I 

116TH CONGRESS 

1ST SESSION H. R. 3112 

To revise the 90–10 rule under the Higher Education Act of 1965, and 

for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 5, 2019 

Ms. WATERS introduced the following bill; which was referred to the Committee on Education and Labor, and in addition to the Committees on 

Armed Services, and Veterans’ Affairs, for a period to be subsequently 

determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To revise the 90–10 rule under the Higher Education Act 

of 1965, and for other purposes. 

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 ‘‘For-Profit Fraud Act’’. 

5 SEC. 2. 85/15 RULE. 

6 Section 487 of the Higher Education Act of 1965 (20 

7 U.S.C. 1094) is amended— 

8 (1) in subsection (a)(24)— 


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1 (A) by striking ‘‘In the case’’ and insert2 ing: 

3 ‘‘(A) In the case’’; 

4 (B) by striking ‘‘not less than ten percent 

5 of such institution’s revenues from sources 

6 other than funds provided under this title’’ and 

7 inserting ‘‘not less than 15 percent of such in8 stitution’s revenues from sources other than 

9 Federal funds’’; and 

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

11 ‘‘(B) FEDERAL FUNDS.—In this paragraph, the 

12 term ‘Federal funds’ means any Federal funds pro13 vided, under this Act or any other Federal law, 

14 through a grant, contract, subsidy, loan, guarantee, 

15 insurance, or other means to a proprietary institu16 tion, including Federal funds disbursed or delivered 

17 to an institution or on behalf of a student or to a 

18 student to be used to attend the institution, except 

19 that such term shall not include any monthly hous20 ing stipend provided under the Post-9/11 Edu21 cational Assistance Program under chapter 33 of 

22 title 38, United States Code.’’; and 

23 (2) in subsection (d)— 

24 (A) in the heading, by amending the head25 ing to read as follows: ‘‘IMPLEMENTATION OF


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1 REVENUE REQUIREMENTS FOR NON-FEDERAL

2 EDUCATION ASSISTANCE FUNDS’’; and 

3 (B) in paragraph (2)(A), by inserting at 

4 the end the following: ‘‘The Secretary of Edu5 cation shall notify the Secretary of Defense and 

6 the Secretary of Veterans Affairs when, by rea7 son of failing to meet a requirement of sub8 section (a)(24), a proprietary institution of 

9 higher education becomes ineligible to partici10 pate in the programs authorized by this title, 

11 and when the institution regains such eligi12 bility.’’; 

13 SEC. 3. INELIGIBILITY OF CERTAIN PROPRIETARY INSTITU14 TIONS OF HIGHER EDUCATION TO PARTICI15 PATE IN DEPARTMENT OF DEFENSE OR DE16 PARTMENT OF VETERANS AFFAIRS PRO17 GRAMS OF EDUCATIONAL ASSISTANCE. 

18 (a) DEPARTMENT OF DEFENSE.— 

19 (1) IN GENERAL.—Chapter 101 of title 10, 

20 United States Code, is amended by inserting after 

21 section 2008 the following new section: 


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1 ‘‘§ 2008a. Ineligibility of certain proprietary institu2 tions of higher education to participate 

3 in Department of Defense programs of 

4 educational assistance 

5 ‘‘Upon notice from the Secretary of Education under 

6 section 487(d)(2)(A) of the Higher Education Act of 1965 

7 (20 U.S.C. 1094(d)(2)(A)) that a proprietary institution 

8 of higher education is ineligible to participate in the pro9 grams authorized by title IV of such Act (20 U.S.C. 1070 

10 et seq.), the Secretary of Defense shall ensure that no edu11 cational assistance provided by the Secretary under this 

12 title or any other provision of law is available or used for 

13 education at the institution for the period of institutional 

14 fiscal years during which the institution remains ineligible 

15 to participate in the programs authorized by title IV of 

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

17 seq.).’’. 

18 (2) CLERICAL AMENDMENT.—The table of sec19 tions at the beginning of chapter 101 of such title 

20 is amended by inserting after the item relating to 

21 section 2008 the following new item: 

‘‘2008a. Ineligibility of certain proprietary institutions of higher education to 

participate in Department of Defense programs of educational 

assistance.’’. 

22 (b) DEPARTMENT OF VETERANS AFFAIRS.— 


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1 (1) IN GENERAL.—Subchapter II of chapter 36 

2 of title 38, United States Code, is amended by in3 serting after section 3681 the following new section: 

4 ‘‘§ 3681A. Ineligibility of certain proprietary institu5 tions of higher education to participate 

6 in Department of Veterans Affairs pro7 grams of educational assistance 

8 ‘‘(a) IN GENERAL.—Upon notice from the Secretary 

9 of Education under section 487(d)(2)(A) of the Higher 

10 Education Act of 1965 (20 U.S.C. 1094(d)(2)(A)) that 

11 a proprietary institution of higher education is ineligible 

12 to participate in the programs authorized by title IV of 

13 such Act (20 U.S.C. 1070 et seq.), the Secretary of Vet14 erans Affairs shall ensure that no educational assistance 

15 provided by the Secretary under this title or any other 

16 provision of law is available or used for education at the 

17 institution for the period of institutional fiscal years dur18 ing which the institution remains ineligible to participate 

19 in the programs authorized by title IV of the Higher Edu20 cation Act of 1965 (20 U.S.C. 1070 et seq.).’’. 

21 (2) CLERICAL AMENDMENT.—The table of sec22 tions at the beginning of chapter 36 of such title is 

23 amended by inserting after the item relating to sec24 tion 3681 the following new item: 


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‘‘3681A. Ineligibility of certain proprietary institutions of higher education to 

participate in Department of Veterans Affairs programs of 

educational assistance.’’. 

Æ 


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