II 

114TH CONGRESS 

1ST SESSION S. 1355 

To provide for higher education reform. 

IN THE SENATE OF THE UNITED STATES 

MAY 14, 2015 

Mr. MURPHY (for himself and Mr. SCHATZ) introduced the following bill; 

which was read twice and referred to the Committee on Health, Education, Labor, and Pensions 

A BILL 

To provide for higher education reform. 

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 ‘‘College Affordability 

5 and Innovation Act of 2015’’. 

6 SEC. 2. DEFINITIONS. 

7 In this Act: 

8 (1) AUTHORIZING COMMITTEES.—The term 

9 ‘‘authorizing committees’’ means the Committee on 

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1 ate and the Committee on Education and the Work2 force of the House of Representatives. 

3 (2) SECRETARY.—The term ‘‘Secretary’’ means 

4 the Secretary of Education. 

5 SEC. 3. PILOT PROGRAM TO PROMOTE INNOVATION IN 

6 HIGHER EDUCATION. 

7 (a) PURPOSE; DEFINITION.— 

8 (1) PURPOSE.—The purpose of this section is 

9 to authorize an evidence-based grant program to 

10 promote greater experimentation among institutions 

11 of higher education to increase the level of student 

12 attainment of postsecondary and graduate certifi13 cates and degrees through innovative programs de14 signed to decrease the cost and time required to 

15 complete postsecondary and graduate programs 

16 while improving the quality and effectiveness of post17 secondary education programs, providing accelerated 

18 degree or certificate programs, and increasing on19 time graduation rates. 

20 (2) INSTITUTION OF HIGHER EDUCATION.—In 

21 this section, the term ‘‘institution of higher edu22 cation’’ has the meaning given the term in section 

23 102 of the Higher Education Act of 1965 (20 

24 U.S.C. 1002). 


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1 (b) INCENTIVE GRANTS FOR INNOVATIVE PROGRAMS

2 THAT IMPROVE QUALITY AND AFFORDABILITY.— 

3 (1) IN GENERAL.— 

4 (A) GRANTS.—The Secretary shall, for a 

5 5-year award term, award grants to not more 

6 than 15 institutions of higher education, 

7 through a competitive process described in this 

8 section, to enable the institutions to carry out 

9 programs designed to graduate students with 

10 certificates or degrees at significantly lower 

11 costs for students and within shorter time peri12 ods than traditional programs while improving 

13 the quality and effectiveness of the programs. 

14 (B) GOOD STANDING REQUIREMENT.— 

15 Only those institutions of higher education that 

16 are in good standing with the administration of 

17 their student assistance programs under title IV 

18 of the Higher Education Act of 1965 (20 

19 U.S.C. 1070 et seq.) shall be eligible to receive 

20 grants under subparagraph (A). 

21 (2) DISTRIBUTION OF GRANT FUNDS.—Grant 

22 payments shall be awarded with an initial distribu23 tion of 20 percent of the total grant amount, fol24 lowed by a distribution of 10 percent of the total 

25 grant amount prior to the second, third, and fourth 


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1 years of the program, and the remaining 50 percent 

2 of the total grant amount after the program receives 

3 its final satisfactory annual evaluation by the Sec4 retary in accordance with subsection (f)(1). 

5 (3) DESCRIPTION OF INNOVATIVE PROGRAMS.— 

6 The programs described under paragraph (1) shall 

7 include those that— 

8 (A) utilize online instruction, including dis9 tance education (as defined in section 103 of 

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

11 1003)), or online interaction components, or on12 line instruction integrated with classroom or in13 person instruction; 

14 (B) utilize direct assessment programs, as 

15 described in section 481(b)(4) of the Higher 

16 Education Act of 1965 (20 U.S.C. 1088(b)(4)), 

17 either within a comprehensive direct assessment 

18 program or integrated within another type of 

19 academic program; 

20 (C) utilize integration of experiential learn21 ing and design of customized programs of 

22 study, to promote completion or alignment with 

23 medium- and long-term employment needs; 

24 (D) allow students to be dually or concur25 rently enrolled in the postsecondary program 


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1 and a secondary school, or a postsecondary pro2 gram and a graduate program; 

3 (E) allow students to transfer credits from 

4 secondary to postsecondary to graduate pro5 grams, such as between associate’s and bach6 elor’s degree programs, without undue burdens, 

7 cost, or loss of credit to students to encourage 

8 early and on-time completion of a postsecondary 

9 degree or certificate; or 

10 (F) utilize any other innovative, evidence11 based method of postsecondary education that 

12 provides cost-effective, high-quality methods for 

13 instruction, student learning, and use of avail14 able technology-based resources, including hy15 brid models incorporating elements of the pro16 gram types set forth in subparagraphs (A), (B), 

17 (C), (D), and (E), and adaptive learning tech18 nologies. 

19 (c) APPLICATIONS.— 

20 (1) IN GENERAL.—An institution of higher edu21 cation that desires to receive a grant under this sec22 tion shall submit an application to the Secretary at 

23 such time and in such manner as the Secretary may 

24 require. 


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1 (2) CONTENTS.—An application submitted 

2 under paragraph (1) shall include— 

3 (A) a description of the institution’s qual4 ity assurances for the programs to be offered; 

5 (B) a description of the statutory and reg6 ulatory requirements for which a waiver is 

7 sought under subsection (e) and the reasons for 

8 which the waiver is sought; 

9 (C) a description of the programs to be of10 fered; 

11 (D) a description of the students eligible 

12 for the programs offered, including any eligi13 bility limitations; 

14 (E) an assurance that the institution will 

15 fully cooperate with the ongoing evaluations of 

16 the programs provided for in this section; 

17 (F) a description of how the proposed pro18 gram will improve the quality of its postsec19 ondary certificates or degrees, reduce tuition 

20 and other costs to students, and reduce enroll21 ment time; 

22 (G) a description of the data (or any other 

23 evidence) that indicate that the programs to be 

24 offered will likely lead to the outcomes de25 scribed in subparagraph (F); 


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1 (H) a complete listing of the institution’s 

2 performance goals and measures regarding as3 sessments of the quality of its postsecondary 

4 certificates or degrees, amount of tuition and 

5 costs charged to students, and the amount of 

6 enrollment time needed by students to complete 

7 the postsecondary certificates or degrees; and 

8 (I) any other information as the Secretary 

9 may require. 

10 (d) AWARDING OF GRANTS.— 

11 (1) IN GENERAL.—The Secretary shall award 

12 grants under this section to institutions of higher 

13 education for new or existing programs. 

14 (2) PRIORITY.—In awarding grants under this 

15 section, the Secretary shall give priority to an insti16 tution of higher education that the Secretary deter17 mines— 

18 (A) is financially responsible, as described 

19 in section 498(c)(1) of the Higher Education 

20 Act of 1965 (20 U.S.C. 1099c(c)(1)); 

21 (B) has a proven record of graduating stu22 dents from the other programs of the institu23 tion; 


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1 (C) has a proven record of graduates from 

2 the other programs of the institution securing 

3 full-time employment; 

4 (D) simultaneously addresses income-re5 lated inequalities in remedial education, college 

6 access, persistence rates, and graduation rates; 

7 (E) has support services in place, such as 

8 counseling, coaching, mentoring, and outreach, 

9 that are designed to assist all students in ob10 taining information and making decisions re11 garding financial aid, and degree or certificate 

12 likelihood of persistence and completion; 

13 (F) will serve low-income students, adult 

14 students aged 25 years and older, and part-time 

15 students; 

16 (G) will support programs that are 

17 replicable at a range of institutions of higher 

18 education if they are demonstrated to be suc19 cessful; and 

20 (H) has presented the strongest evidence 

21 in support of their likely outcomes, as required 

22 under subsection (c)(2)(G). 

23 (3) DIVERSE POPULATIONS.—In awarding 

24 grants under this section, the Secretary shall ensure 

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1 cluding rural and urban populations, and of a di2 verse range of institutions. 

3 (4) PUBLICATION OF GRANTEES.—The Sec4 retary shall make available to the public and to the 

5 authorizing committees a list of the institutions of 

6 higher education awarded a grant under this section, 

7 including a listing of the specific statutory and regu8 latory requirements being waived for each institution 

9 and a description of the programs and courses to be 

10 offered. 

11 (e) WAIVERS.— 

12 (1) IN GENERAL.—Except as provided under 

13 paragraph (2), with respect to institutions of higher 

14 education awarded grants under this section, the 

15 Secretary may waive— 

16 (A) subsection (a) or (b) of section 481 of 

17 the Higher Education Act of 1965 (20 U.S.C. 

18 1088(a) and (b)), as such subsections relate to 

19 requirements for a minimum number of weeks 

20 of instruction; 

21 (B) subparagraph (A) or (B) of section 

22 102(a)(3) of such Act (20 U.S.C. 

23 1002(a)(3)(A) and (B)); 

24 (C) one or more of the regulations promul25 gated to carry out part F or G of title IV of 


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1 such Act (20 U.S.C. 1087kk et seq. and 1088 

2 et seq.), which inhibit the operation of innova3 tive education programs; and 

4 (D) any other requirement under title IV 

5 of such Act (20 U.S.C. 1070 et seq.) that will 

6 bias the results of the program, including a re7 quirement related to the award process and dis8 bursement of student financial aid (such as in9 novative delivery systems for modular or com10 pressed courses or other innovative systems), or 

11 other management procedures or processes as 

12 determined in the negotiated rulemaking proc13 ess under section 492 of such Act (20 U.S.C. 

14 1098a), or regulations prescribed under such 

15 title. 

16 (2) PROHIBITION OF WAIVER.—The Secretary 

17 shall not waive, pursuant to paragraph (1), any pro18 vision under the Higher Education Act of 1965 (20 

19 U.S.C. 1001 et seq.) or a regulation promulgated to 

20 carry out such Act with respect to award rules 

21 (other than an award rule related to an experiment 

22 in modular or compressed schedules), grant and loan 

23 maximum award amounts, and need analysis re24 quirements, unless the waiver of such provision is 

25 authorized by another provision under such Act. 


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1 (f) EVALUATION AND REPORTS.— 

2 (1) EVALUATION AND ACCOUNTABILITY PROC3 ESS.—The Secretary shall establish an evaluation 

4 and accountability process for the programs author5 ized under this section and shall administer such 

6 process on an annual basis. Such evaluations shall 

7 include— 

8 (A) the extent to which the institution of 

9 higher education has met the goals set forth in 

10 its application to the Secretary, including the 

11 quality of education provided by participating 

12 programs; 

13 (B) the number and types of students par14 ticipating in the programs offered, including the 

15 progress of participating students toward recog16 nized certificates or degrees; 

17 (C) issues related to student financial as18 sistance; 

19 (D) the extent to which any statutory or 

20 regulatory requirements present difficulties for 

21 students or institutions in the participating pro22 grams; and 

23 (E) an analysis of the program’s progress 

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1 dents toward recognized certificates or degrees, 

2 prices charged to students, time required to 

3 complete the participating programs, on-time 

4 completion rates of participating students, and 

5 indicators of program quality. 

6 (2) REVIEW.—The Secretary shall review poli7 cies and identify those policies that present impedi8 ments to the development and use of innovative pro9 grams and other nontraditional methods of expand10 ing success and access to education. 

11 (3) MEASURES.—The Secretary shall establish 

12 measures to assess the quality of the education pro13 vided by participating programs under this section, 

14 including a minimum standard of quality that par15 ticipating programs shall meet. 

16 (4) REPORTS.—The Secretary shall provide re17 ports to the authorizing committees on an annual 

18 basis regarding— 

19 (A) the programs authorized under this 

20 section; and 

21 (B) the number and types of students re22 ceiving assistance under this section for instruc23 tion leading to a recognized degree or certifi24 cate, including the progress of such students to25 ward recognized certificates and the degree to 


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1 which participation in such programs leading to 

2 such certificates increased. 

3 (5) DUTIES OF THE SECRETARY.—In con4 ducting the program authorized under this section, 

5 the Secretary shall, on a continuing basis— 

6 (A) ensure compliance of institutions of 

7 higher education with the requirements of this 

8 section (other than the sections and regulations 

9 that are waived under subsection (e)); 

10 (B) provide technical assistance; 

11 (C) monitor fluctuations in the student 

12 population enrolled in the participating pro13 gram; and 

14 (D) assess whether each participating pro15 gram is improving the quality of postsecondary 

16 credentials and meeting the quality control 

17 measures set by the Secretary. 

18 (g) CONSUMER PROTECTION FOR STUDENTS.— 

19 (1) PROGRAM TERMINATION.—If a program 

20 funded under this section terminates on its accord at 

21 any point during which the program is receiving 

22 funds under this section, or if the Secretary deter23 mines that the program does not meet the minimum 

24 standard of quality as required under subsection 

25 (f)(3)— 


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1 (A) the institution of higher education ad2 ministering the program shall provide imme3 diate notice to students enrolled in the program 

4 and shall prepare a teach-out plan, as described 

5 in section 487(f) of the Higher Education Act 

6 of 1965 (20 U.S.C. 1094(f)); and 

7 (B) the Secretary shall— 

8 (i) ensure that— 

9 (I) no additional program funds 

10 are distributed to the program; and 

11 (II) the institution of higher edu12 cation administering the program is in 

13 compliance with the notice and teach14 out requirements under subparagraph 

15 (A); and 

16 (ii) assess a fine to an institution of 

17 higher education administering the pro18 gram that is not in compliance with the 

19 notice and teach-out requirements under 

20 subparagraph (A). 

21 (2) NOTICE AND DISCLOSURE FOR STU22 DENTS.—An institution of higher education admin23 istering a participating program under this section 

24 shall provide notice to all students before they enroll 

25 in the participating program that such program is 


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1 receiving grant funds under this section and may be 

2 terminated, as described in paragraph (1). 

3 (h) FINAL EVALUATION BY THIRD-PARTY RE4 VIEWER.— 

5 (1) IN GENERAL.—The Secretary shall direct 

6 an independent third-party evaluator to review all 

7 participating programs and conduct a final evalua8 tion in order to determine the evidence of the effec9 tiveness of each program in achieving its objectives 

10 with regard to the quality of the education provided, 

11 reducing the cost of the degree or certificate pro12 gram, and shortening the amount of time needed to 

13 complete the degree or certificate program. 

14 (2) EVALUATION METHODOLOGY.—The inde15 pendent third-party evaluator shall establish evalua16 tion methodology in carrying out the final evaluation 

17 under paragraph (1). 

18 (3) SUBMISSION TO AUTHORIZING COMMIT19 TEES.—The independent third-party evaluator shall 

20 publicize the final evaluation and submit such eval21 uation to the authorizing committees. 

22 (4) FUNDING.—Not more than 1 percent of the 

23 total amount appropriated to carry out this section 

24 may be used to carry out this subsection. 


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1 (i) AUTHORIZATION OF APPROPRIATIONS.—There is 

2 authorized to be appropriated to carry out this section— 

3 (1) $260,000,000 for fiscal year 2016; and 

4 (2) such sums as may be necessary for each 

5 succeeding fiscal year. 

6 SEC. 4. HIGHER EDUCATION ACCOUNTABILITY. 

7 (a) PURPOSE; DEFINITION.— 

8 (1) IN GENERAL.—The purpose of this section 

9 is to establish minimum institutional accountability 

10 standards that will be required of all institutions of 

11 higher education that receive funds or whose stu12 dents receive funds pursuant to title IV of the High13 er Education Act of 1965 (20 U.S.C. 1070 et seq.) 

14 programs. The standards shall focus on afford15 ability, accessibility for low- and middle-income stu16 dents, and value. 

17 (2) INSTITUTION OF HIGHER EDUCATION.—In 

18 this section: 

19 (A) IN GENERAL.—The term ‘‘institution 

20 of higher education’’ means an institution of 

21 higher education described in section 102 of the 

22 Higher Education Act of 1965 (20 U.S.C. 

23 1002), except as provided in subparagraphs (B) 

24 and (C). 


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1 (B) EXCEPTION.—The term ‘‘institution of 

2 higher education’’ does not include institutions 

3 that solely offer graduate or professional degree 

4 programs of study. 

5 (C) INSTITUTIONS.—To the extent an in6 stitution offers undergraduate programs of 

7 study and graduate or professional degree pro8 grams of study, for purposes of this section, the 

9 term ‘‘institution of higher education’’ with re10 spect to such institutions shall only include the 

11 undergraduate programs of study. 

12 (b) COMMISSION ON HIGHER EDUCATION ACCOUNT13 ABILITY STANDARDS.— 

14 (1) IN GENERAL.—Not later than 90 days after 

15 the date of enactment of this Act, there shall be es16 tablished a Commission on Higher Education Ac17 countability Standards (referred to in this section as 

18 the ‘‘Commission’’) to make recommendations on a 

19 set of minimum accountability standards and the 

20 measures for assessing compliance with such stand21 ards for institutions of higher education that shall 

22 focus on affordability, access for low- and middle-in23 come students, and value. 

24 (2) COMPOSITION OF THE COMMISSION.— 


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1 (A) IN GENERAL.—Members of the Com2 mission shall be appointed as follows: 

3 (i) 5 members shall be appointed by 

4 the Majority Leader of the Senate, with 

5 the concurrence of the Minority Leader of 

6 the Senate on 2 of such members. 

7 (ii) 5 members shall be appointed by 

8 the Majority Leader of the House of Rep9 resentatives, with the concurrence of the 

10 Minority Leader of the House of Rep11 resentatives on 2 of such members. 

12 (iii) 5 members shall be appointed by 

13 the Secretary, including at least 1 member 

14 from the National Center for Education 

15 Statistics and 1 member from the Federal 

16 Student Aid Office of the Department of 

17 Education. 

18 (iv) In the event that any member of 

19 the Commission has not been appointed 

20 during the 90-day period after the date of 

21 enactment of this Act, the Secretary shall 

22 appoint the remaining member in order to 

23 establish the Commission. 


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1 (B) GENERAL QUALIFICATIONS.—Members 

2 of the Commission shall be appointed on the 

3 basis of the individuals’— 

4 (i) experience, integrity, impartiality, 

5 and good judgment; and 

6 (ii) except with respect to the under7 graduate students, technical qualifications 

8 and professional standing. 

9 (C) MEMBERS OF THE COMMISSION.— 

10 Members appointed under subparagraph (A) 

11 shall be comprised of the following relevant 

12 stakeholders: 

13 (i) 2 undergraduate student leaders 

14 from different types of institutions of high15 er education. 

16 (ii) 2 members of national or regional 

17 student advocacy organizations with a 

18 track record of engagement and expertise 

19 on issues related to college costs and stu20 dent debt. 

21 (iii) 1 consumer advocate or consumer 

22 protection expert with demonstrated knowl23 edge of consumer protection issues related 

24 to undergraduate students. 


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1 (iv) 2 representatives of faculty 

2 groups or associations with expertise re3 lated to higher education finance or gov4 ernance. 

5 (v) 1 State government official with 

6 demonstrated knowledge of State budg7 eting and higher education funding. 

8 (vi) 3 administrative officers from 

9 various types of institutions of higher edu10 cation, including at least 1 from a minor11 ity-serving institution. 

12 (vii) 1 higher education researcher. 

13 (viii) 1 State postsecondary education 

14 data system director. 

15 (ix) 1 member from the National Cen16 ter for Education Statistics. 

17 (x) 1 member from the Federal Stu18 dent Aid Office of the Department of Edu19 cation. 

20 (3) RECOMMENDATIONS.— 

21 (A) IN GENERAL.—The Commission shall 

22 make recommendations on a set of minimum 

23 accountability standards that institutions of 

24 higher education must meet with respect to af25 fordability, accessibility, and value in order to 


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1 receive funds or that the students of such insti2 tutions may receive funds pursuant to title IV 

3 of the Higher Education Act of 1965 (20 

4 U.S.C. 1070 et seq.) programs. The Commis5 sion shall also recommend measures and accept6 able levels of performance on those measures to 

7 assess compliance with the minimum account8 ability standards. If the Commission cannot 

9 issue its recommendations by consensus, it shall 

10 issue its recommendations based on the views of 

11 a majority of the Commission. 

12 (B) REQUIRED MEASURES.—The Commis13 sion shall include, at a minimum, the following 

14 measures as part of the minimum account15 ability standards it shall recommend: 

16 (i) AFFORDABILITY.—The average or 

17 mean cost of tuition and other costs re18 quired for attendance after all institu19 tional, Federal, and State grant aid is 

20 taken into account. 

21 (ii) ACCESSIBILITY.—The percentage 

22 of the total number of enrolled students 

23 who are recipients of a Federal Pell Grant 

24 under subpart 1 of part A of title IV of the 


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1 Higher Education Act of 1965 (20 U.S.C. 

2 1070a et seq.). 

3 (iii) VALUE.—Student loan repayment 

4 rates. 

5 (C) OTHER MEASURES.—The Commission 

6 shall make recommendations on additional 

7 measures to comprise the minimum account8 ability standards, including the following: 

9 (i) AFFORDABILITY.—The Commis10 sion shall make recommendations on addi11 tional higher education affordability meas12 ures, including the appropriateness of the 

13 following: 

14 (I) The cost of tuition relative to 

15 the cost to the institution of educating 

16 a student and the institution’s admin17 istrative costs. 

18 (II) The percentage of institu19 tional aid that is awarded on the basis 

20 of need, as opposed to merit. 

21 (III) Annual increases in tuition 

22 after taking into account all public 

23 subsidies. 

24 (ii) ACCESSIBILITY.—The Commission 

25 shall make recommendations on higher 


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1 education accessibility measures, including 

2 the appropriateness of the following: 

3 (I) Enrollment of low- and mid4 dle-income, underrepresented minori5 ties, and adult students aged 25 and 

6 older. 

7 (II) Whether institutional policies 

8 on credit transfers meet industry 

9 standards by type of receiving institu10 tion. 

11 (iii) VALUE.—The Commission shall 

12 make recommendations on measures of 

13 higher education value, including the ap14 propriateness of the following: 

15 (I) Student progress toward com16 pletion of a postsecondary degree or 

17 certificate. 

18 (II) Student completion of a 

19 postsecondary degree or certificate, in20 cluding for transfer and part-time stu21 dents, or where applicable, transfer 

22 rates to 4-year degree programs. 

23 (III) Student retention rates. 


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1 (IV) Full-time employment and 

2 graduate degree enrollment rates after 

3 graduation. 

4 (4) CONSIDERATIONS.—The Commission shall 

5 take into account the differences in missions of insti6 tutions of higher education and ensure that institu7 tions are held to standards that are appropriate for 

8 their mission. 

9 (5) HEARINGS AND REPORT.— 

10 (A) HEARINGS.—Not later than 6 months 

11 after the date of the appointment of the final 

12 member of the Commission, the Commission 

13 shall hold public field hearings in all regions of 

14 the United States. The Commission shall hold 

15 not fewer than 8 hearings. 

16 (B) REPORT.—Not later than 1 year after 

17 the date of the appointment of the final mem18 ber of the Commission, the Commission shall 

19 prepare a report on the recommendations under 

20 paragraph (3) and submit the report to the 

21 Secretary and the authorizing committees. The 

22 report shall include the following: 

23 (i) Recommendations for minimum ac24 countability standards and the measures 

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1 ards for every institution of higher edu2 cation that receives funds or whose stu3 dents receive funds pursuant to title IV of 

4 the Higher Education Act of 1965 (20 

5 U.S.C. 1070 et seq.) programs. The stand6 ards shall focus on affordability, access for 

7 low- and middle-income students, and 

8 value. The Commission shall recommend 

9 standards that are in accordance with the 

10 types of information that institutions of 

11 higher education are authorized to collect 

12 and report under the Higher Education 

13 Act of 1965 (20 U.S.C. 1001 et seq.). 

14 (ii) Recommendations for applying the 

15 standards to institutions of higher edu16 cation with different academic missions. 

17 (iii) Recommendations for periodic re18 evaluation of the standards and their effi19 cacy by the Secretary. 

20 (iv) Recommendations for sharing in21 stitutions’ performance with respect to the 

22 standards with prospective students and 

23 conducting complementary consumer edu24 cation for students. 


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1 (v) Recommendations for the criteria 

2 the Secretary should use to reward institu3 tions of higher education that meet and ex4 ceed the minimum accountability stand5 ards. 

6 (vi) Recommendations to Congress on 

7 reforms to statutory or regulatory limita8 tions on the collection and availability of 

9 data that would improve the Secretary’s 

10 ability to assess institutions’ compliance 

11 with minimum standards of affordability, 

12 accessibility, and value. 

13 (6) SECURING INFORMATION.—The Commis14 sion may secure directly from any Federal depart15 ment or agency such information as the Commission 

16 considers necessary to carry out its duties under this 

17 section. The Commission may request the head of 

18 any State or local department or agency to furnish 

19 such information to the Commission. 

20 (7) FINAL STANDARDS.— 

21 (A) IN GENERAL.—Not later than 1 year 

22 after receiving the report under paragraph (5), 

23 the Secretary shall publish a final rule on insti24 tutional accountability standards. The stand25 ards shall be determined by the Secretary after 


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1 giving due consideration to the recommended 

2 standards provided by the Commission. The 

3 Secretary shall set forth in writing the reasons 

4 for any deviation from the Commission’s rec5 ommendations for any standard or measure and 

6 shall submit the written statement to the au7 thorizing committees. 

8 (B) REQUIRED MEASURES TO BE IN9 CLUDED.—In carrying out subparagraph (A), 

10 the Secretary shall include the measures de11 scribed in paragraph (3)(B) that the Commis12 sion is required to include as part of its min13 imum accountability standards. 

14 (8) ASSESSMENT.—The Secretary shall annu15 ally assess compliance with the institutional account16 ability standards. On September 30 of the year fol17 lowing the publication of the final rule as required 

18 under paragraph (7) and every year thereafter, the 

19 Secretary shall publish a list of each institution of 

20 higher education that participates in title IV of the 

21 Higher Education Act of 1965 (20 U.S.C. 1070 et 

22 seq.) and the institution’s level of compliance with 

23 the accountability standards. The list shall be made 

24 easily accessible to the public. 


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1 (9) IMPLEMENTATION.—The Secretary shall es2 tablish procedures to implement this subsection, in3 cluding procedures for effectively applying this sub4 section. 

5 (10) TERMINATION.—The Commission shall 

6 terminate 60 days after the date on which the Com7 mission submits the report under paragraph (5). 

8 (c) INCENTIVIZE IMPROVEMENT FOR BELOW-STAND9 ARD INSTITUTIONS.— 

10 (1) IN GENERAL.—An institution of higher edu11 cation that participates in title IV of the Higher 

12 Education Act of 1965 (20 U.S.C. 1070 et seq.) 

13 programs and that does not meet the institutional 

14 accountability standards adopted under subsection 

15 (b)— 

16 (A) shall be deemed to be in probationary 

17 status; and 

18 (B) shall work with the Secretary to de19 velop a plan for how the institution will achieve 

20 compliance not later than 5 years after the date 

21 of the determination of noncompliance. 

22 (2) CONTINUOUS IMPROVEMENT.—For each 

23 year following a determination that an institution of 

24 higher education does not meet the institutional ac25 countability standards adopted under subsection (b), 


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•S 1355 IS

1 the institution shall demonstrate to the Secretary 

2 continuous improvement in following its plan to 

3 achieve compliance. 

4 (3) FAILURE TO MAKE CONTINUOUS IMPROVE5 MENT.— 

6 (A) IN GENERAL.— 

7 (i) 2 YEARS OUT.—If an institution of 

8 higher education does not show continuous 

9 improvement 2 years after a determination 

10 that it does not meet the institutional ac11 countability standards adopted under sub12 section (b), the institution shall pay to the 

13 Secretary an amount equal to 10 percent 

14 of the total amount of funds made avail15 able under title IV of the Higher Edu16 cation Act of 1965 (20 U.S.C. 1070 et 

17 seq.) to students in attendance with an un18 dergraduate enrollment status at the insti19 tution during the prior academic year, to 

20 be deposited into the fund described in 

21 subparagraph (C). 

22 (ii) 3 YEARS OUT.—If an institution 

23 of higher education does not show contin24 uous improvement 3 years after a deter25 mination that it does not meet the instituVerDate Sep 11 2014 05:57 May 21, 2015 Jkt 049200 PO 00000 Frm 00029 Fmt 6652 Sfmt 6201 E:\BILLS\S1355.IS S1355

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•S 1355 IS

1 tional accountability standards adopted 

2 under subsection (b), the institution shall 

3 pay to the Secretary an amount equal to 

4 20 percent of the total amount of funds 

5 made available under title IV of the Higher 

6 Education Act of 1965 (20 U.S.C. 1070 et 

7 seq.) to students in attendance with an un8 dergraduate enrollment status at the insti9 tution during the prior academic year, to 

10 be deposited into the fund described in 

11 subparagraph (C). 

12 (iii) 4 YEARS OUT.—If an institution 

13 of higher education does not show contin14 uous improvement 4 years after a deter15 mination that it does not meet the institu16 tional accountability standards adopted 

17 under subsection (b), the institution shall 

18 pay to the Secretary an amount equal to 

19 30 percent of the total amount of funds 

20 made available under title IV of the Higher 

21 Education Act of 1965 (20 U.S.C. 1070 et 

22 seq.) to students in attendance with an un23 dergraduate enrollment status at the insti24 tution during the prior academic year, to 


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1 be deposited into the fund described in 

2 subparagraph (C). 

3 (B) WAIVER AND PAYMENT PLAN.— 

4 (i) WAIVER.—The Secretary may 

5 waive a requirement of an institution of 

6 higher education paying the amount owed 

7 pursuant to subparagraph (A) if the Sec8 retary determines such a waiver is nec9 essary to avoid extreme hardship for the 

10 students enrolled at such institution. 

11 (ii) PAYMENT PLAN.—The Secretary 

12 may allow an institution of higher edu13 cation that owes an amount under sub14 paragraph (A) to enter into a payment 

15 plan to pay such amount. 

16 (C) FUND.—There shall be established a 

17 special fund in which amounts refunded by an 

18 institution of higher education under this para19 graph shall be placed to be used pursuant to 

20 subsection (d). 

21 (4) NONCOMPLIANCE FIVE YEARS OUT.—If an 

22 institution of higher education fails to achieve com23 pliance by not later than the date that is 5 years 

24 after the date of the determination that the instituVerDate Sep 11 2014 05:57 May 21, 2015 Jkt 049200 PO 00000 Frm 00031 Fmt 6652 Sfmt 6201 E:\BILLS\S1355.IS S1355

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1 tion does not meet the institutional accountability 

2 standards, the institution— 

3 (A) shall not be eligible to receive funds 

4 under title IV of the Higher Education Act of 

5 1965 (20 U.S.C. 1070 et seq.) for the academic 

6 year following the date that is 5 years after the 

7 date of the determination; 

8 (B) shall be required to submit a teach-out 

9 plan, as described in section 487(f) of the High10 er Education Act of 1965 (20 U.S.C. 1094(f)); 

11 and 

12 (C) shall be eligible to receive funds under 

13 such title IV when the institution is able to 

14 demonstrate compliance with the institutional 

15 accountability standards. 

16 (d) AUTHORIZATION OF REWARD GRANT PRO17 GRAM.— 

18 (1) IN GENERAL.—From amounts available in 

19 the fund established pursuant to subsection 

20 (c)(3)(C), the Secretary shall award grants, on a 

21 competitive basis, to institutions of higher education 

22 that meet or exceed the institutional accountability 

23 standards adopted under subsection (b). In deter24 mining the criteria for awarding grants, the SecVerDate Sep 11 2014 05:57 May 21, 2015 Jkt 049200 PO 00000 Frm 00032 Fmt 6652 Sfmt 6201 E:\BILLS\S1355.IS S1355

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1 retary shall give due consideration to the rec2 ommendations of the Commission. 

3 (2) USE FOR FINANCIAL AID.—An institution of 

4 higher education awarded a grant under paragraph 

5 (1) shall use the grant funds for need-based aid to 

6 students who are eligible for Federal Pell Grants 

7 under subpart 1 of part A of title IV of the Higher 

8 Education Act of 1965 (20 U.S.C. 1070a et seq.). 

Æ 


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