTREACH.—The Secretary shall, prior to 

24 any deadline to submit applications under paragraph 

25 (1), conduct outreach to historically Black colleges 

26 and universities, Hispanic-serving institutions, NaVerDate Mar 15 2010 01:07 Jul 25, 2014 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3136.RFS H3136

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1 tive American-serving, nontribal institutions, institu2 tions serving students with special needs, and insti3 tutions located in rural areas to provide those insti4 tutions with information on the opportunity to apply 

5 to carry out a demonstration project under this sec6 tion. 

7 ‘‘(3) AMENDMENTS.— 

8 ‘‘(A) IN GENERAL.—An eligible entity that 

9 has been selected to carry out a demonstration 

10 project under this section may submit to the 

11 Secretary amendments to the eligible entity’s 

12 approved application under paragraph (1), at 

13 such time and in such manner as the Secretary 

14 may require, which the Secretary shall approve 

15 or deny within 15 days of receipt. 

16 ‘‘(B) EXPANDING ENROLLMENT.—Not17 withstanding the assurance required with re18 spect to maximum enrollment under paragraph 

19 (3)(H)— 

20 ‘‘(i) an eligible entity whose dem21 onstration project has been evaluated 

22 under subsection (f)(2) not less than twice 

23 may submit to the Secretary an amend24 ment to the eligible entity’s application 

25 under paragraph (1) to increase enrollment 


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1 in the project to more than 3,000 students, 

2 but not more than 5,000 students, and 

3 which shall specify— 

4 ‘‘(I) the proposed maximum en5 rollment or annual enrollment growth 

6 for the project; 

7 ‘‘(II) how the eligible entity will 

8 successfully carry out the project with 

9 such maximum enrollment or enroll10 ment growth; and 

11 ‘‘(III) any other amendments to 

12 the eligible entity’s application under 

13 paragraph (1) that are related to such 

14 maximum enrollment or enrollment 

15 growth; and 

16 ‘‘(ii) the Secretary shall determine 

17 whether to approve or deny an amendment 

18 submitted under clause (i) for a dem19 onstration project based on the project’s 

20 evaluations under subsection (f)(2). 

21 ‘‘(4) CONTENTS.—Each application shall in22 clude— 

23 ‘‘(A) a description of the competency-based 

24 education to be offered by the eligible entity 

25 under the demonstration project; 


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1 ‘‘(B) a description of the proposed aca2 demic delivery, business, and financial models 

3 for the demonstration project, including expla4 nations of how competency-based education of5 fered under the demonstration project would— 

6 ‘‘(i) result in the achievement of com7 petencies; 

8 ‘‘(ii) differ from standard credit hour 

9 approaches, in whole or in part; and 

10 ‘‘(iii) result in lower costs or short11 ened time to degree, certificate, or creden12 tial completion; 

13 ‘‘(C) a description of how the competency14 based education offered under the demonstra15 tion project will progress a student toward com16 pletion of a degree, certificate, or credential; 

17 ‘‘(D) a description of how the eligible enti18 ty will articulate the transcript from the com19 petency-based education demonstration project 

20 to another program within an institution of 

21 higher education that is part of the eligible enti22 ty or to another institution of higher education; 

23 ‘‘(E) a description of the statutory and 

24 regulatory requirements described in subsection 

25 (d) for which the eligible entity is seeking a 


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1 waiver, and why such waiver is necessary to 

2 carry out the demonstration project; 

3 ‘‘(F) a description of how the eligible enti4 ty will develop and evaluate the competencies 

5 and assessments of student knowledge (which 

6 may include prior-learning assessments) admin7 istered as part of the demonstration project, in8 cluding how such competencies and assessments 

9 are aligned with workforce needs; 

10 ‘‘(G) a description of the proposal for de11 termining a student’s Federal student aid eligi12 bility under this title for participating in the 

13 demonstration project, the award and distribu14 tion of such aid, and safeguards to ensure that 

15 students are making satisfactory progress that 

16 warrants disbursement of such aid; 

17 ‘‘(H) a description of the students to 

18 whom competency-based education will be of19 fered, including an assurance that the dem20 onstration project will enroll a minimum of 50 

21 and a maximum of 3,000 students; 

22 ‘‘(I) an assurance that students partici23 pating in the demonstration project will not be 

24 eligible for more Federal assistance under this 


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1 title than such students would have been eligi2 ble for under a traditional program; 

3 ‘‘(J) an assurance the eligible entity will 

4 identify and disseminate best practices with re5 spect to the demonstration project to other eli6 gible entities carrying out a demonstration 

7 project under this section; and 

8 ‘‘(K) A description of the population of 

9 students served by the eligible entity that are 

10 veterans or members of the Armed Forces and 

11 how such eligible entity will, when appropriate, 

12 incorporate the specific needs of such popu13 lation when carrying out the demonstration 

14 project. 

15 ‘‘(c) SELECTION.— 

16 ‘‘(1) IN GENERAL.—Not later than 6 months 

17 after the date of enactment of this section, the Sec18 retary shall select not more than 30 eligible entities 

19 to carry out a competency-based education dem20 onstration project under this section. 

21 ‘‘(2) CONSIDERATIONS.—In selecting eligible 

22 entities under paragraph (1), the Secretary shall— 

23 ‘‘(A) prioritize projects which show prom24 ise in reducing the time or cost required to 

25 complete a degree, certificate, or credential; 


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1 ‘‘(B) consider the number and quality of 

2 applications received; 

3 ‘‘(C) consider an eligible entity’s— 

4 ‘‘(i) ability to successfully execute the 

5 demonstration project as described in the 

6 eligible entity’s application under sub7 section (b); 

8 ‘‘(ii) commitment and ability to effec9 tively finance the demonstration project; 

10 ‘‘(iii) ability to provide administrative 

11 capability and the expertise to evaluate 

12 student progress based on measures other 

13 than credit hours or clock hours; and 

14 ‘‘(iv) commitment to work with the 

15 Secretary to evaluate the demonstration 

16 project and the impact of the demonstra17 tion project; 

18 ‘‘(D) ensure the selection of a diverse 

19 group of eligible entities with respect to size, 

20 mission, and geographic distribution of the eli21 gible entities; 

22 ‘‘(E) not limit the types of programs of 

23 study or courses of study approved for partici24 pation in a demonstration project; and 


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1 ‘‘(F) not select an eligible entity that has 

2 had, for 1 of the preceding 2 fiscal years— 

3 ‘‘(i) a cohort default rate (defined in 

4 section 435(m)) that is 30 percent or 

5 greater; and 

6 ‘‘(ii) a borrowing rate of loans under 

7 this title of more than 50 percent of the 

8 students enrolled at institutions of higher 

9 education of the eligible entity. 

10 ‘‘(d) WAIVERS.—The Secretary may waive for any el11 igible entity selected to carry out a demonstration project 

12 under this section any requirements of the following provi13 sions of law (including any regulations promulgated under 

14 such provisions) or regulations and for which the eligible 

15 entity has provided a reason for waiving under subsection 

16 (b)(3)(E): 

17 ‘‘(1) Subparagraphs (A) and (B) of section 

18 102(a)(3). 

19 ‘‘(2) Subsections (a) and (b) of section 481, as 

20 such subsections relate to requirements for a min21 imum number of weeks of instruction. 

22 ‘‘(3) Section 484(l)(1). 

23 ‘‘(4) Section 668.32(a)(1)(iii) of title 34, Code 

24 of Federal Regulations. 


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1 ‘‘(5) Any of the requirements under provisions 

2 in title I, part F of this title, or this part, that in3 hibit the operation of competency-based education, 

4 including requirements with respect to— 

5 ‘‘(A) documenting attendance; 

6 ‘‘(B) weekly academic activity; 

7 ‘‘(C) minimum weeks of instructional time; 

8 ‘‘(D) requirements for credit hour or clock 

9 hour equivalencies; 

10 ‘‘(E) requirements for substantive inter11 action with faculty; and 

12 ‘‘(F) definitions of the terms ‘academic 

13 year’, ‘full-time student’, ‘term’ (including 

14 ‘standard term’, ‘non-term’, and ‘non-standard 

15 term’), ‘satisfactory academic progress’, ‘edu16 cational activity’, ‘project of study’, and ‘pay17 ment period’. 

18 ‘‘(e) NOTIFICATION.—Not later than 6 months after 

19 the date of enactment of this section, the Secretary shall 

20 make available to the authorizing committees and the pub21 lic a list of eligible entities selected to carry out a dem22 onstration project under this section, which shall include 

23 for each such eligible entity— 

24 ‘‘(1) the specific statutory and regulatory re25 quirements being waived under subsection (d); and 


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1 ‘‘(2) a description of the competency-based edu2 cation programs of study or courses of study to be 

3 offered under the project. 

4 ‘‘(f) INFORMATION AND EVALUATION.— 

5 ‘‘(1) INFORMATION.— 

6 ‘‘(A) IN GENERAL.—Each eligible entity 

7 that carries out a demonstration project under 

8 this section shall provide to the Director of the 

9 Institute of Education Sciences with respect to 

10 the students participating in the competency11 based education project carried out by the eligi12 ble entity the following information: 

13 ‘‘(i) The average number of credit 

14 hours the students earned prior to enroll15 ment in the demonstration project, if appli16 cable. 

17 ‘‘(ii) The number and percentage of 

18 students participating in the demonstration 

19 project that are also enrolled in programs 

20 of study or courses of study offered in 

21 credit hours or clock hours, disaggregated 

22 by student status as a first-year, second23 year, third-year, fourth-year, or other stu24 dent. 


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1 ‘‘(iii) The average period of time be2 tween the enrollment of a student in the 

3 demonstration project and the first assess4 ment of student knowledge of such stu5 dent. 

6 ‘‘(iv) The average time to 25 percent, 

7 50 percent, 75 percent, and 100 percent of 

8 the completion of a degree, certificate, or 

9 credential by a student who participated in 

10 the demonstration project. 

11 ‘‘(v) The percentage of assessments of 

12 student knowledge that students passed on 

13 the first attempt, during the period of the 

14 participation in the demonstration project 

15 by the students. 

16 ‘‘(vi) The percentage of assessments 

17 of student knowledge that students passed 

18 on the second attempt and the average pe19 riod of time between the first and second 

20 attempts by students, during the period of 

21 the participation in the demonstration 

22 project by the students. 

23 ‘‘(vii) The average number of com24 petencies a student acquired while partici25 pating in the demonstration project and 


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1 the period of time during which the stu2 dent acquired such competencies. 

3 ‘‘(viii) Such other information as the 

4 Director may reasonably require. 

5 ‘‘(B) EMPLOYMENT DATA.— 

6 ‘‘(i) IN GENERAL.—Each eligible enti7 ty that carries out a demonstration project 

8 under this section may provide to the Di9 rector of the Institute of Education 

10 Sciences with respect to the students par11 ticipating in the competency-based edu12 cation project carried out by the eligible 

13 entity the number and percentage of stu14 dents completing a competency-based edu15 cation program or course of study offered 

16 by such eligible entity who find employ17 ment in a field related to the program or 

18 course of study of such students. 

19 ‘‘(ii) TECHNICAL ASSISTANCE.—The 

20 Director of the Institute of Education 

21 Sciences shall, at the request of an eligible 

22 entity, provide technical assistance to such 

23 eligible entity to assist such eligible entity 

24 in collecting and reporting accurate infor25 mation relating to the employment of stuVerDate Mar 15 2010 01:07 Jul 25, 2014 Jkt 039200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\H3136.RFS H3136

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1 dents participating in a competency-based 

2 education project carried out by such eligi3 ble entity. 

4 ‘‘(C) DISAGGREGATION.—Each eligible en5 tity shall provide the information required 

6 under subparagraph (A) disaggregated by age, 

7 race, gender, disability status, and status as a 

8 recipient of a Federal Pell Grant, provided that 

9 the disaggregation of the information does not 

10 identify any individual student participating in 

11 the demonstration project. 

12 ‘‘(2) EVALUATION.—The Director of the Insti13 tute of Education Sciences, in consultation with the 

14 Secretary, shall annually evaluate each demonstra15 tion project under this section. Each evaluation shall 

16 include— 

17 ‘‘(A) the extent to which the eligible entity 

18 has met the goals set forth in its application to 

19 the Secretary; 

20 ‘‘(B) the number and types of students 

21 participating in the competency-based education 

22 offered under the project, including the 

23 progress of participating students toward com24 pletion of a degree, certificate, or credential, 


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1 and the extent to which participation and reten2 tion in such project increased; 

3 ‘‘(C) whether the project led to reduced 

4 cost or time to completion of a degree, certifi5 cate, or credential, and the amount of cost or 

6 time reduced for such completion; 

7 ‘‘(D) obstacles related to student financial 

8 assistance for competency-based education; 

9 ‘‘(E) the extent to which statutory or regu10 latory requirements not waived under sub11 section (d) present difficulties for students or 

12 institutions of higher education; 

13 ‘‘(F) degree, certificate, or credential com14 pletion rates; 

15 ‘‘(G) retention rates; 

16 ‘‘(H) total cost and net cost to the student 

17 of the competency-based education offered 

18 under the project; 

19 ‘‘(I) a description of the assessments of 

20 student knowledge and the corresponding com21 petencies; and 

22 ‘‘(J) outcomes of the assessments of stu23 dent knowledge. 


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1 ‘‘(3) ANNUAL REPORT.—The Director of the 

2 Institute of Education Sciences shall annually pro3 vide to the authorizing committees a report on— 

4 ‘‘(A) the evaluations of the demonstration 

5 projects required under paragraph (2); 

6 ‘‘(B) the number and types of students re7 ceiving assistance under this title for com8 petency-based education under such projects; 

9 ‘‘(C) the retention and completion rates of 

10 students participating in such projects; 

11 ‘‘(D) any proposed statutory or regulatory 

12 changes designed to support and enhance the 

13 expansion of competency-based education, which 

14 may be independent of or combined with tradi15 tional credit hour or clock hour projects; 

16 ‘‘(E) the most effective means of delivering 

17 competency-based education through dem18 onstration projects; and 

19 ‘‘(F) the appropriate level and distribution 

20 methodology of Federal assistance under this 

21 title for students enrolled in competency-based 

22 education. 

23 ‘‘(g) OVERSIGHT.—In carrying out this section, the 

24 Secretary shall, on a continuing basis— 


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1 ‘‘(1) assure compliance of eligible entities with 

2 the requirements of this title (other than the provi3 sions of law and regulations that are waived under 

4 subsection (d)); 

5 ‘‘(2) provide technical assistance; 

6 ‘‘(3) monitor fluctuations in the student popu7 lation enrolled in the eligible entities carrying out 

8 the demonstration projects under this section; 

9 ‘‘(4) consult with appropriate accrediting agen10 cies or associations and appropriate State regulatory 

11 authorities for additional ways of improving the de12 livery of competency-based education; and 

13 ‘‘(5) collect and disseminate to eligible entities 

14 carrying out a demonstration project under this sec15 tion, best practices with respect to demonstration 

16 projects under this section. 

17 ‘‘(h) DISCLOSURE OF AUTHORIZATION TO SELL STU18 DENT DATA.—An eligible entity carrying out a demonstra19 tion project under this section shall ensure that each insti20 tution of higher education of the eligible entity provides 

21 to each student, or the parents of each minor student, en22 rolled in the institution of higher education— 

23 ‘‘(1) a disclosure letter, which describes the per24 sonally identifiable information of the student that 

25 may be sold by a person with whom the institution 


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1 of higher education has an agreement to provide 

2 software applications for students; and 

3 ‘‘(2) an option to opt-out of such personally 

4 identifiable information from being sold. 

5 ‘‘(i) DEFINITIONS.—For the purpose of this section: 

6 ‘‘(1) COMPETENCY-BASED EDUCATION.—The 

7 term ‘competency-based education’ means an edu8 cational process or program that measures knowl9 edge, skills, and experience through assessments of 

10 such knowledge, skills, or experience in place of or 

11 in addition to the use of credit hours or clock hours. 

12 ‘‘(2) ELIGIBLE ENTITY.—The term ‘eligible en13 tity’ means— 

14 ‘‘(A) an institution of higher education in15 cluding an institution of higher education that 

16 offers a dual-enrollment program under which a 

17 secondary school student is able simultaneously 

18 to earn credit toward a secondary school di19 ploma and a postsecondary degree, certificate, 

20 or credential; 

21 ‘‘(B) a system of institutions of higher 

22 education; or 

23 ‘‘(C) a consortium of institutions of higher 

24 education. 


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1 ‘‘(3) INSTITUTION OF HIGHER EDUCATION.— 

2 The term ‘institution of higher education’ has the 

3 meaning given the term in section 102, except that 

4 such term does not include institutions described in 

5 section 102(a)(1)(C).’’. 

6 (b) RULE OF CONSTRUCTION.—Nothing in this Act 

7 or the amendments made by this Act shall be construed 

8 to alter the authority of the Secretary of Education to es9 tablish experimental sites under any other provision of 

10 law. 

11 (c) REPORT.—The Secretary of Education shall re12 port to Congress, every 10 years, on the needs of limited 

13 English proficient students using the Free Application for 

14 Federal Student Aid. 

15 (d) FUNDING.— 

16 (1) USE OF EXISTING FUNDS.—Of the amount 

17 authorized to be appropriated for salaries and ex18 penses of the Department of Education, $1,000,000 

19 shall be available to carry out this Act and the 

20 amendments made by this Act. 

21 (2) NO ADDITIONAL FUNDS AUTHORIZED.—No 

22 funds are authorized to be appropriated by this Act 

23 to carry out this Act or the amendments made by 

24 this Act. 


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1 SEC. 3. HIGHER EDUCATION REGULATORY REFORM TASK 

2 FORCE. 

3 (a) TASK FORCE ESTABLISHED.—Not later than 2 

4 months after the date of enactment of this Act, the Sec5 retary of Education shall establish the Higher Education 

6 Regulatory Reform Task Force. 

7 (b) MEMBERSHIP.—The Higher Education Regu8 latory Reform Task Force shall include— 

9 (1) the Secretary of Education or the Sec10 retary’s designee; 

11 (2) a representative of the Advisory Committee 

12 on Student Financial Assistance established under 

13 section 491 of the Higher Education Act of 1965 

14 (20 U.S.C. 1098); and 

15 (3) representatives from the higher education 

16 community, including— 

17 (A) institutions of higher education, with 

18 equal representation of public and private non19 profit institutions, and two-year and four-year 

20 institutions, and with not less than 25 percent 

21 of such representative institutions carrying out 

22 distance education programs; and 

23 (B) nonprofit organizations representing 

24 institutions of higher education. 

25 (c) ACTIVITIES.— 


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1 (1) REPORT REQUIRED.—Not later than 6 

2 months after the date of enactment of this Act, the 

3 Secretary of Education shall submit to Congress and 

4 make available on a publicly available website a re5 port (in this section referred to as the ‘‘Higher Edu6 cation Regulatory Reform Report’’) prepared by the 

7 Higher Education Regulatory Reform Task Force on 

8 Department of Education regulatory requirements 

9 for institutions of higher education described in 

10 paragraph (2). 

11 (2) CONTENTS OF REPORT.—The Higher Edu12 cation Regulatory Reform Report shall contain the 

13 following with respect to Department of Education 

14 regulatory requirements for institutions of higher 

15 education: 

16 (A) A list of rules that are determined to 

17 be outmoded, duplicative, ineffective, or exces18 sively burdensome. 

19 (B) For each rule listed in accordance with 

20 subparagraph (A) and that is in effect at the 

21 time of the review under subparagraph (A), an 

22 analysis of whether the costs outweigh the bene23 fits for such rule. 


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1 (C) Recommendations to consolidate, mod2 ify, simplify, or repeal such rules to make such 

3 rules more effective or less burdensome. 

4 (D) A description of the justification for 

5 and impact of the recommendations described 

6 in subparagraph (C), as appropriate and avail7 able, including supporting data for such jus8 tifications and the financial impact of such rec9 ommendations on institutions of higher edu10 cation of varying sizes and types. 

11 (E) Recommendations on the establish12 ment of a permanent entity to review new De13 partment of Education regulatory requirements 

14 affecting institutions of higher education. 

15 (3) NOTICE AND COMMENT.—At least 30 days 

16 before submission of the Higher Education Regu17 latory Reform Report required under paragraph (1), 

18 the Secretary of Education shall publish the report 

19 in the Federal Register for public notice and com20 ment. The Higher Education Regulatory Reform 

21 Task Force may modify the report in response to 

22 any comments received before submission of the re23 port to Congress. 

24 (d) DEFINITION OF INSTITUTION OF HIGHER EDU25 CATION.—For the purposes of this section, the term ‘‘inVerDate Mar 15 2010 01:07 Jul 25, 2014 Jkt 039200 PO 00000 Frm 00022 Fmt 6652 Sfmt 6201 E:\BILLS\H3136.RFS H3136

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1 stitution of higher education’’ has the meaning given such 

2 term in section 102 of the Higher Education Act of 1965 

3 (20 U.S.C. 1002), except that such term does not include 

4 institutions described in subsection (a)(1)(C) of such sec5 tion 102. 

6 SEC. 4. STUDY ON USE OF INDIVIDUAL INCOME TAX RE7 TURNS AS PRIMARY APPLICATION FOR FED8 ERAL STUDENT AID. 

9 Section 483 of the Higher Education Act of 1965 (20 

10 U.S.C. 1090) is amended by adding at the end the fol11 lowing new subsection: 

12 ‘‘(i) STUDY ON USE OF INDIVIDUAL INCOME TAX

13 RETURNS AS PRIMARY APPLICATION FOR FEDERAL STU14 DENT AID.— 

15 ‘‘(4) STUDY.—The Secretary of Education, in 

16 consultation with the Commissioner of Internal Rev17 enue, shall conduct a study on the feasibility and ad18 vantages and disadvantages of using individual in19 come tax returns as the primary form of application 

20 for student aid under the Higher Education Act of 

21 1965 (20 U.S.C. 1001 et seq.). 

22 ‘‘(5) REPORT.—Not later than one year after 

23 the date of the enactment of this subsection, the 

24 Secretary, in consultation with the Commissioner, 


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1 shall submit to Congress a report containing the re2 sults of the study conducted under subsection (a).’’. 

Passed the House of Representatives July 23, 2014. 

Attest: KAREN L. HAAS, 

Clerk. 


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