I 

116TH CONGRESS 

1ST SESSION H. R. 3369 

To close the GI Bill loophole and update the 80/20 rule for proprietary 

institutions of higher education. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 19, 2019 

Ms. SHALALA (for herself, Ms. WASSERMAN SCHULTZ, Mr. MOULTON, Mr. 

CISNEROS, Ms. HOULAHAN, Ms. MUCARSEL-POWELL, Mr. LUJA ́N, and 

Ms. SHERRILL) introduced the following bill; which was referred to the 

Committee on Education and Labor 

A BILL 

To close the GI Bill loophole and update the 80/20 rule 

for proprietary institutions of higher education. 

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 ‘‘Defending All Veterans 

5 in Education Act’’ or the ‘‘DAVIE Act’’. 


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1 SEC. 2. CLOSING THE GI BILL LOOPHOLE AND UPDATING 

2 THE 80/20 RULE FOR PROPRIETARY INSTITU3 TIONS OF HIGHER EDUCATION. 

4 (a) IN GENERAL.—Section 102(b) of the Higher 

5 Education Act of 1965 (20 U.S.C. 1002(b)), is further 

6 amended— 

7 (1) in paragraph (1)— 

8 (A) in subparagraph (D), by striking 

9 ‘‘and’’ after the semicolon; 

10 (B) in subparagraph (E), by striking the 

11 period at the end and inserting ‘‘; and’’; and 

12 (C) by adding at the end the following: 

13 ‘‘(F) meets the requirements of paragraph 

14 (2).’’; 

15 (2) by redesignating paragraph (2) as para16 graph (3); and 

17 (3) by inserting after paragraph (1) the fol18 lowing: 

19 ‘‘(2) REVENUE SOURCES.— 

20 ‘‘(A) IN GENERAL.—In order to qualify as 

21 a proprietary institution of higher education 

22 under this subsection, an institution shall derive 

23 not less than 20 percent of the institution’s rev24 enues from sources other than Federal funds, 

25 as calculated in accordance with subparagraphs 

26 (B) and (C). 


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1 ‘‘(B) FEDERAL FUNDS.—In this para2 graph, the term ‘Federal funds’ means any 

3 Federal funds provided, under this Act or any 

4 other Federal law, through a grant, contract, 

5 subsidy, loan, guarantee, insurance, or other 

6 means to a proprietary institution, including 

7 Federal funds disbursed or delivered to an insti8 tution or on behalf of a student or to a student 

9 to be used to attend the institution, except that 

10 such term shall not include any monthly hous11 ing stipend provided under the Post-9/11 Edu12 cational Assistance Program under chapter 33 

13 of title 38, United States Code. 

14 ‘‘(C) IMPLEMENTATION OF NON-FEDERAL

15 REVENUE REQUIREMENT.—In making calcula16 tions under subparagraph (A), an institution of 

17 higher education shall— 

18 ‘‘(i) use the cash basis of accounting; 

19 ‘‘(ii) consider as revenue only those 

20 funds generated by the institution from— 

21 ‘‘(I) tuition, fees, and other insti22 tutional charges for students enrolled 

23 in programs eligible for assistance 

24 under title IV; 


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1 ‘‘(II) activities conducted by the 

2 institution that are necessary for the 

3 education and training of the institu4 tion’s students, if such activities are— 

5 ‘‘(aa) conducted on campus 

6 or at a facility under the control 

7 of the institution; 

8 ‘‘(bb) performed under the 

9 supervision of a member of the 

10 institution’s faculty; and 

11 ‘‘(cc) required to be per12 formed by all students in a spe13 cific educational program at the 

14 institution; and 

15 ‘‘(III) a contractual arrangement 

16 with a Federal agency for the purpose 

17 of providing job training to low-in18 come individuals who are in need of 

19 such training; 

20 ‘‘(iii) presume that any Federal edu21 cation assistance funds that are disbursed 

22 or delivered to an institution on behalf of 

23 a student or directly to a student will be 

24 used to pay the student’s tuition, fees, or 

25 other institutional charges, regardless of 


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1 whether the institution credits such funds 

2 to the student’s account or pays such 

3 funds directly to the student, except to the 

4 extent that the student’s tuition, fees, or 

5 other institutional charges are satisfied 

6 by— 

7 ‘‘(I) grant funds provided by an 

8 outside source that— 

9 ‘‘(aa) has no affiliation with 

10 the institution; and 

11 ‘‘(bb) shares no employees, 

12 executives, or board members 

13 with the institution; 

14 ‘‘(II) funds provided under a con15 tractual arrangement with a Federal, 

16 State, or local government agency for 

17 the purpose of providing job training 

18 to low-income individuals who are in 

19 need of that training; or 

20 ‘‘(III) institutional scholarships 

21 described in clause (v); 

22 ‘‘(iv) include no loans made by an in23 stitution of higher education as revenue to 

24 the school, except for payments made by 

25 students on such loans; 


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1 ‘‘(v) include a scholarship provided by 

2 the institution— 

3 ‘‘(I) only if the scholarship is in 

4 the form of monetary aid based upon 

5 the academic achievements or finan6 cial need of students, disbursed to 

7 qualified student recipients during 

8 each fiscal year from an established 

9 restricted account; and 

10 ‘‘(II) only to the extent that 

11 funds in that account represent des12 ignated funds, or income earned on 

13 such funds, from an outside source 

14 that— 

15 ‘‘(aa) has no affiliation with 

16 the institution; and 

17 ‘‘(bb) shares no employees, 

18 executives, or board members 

19 with the institution; and 

20 ‘‘(vi) exclude from revenues— 

21 ‘‘(I) the amount of funds the in22 stitution received under part C of title 

23 IV, unless the institution used those 

24 funds to pay a student’s institutional 

25 charges; 


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1 ‘‘(II) the amount of funds the in2 stitution received under subpart 4 of 

3 part A of title IV; 

4 ‘‘(III) the amount of funds pro5 vided by the institution as matching 

6 funds for any Federal program; 

7 ‘‘(IV) the amount of Federal edu8 cation assistance funds provided to 

9 the institution to pay institutional 

10 charges for a student that were re11 funded or returned; and 

12 ‘‘(V) the amount charged for 

13 books, supplies, and equipment, unless 

14 the institution includes that amount 

15 as tuition, fees, or other institutional 

16 charges. 

17 ‘‘(D) REPORT TO CONGRESS.—Not later 

18 than July 1, 2020, and by July 1 of each suc19 ceeding year, the Secretary shall submit to the 

20 authorizing committees a report that contains, 

21 for each proprietary institution of higher edu22 cation that receives assistance under title IV 

23 and as provided in the audited financial state24 ments submitted to the Secretary by each instiVerDate Sep 11 2014 22:26 Jun 24, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3369.IH H3369

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1 tution pursuant to the requirements of section 

2 487(c)— 

3 ‘‘(i) the amount and percentage of 

4 such institution’s revenues received from 

5 Federal education assistance funds; and 

6 ‘‘(ii) the amount and percentage of 

7 such institution’s revenues received from 

8 other sources.’’. 

9 (b) REPEAL OF EXISTING REQUIREMENTS.—Section 

10 487 of the Higher Education Act of 1965 (20 U.S.C. 

11 1094) is amended— 

12 (1) in subsection (a)— 

13 (A) by striking paragraph (24); 

14 (B) by redesignating paragraphs (25) 

15 through (29) as paragraphs (24) through (28), 

16 respectively; 

17 (C) in paragraph (24)(A)(ii) (as redesig18 nated by subparagraph (B)), by striking ‘‘sub19 section (e)’’ and inserting ‘‘subsection (d)’’; and 

20 (D) in paragraph (26) (as redesignated by 

21 subparagraph (B)), by striking ‘‘subsection (h)’’ 

22 and inserting ‘‘subsection (g)’’; 

23 (2) by striking subsection (d); 

24 (3) by redesignating subsections (e) through (j) 

25 as subsections (d) through (i), respectively; 


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1 (4) in subsection (d) (as redesignated by para2 graph (3)), by striking ‘‘(a)(25)’’ and inserting 

3 ‘‘(a)(24)’’; 

4 (5) in subsection (f)(1) (as redesignated by 

5 paragraph (3)), by striking ‘‘subsection (e)(2)’’ and 

6 inserting ‘‘subsection (d)(2)’’; and 

7 (6) in subsection (g)(1) (as redesignated by 

8 paragraph (3)), by striking ‘‘subsection (a)(27)’’ in 

9 the matter preceding subparagraph (A) and insert10 ing ‘‘subsection (a)(26)’’. 

11 (c) CONFORMING AMENDMENTS.—The Higher Edu12 cation Act of 1965 (20 U.S.C. 1001 et seq.) is amended— 

13 (1) in section 152 (20 U.S.C. 1019a)— 

14 (A) in subsection (a)(1)(A), by striking 

15 ‘‘subsections (a)(27) and (h) of section 487’’ 

16 and inserting ‘‘subsections (a)(26) and (g) of 

17 section 487’’; and 

18 (B) in subsection (b)(1)(B)(i)(I), by strik19 ing ‘‘section 487(e)’’ and inserting ‘‘section 

20 487(d)’’; 

21 (2) in section 153(c)(3) (20 U.S.C. 

22 1019b(c)(3)), by striking ‘‘section 487(a)(25)’’ each 

23 place the term appears and inserting ‘‘section 

24 487(a)(24)’’; 


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1 (3) in section 496(c)(3)(A) (20 U.S.C. 

2 1099b(c)(3)(A)), by striking ‘‘section 487(f)’’ and 

3 inserting ‘‘section 487(e)’’; and 

4 (4) in section 498(k)(1) (20 U.S.C. 

5 1099c(k)(1)), by striking ‘‘section 487(f)’’ and in6 serting ‘‘section 487(e)’’. 

7 SEC. 3. EFFECTIVE DATE. 

8 The amendments made by section 2 shall take effect 

9 one year after the date of the enactment of this Act. 

Æ 


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