I 

116TH CONGRESS 

1ST SESSION H. R. 3487 

To improve the Higher Education Act of 1965, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 25, 2019 

Mr. TAKANO introduced the following bill; which was referred to the 

Committee on Education and Labor 

A BILL 

To improve 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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Protections and Regulation for Our Students Act’’ or 

6 ‘‘PRO Students Act’’. 

7 (b) TABLE OF CONTENTS.—The table of contents for 

8 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. 85–15 revenue source requirement for proprietary institutions. 

Sec. 3. Definitions. 

Sec. 4. Restriction on marketing with Federal educational assistance funds. 

Sec. 5. Whistleblower protections for persons associated with institutions of 

higher education. 


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Sec. 6. Establishment of complaint resolution and tracking system. 

Sec. 7. Proprietary education oversight coordination committee. 

Sec. 8. Improved determination of cohort default rates; publication of default 

prevention plan. 

Sec. 9. Amendments to terms and conditions of borrower defenses. 

Sec. 10. Improved student loan servicing and debt collection practices. 

Sec. 11. Improved disclosures, counseling, and financial assistance information 

for students. 

Sec. 12. Program participation agreements. 

Sec. 13. Improved disclosures for clinical training programs. 

Sec. 14. Civil penalties. 

Sec. 15. Requirements for accrediting agencies or associations. 

Sec. 16. Program review and data. 

Sec. 17. Consumer protections for students. 

1 SEC. 2. 85–15 REVENUE SOURCE REQUIREMENT FOR PRO2 PRIETARY INSTITUTIONS. 

3 (a) CHANGE FROM 90–10 TO 85–15.—Section 

4 487(a)(24) of the Higher Education Act of 1965 (20 

5 U.S.C. 1094(a)(24)) is amended by striking ‘‘ten percent’’ 

6 and inserting ‘‘15 percent’’. 

7 (b) REVISIONS TO ACCOUNTING.—Section 487(d)(1) 

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

9 1094(d)(1)) is amended— 

10 (1) in subparagraph (A), by striking ‘‘account11 ing,’’ and all that follows and inserting ‘‘account12 ing;’’; 

13 (2) in subparagraph (B), by striking clause (iii) 

14 and inserting the following new clause: 

15 ‘‘(iii) a contractual arrangement with 

16 a Federal agency for the purpose of pro17 viding job training to low-income individ18 uals who are in need of such training;’’; 

19 (3) in subparagraph (C)— 


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1 (A) by striking clauses (i) through (iii) and 

2 inserting the following new clause: 

3 ‘‘(i) grant funds provided by a source 

4 that has no affiliation with the institution 

5 and shares no employees with the institu6 tion;’’; and 

7 (B) by redesignating clause (iv) as clause 

8 (ii); and 

9 (4) by striking subparagraphs (D) and (E) and 

10 inserting the following new subparagraphs: 

11 ‘‘(D) include no loans made by an institu12 tion of higher education as revenue to the 

13 school, except for payments made by students 

14 on such loans; 

15 ‘‘(E) include a scholarship provided by the 

16 institution— 

17 ‘‘(i) only if the scholarship is in the 

18 form of monetary aid based upon the aca19 demic achievements or financial need of 

20 students, disbursed to qualified student re21 cipients during each fiscal year from an es22 tablished restricted account; and 

23 ‘‘(ii) only to the extent that funds in 

24 that account represent designated funds, 

25 or income earned on such funds, from a 


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1 source that has no affiliation with the in2 stitution and shares no employees with the 

3 institution; and’’. 

4 (c) EFFECTIVE DATE.—The amendments made by 

5 this section shall take effect 1 year after the date of enact6 ment of this Act. 

7 SEC. 3. DEFINITIONS. 

8 (a) IN GENERAL.—Section 103 of the Higher Edu9 cation Act of 1965 (20 U.S.C. 1003) is amended— 

10 (1) by redesignating paragraphs (4) through 

11 (9), (10) through (14), and (15) through (24), as 

12 paragraphs (5) through (10), (12) through (16), and 

13 (18) through (26), respectively; 

14 (2) by inserting after paragraph (3) the fol15 lowing new paragraph: 

16 ‘‘(4) DEFAULT MANIPULATION.—The term ‘de17 fault manipulation’ means engaging in a device or 

18 practice, including branching, consolidation of cam19 puses, consolidation or manipulation of the identi20 fication codes used by the Office of Postsecondary 

21 Education to designate campuses and institutions, 

22 change of ownership or control, serial forbearance, 

23 or any similar device or practice (as determined by 

24 the Secretary) when, but for the device or practice, 

25 one or more campuses of an institution of higher 


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1 education would be at risk of cohort default rate 

2 sanctions under section 435 or student default risk 

3 sanctions under section 489A.’’; 

4 (3) by inserting after paragraph (10), as redes5 ignated by paragraph (1) of this section, the fol6 lowing new paragraph: 

7 ‘‘(11) FEDERAL EDUCATIONAL ASSISTANCE

8 FUNDS.—The term ‘Federal educational assistance 

9 funds’ means any Federal financial assistance pro10 vided, under this Act or any other Federal law, 

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

12 insurance, or other means to an institution of higher 

13 education, including Federal financial assistance 

14 that is disbursed or delivered to an institution or on 

15 behalf of a student or to a student to be used to at16 tend the institution, except that such term shall not 

17 include any monthly housing stipend provided under 

18 the Post-9/11 Veterans Educational Assistance Pro19 gram under chapter 33 of title 38, United States 

20 Code.’’; and 

21 (4) by inserting after paragraph (16), as redes22 ignated by paragraph (1) of this section, the fol23 lowing new paragraph: 

24 ‘‘(17) RECRUITING AND MARKETING ACTIV25 ITY.— 


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1 ‘‘(A) IN GENERAL.—Except as provided in 

2 subparagraph (B), the term ‘recruiting and 

3 marketing activity’ means an activity that con4 sists of any of the following: 

5 ‘‘(i) Any advertising or promotion ac6 tivity, including a paid announcement in 

7 newspapers, magazines, radio, television, 

8 billboards, electronic media, naming rights, 

9 or any other public medium of communica10 tion, including paying for a display or pro11 motion at a job fair, military installation, 

12 or postsecondary education recruiting 

13 event. 

14 ‘‘(ii) Any effort to identify and attract 

15 prospective students, directly or through a 

16 contractor or other third party, including 

17 any contact concerning a prospective stu18 dent’s potential enrollment or application 

19 for grant, loan, or work assistance under 

20 title IV or participation in preadmission or 

21 advising activities, including— 

22 ‘‘(I) paying employees responsible 

23 for overseeing enrollment and for con24 tacting potential students in person, 

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1 munications, or by other means, re2 garding enrollment; 

3 ‘‘(II) compensating a person to 

4 provide to an institution of higher 

5 education contact information regard6 ing prospective students, including in7 formation obtained through websites 

8 established for such purpose; and 

9 ‘‘(III) providing funds to a third 

10 party to create or maintain a website 

11 for the purpose of obtaining contact 

12 information regarding prospective stu13 dents. 

14 ‘‘(iii) Any other activity as the Sec15 retary may determine. 

16 ‘‘(B) EXCEPTION.—An activity that is re17 quired as a condition of receipt of funds by an 

18 institution under title IV, or under another ap19 plicable Federal law, shall not be considered to 

20 be a recruiting and marketing activity under 

21 subparagraph (A).’’. 

22 (b) TITLE IV PROGRAMS.—Section 481 of the Higher 

23 Education Act of 1965 (20 U.S.C. 1088) is amended by 

24 adding at the end the following new subsection: 


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1 ‘‘(g) STUDENT DEFAULT RISK.—In this title, the 

2 term ‘student default risk’ means the percentage that is 

3 calculated by taking an institution’s cohort default rate 

4 (as defined in section 435(m)) for the most recent fiscal 

5 year available, and multiplying it by the percentage of stu6 dents enrolled at such institution receiving a loan made, 

7 insured, or guaranteed under this title during the previous 

8 academic year.’’. 

9 SEC. 4. RESTRICTION ON MARKETING WITH FEDERAL EDU10 CATIONAL ASSISTANCE FUNDS. 

11 (a) REPEAL OF EXISTING PROVISION.—The Higher 

12 Education Opportunity Act is amended by striking section 

13 119 (20 U.S.C. 1011m). 

14 (b) INSERTION IN HIGHER EDUCATION ACT OF 1965 

15 AND AMENDMENTS.—Part B of title I of the Higher Edu16 cation Act of 1965 (20 U.S.C. 1011 et seq.) is amended 

17 by adding at the end the following new section: 

18 ‘‘SEC. 124. CERTIFICATION REGARDING THE USE OF CER19 TAIN FEDERAL FUNDS AND RESTRICTIONS 

20 ON SOURCES OF FUNDS FOR RECRUITING 

21 AND MARKETING ACTIVITIES. 

22 ‘‘(a) PROHIBITION.—No Federal funds received 

23 under this Act by an institution of higher education or 

24 other postsecondary educational institution may be used 

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1 ence an officer or employee of any agency, a Member of 

2 Congress, an officer or employee of Congress, or an em3 ployee of a Member of Congress in connection with any 

4 Federal action described in subsection (b). 

5 ‘‘(b) APPLICABILITY.—The prohibition in subsection 

6 (a) applies with respect to the following Federal actions: 

7 ‘‘(1) The awarding of any Federal contract. 

8 ‘‘(2) The making of any Federal grant. 

9 ‘‘(3) The making of any Federal loan. 

10 ‘‘(4) The entering into of any Federal coopera11 tive agreement. 

12 ‘‘(5) The extension, continuation, renewal, 

13 amendment, or modification of any Federal contract, 

14 grant, loan, or cooperative agreement. 

15 ‘‘(c) LOBBYING AND EARMARKS.—No Federal stu16 dent aid funding under this Act may be used to hire a 

17 registered lobbyist or pay any person or entity for securing 

18 an earmark. 

19 ‘‘(d) RESTRICTIONS ON SOURCES OF FUNDS FOR RE20 CRUITING AND MARKETING ACTIVITIES.— 

21 ‘‘(1) IN GENERAL.—An institution of higher 

22 education, or other postsecondary educational insti23 tution, may not use revenues derived from Federal 

24 educational assistance funds for recruiting or mar25 keting activities. 


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1 ‘‘(2) RULE OF CONSTRUCTION.—Nothing in 

2 this section shall be construed as a limitation on the 

3 use by an institution of revenues derived from 

4 sources other than Federal educational assistance 

5 funds. 

6 ‘‘(3) REPORTS.—Each institution of higher 

7 education, or other postsecondary educational insti8 tution, that derives 65 percent or more of revenues 

9 from Federal educational assistance funds shall re10 port annually to the Secretary and to Congress and 

11 shall include in such report— 

12 ‘‘(A) a statement of the institution’s ex13 penditures on advertising, marketing, and re14 cruiting; and 

15 ‘‘(B) a verification from an independent 

16 auditor that the institution is in compliance 

17 with the requirements of this subsection. 

18 ‘‘(e) CERTIFICATION.—Each institution of higher 

19 education or other postsecondary educational institution 

20 receiving Federal funding under this Act, as a condition 

21 for receiving such funding, shall annually certify to the 

22 Secretary of Education that the requirements of sub23 sections (a) through (d) have been met. 

24 ‘‘(f) ACTIONS TO IMPLEMENT AND ENFORCE.—The 

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1 sure that the provisions of this section are implemented 

2 and enforced.’’. 

3 SEC. 5. WHISTLEBLOWER PROTECTIONS FOR PERSONS AS4 SOCIATED WITH INSTITUTIONS OF HIGHER 

5 EDUCATION. 

6 (a) WHISTLEBLOWER PROTECTION PROGRAM.—Title 

7 I of the Higher Education Act of 1965 is amended by in8 serting after section 123 (20 U.S.C. 1011l) the following 

9 new section: 

10 ‘‘SEC. 124. PROTECTION FROM RETALIATION FOR DISCLO11 SURE OF CERTAIN INFORMATION BY PER12 SONS ASSOCIATED WITH INSTITUTIONS OF 

13 HIGHER EDUCATION. 

14 ‘‘(a) PROHIBITION OF RETALIATION.— 

15 ‘‘(1) IN GENERAL.—An institution of higher 

16 education participating in programs under title IV 

17 (in this section referred to as an ‘institution’) may 

18 not discharge, demote, or otherwise discriminate 

19 against any person as retaliation for— 

20 ‘‘(A) such person disclosing to an indi21 vidual or entity described in paragraph (2) in22 formation such person reasonably believes evi23 dences a violation of any law, rule, or regulation 

24 by the institution; or 


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1 ‘‘(B) assisting a person disclosing such in2 formation or providing information or docu3 ments for use in disclosing such information. 

4 ‘‘(2) INDIVIDUALS AND ENTITIES COVERED.— 

5 The individuals and entities described in this para6 graph are: 

7 ‘‘(A) A Member of Congress or a rep8 resentative of a committee of Congress. 

9 ‘‘(B) An Executive agency (as defined in 

10 section 105 of title 5, United States Code). 

11 ‘‘(C) The Government Accountability Of12 fice. 

13 ‘‘(D) A law enforcement agency. 

14 ‘‘(E) A court or grand jury. 

15 ‘‘(F) A management official or other em16 ployee of an institution who has the responsi17 bility to investigate, discover, or address mis18 conduct. 

19 ‘‘(b) INVESTIGATION OF COMPLAINTS.— 

20 ‘‘(1) SUBMISSION OF COMPLAINT.—A person 

21 who believes that they have been subjected to a re22 taliation prohibited by subsection (a) may submit a 

23 complaint to the Inspector General of the Depart24 ment of Education (in this section referred to as the 

25 ‘Inspector General’). Unless the Inspector General 


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1 determines that the complaint is frivolous, fails to 

2 allege a violation of subsection (a), or has previously 

3 been addressed in another Federal or State judicial 

4 or administrative proceeding initiated by the com5 plainant, the Inspector General shall investigate the 

6 complaint and, upon completion of such investiga7 tion, submit a report of the findings of the investiga8 tion to the complainant, the institution concerned, 

9 and the Secretary. 

10 ‘‘(2) INSPECTOR GENERAL ACTION.— 

11 ‘‘(A) DETERMINATION OR SUBMISSION OF

12 REPORT ON FINDINGS.—Except as provided 

13 under subparagraph (B), the Inspector General 

14 shall make a determination that a complaint is 

15 frivolous, fails to allege a violation of subsection 

16 (a), or has previously been addressed in another 

17 Federal or State judicial or administrative pro18 ceeding initiated by the complainant or submit 

19 a report under paragraph (1) not later than 

20 180 days after receiving the complaint. 

21 ‘‘(B) EXTENSION OF TIME.—If the Inspec22 tor General is unable to complete an investiga23 tion in time to submit a report within the 180- 

24 day period specified in subparagraph (A) and 

25 the complainant agrees to an extension of time, 


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1 the Inspector General shall submit a report 

2 under paragraph (1) within such additional pe3 riod of time, up to 180 days, as shall be agreed 

4 upon between the Inspector General and the 

5 complainant. 

6 ‘‘(3) PROHIBITION ON DISCLOSURE.—The In7 spector General may not respond to any inquiry or 

8 disclose any information from or about any person 

9 alleging retaliation, except to the extent that such 

10 response or disclosure is— 

11 ‘‘(A) made with the consent of the person 

12 alleging the retaliation; 

13 ‘‘(B) made in accordance with the provi14 sions of section 552a of title 5, United States 

15 Code, or as required by any other applicable 

16 Federal law; or 

17 ‘‘(C) necessary to conduct an investigation 

18 of the alleged retaliation. 

19 ‘‘(4) TIME LIMITATION.—A complaint may not 

20 be brought under this subsection more than three 

21 years after the date on which the alleged retaliation 

22 took place. 

23 ‘‘(c) REMEDY AND ENFORCEMENT AUTHORITY.— 

24 ‘‘(1) IN GENERAL.—Not later than 30 days 

25 after receiving an Inspector General report pursuant 


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1 to subsection (b), the Secretary shall determine 

2 whether there is sufficient basis to conclude that the 

3 institution has violated subsection (a) and shall ei4 ther issue an order denying relief or shall take one 

5 or more of the following actions: 

6 ‘‘(A) Order the institution to take action to 

7 abate the retaliation. 

8 ‘‘(B) Order the institution to reinstate the 

9 complainant to the position that the complain10 ant held before the retaliation, together with 

11 compensatory damages (including back pay) 

12 and any other benefits, terms, or conditions 

13 that would apply to the complainant in that po14 sition if the retaliation had not occurred. 

15 ‘‘(C) Order the institution to pay the com16 plainant an amount equal to the aggregate 

17 amount of all costs and expenses (including at18 torneys’ fees and expert witness fees) that were 

19 reasonably incurred by the complainant for, or 

20 in connection with, bringing the complaint re21 garding the retaliation, as determined by the 

22 Secretary. 

23 ‘‘(2) EXHAUSTION OF REMEDIES.—If the Sec24 retary issues an order denying relief under para25 graph (1) or has not issued an order within 210 


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1 days after the submission of a complaint under sub2 section (b), or in the case of an extension of time 

3 under subsection (b)(2)(B), not later than 30 days 

4 after the expiration of the extension of time, and 

5 there is no showing that such delay is due to the bad 

6 faith of the complainant, the complainant shall be 

7 deemed to have exhausted all administrative rem8 edies with respect to the complaint, and the com9 plainant may bring a de novo action at law or equity 

10 against the institution to seek compensatory dam11 ages and other relief available under this section in 

12 the appropriate district court of the United States, 

13 which shall have jurisdiction over such an action 

14 without regard to the amount in controversy. Such 

15 an action shall, at the request of either party to the 

16 action, be tried by the court with a jury. An action 

17 under this paragraph may not be brought more than 

18 two years after the date on which remedies are 

19 deemed to have been exhausted. 

20 ‘‘(3) ADMISSIBILITY OF EVIDENCE.—The In21 spector General determination and order of the Sec22 retary denying relief under paragraph (2) shall be 

23 admissible in evidence in any de novo action at law 

24 or equity brought pursuant to this subsection. 


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1 ‘‘(4) ENFORCEMENT OF ORDERS.—Whenever a 

2 person fails to comply with an order issued under 

3 paragraph (1), the Secretary shall file an action for 

4 enforcement of such order in the United States dis5 trict court for a district in which the retaliation was 

6 found to have occurred. In any action brought under 

7 this paragraph, the court may grant appropriate re8 lief, including injunctive relief, compensatory and ex9 emplary damages, and attorneys’ fees and costs. The 

10 person upon whose behalf an order was issued may 

11 also file such an action or join in an action filed by 

12 the Secretary. 

13 ‘‘(5) JUDICIAL REVIEW.—Any person adversely 

14 affected or aggrieved by an order issued under para15 graph (1) may obtain review of the order’s conform16 ance with this subsection, and any regulations issued 

17 to carry out this section, in the United States court 

18 of appeals for a circuit in which the retaliation is al19 leged in the order to have occurred. No petition 

20 seeking such review may be filed more than 60 days 

21 after issuance of the order by the head of the execu22 tive agency. Such review shall conform to chapter 7 

23 of title 5, United States Code. Filing such an appeal 

24 shall not act to stay the enforcement of the order of 


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1 the Secretary, unless a stay is specifically entered by 

2 the court. 

3 ‘‘(6) BURDENS OF PROOF.—The legal burdens 

4 of proof specified in section 1221(e) of title 5, 

5 United States Code, shall be controlling for the pur6 poses of any investigation conducted by the Inspec7 tor General, decision by the Secretary, or judicial or 

8 administrative proceeding to determine whether dis9 crimination prohibited under this section has oc10 curred. 

11 ‘‘(7) RIGHTS AND REMEDIES NOT WAIVABLE.— 

12 The rights and remedies provided for in this section 

13 may not be waived by any agreement, policy, form, 

14 or condition of employment. 

15 ‘‘(d) NOTIFICATION OF PERSONS ASSOCIATED WITH

16 INSTITUTION.—The Secretary shall ensure that each insti17 tution informs the employees, students, and contractors 

18 of the institution in writing of the rights and remedies 

19 provided under this section. 

20 ‘‘(e) CONSTRUCTION.—Nothing in this section may 

21 be construed to authorize the discharge of, demotion of, 

22 or discrimination against a person for a disclosure other 

23 than a disclosure protected by subsection (a) or to modify 

24 or derogate from a right or remedy otherwise available 

25 such person.’’. 


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1 (b) PROHIBITION OF RETALIATION.—Section 487(a) 

2 of the Higher Education Act of 1965 (20 U.S.C. 1094(a)) 

3 is amended by adding at the end the following new para4 graph: 

5 ‘‘(30) The institution will comply with the re6 quirements of section 124.’’. 

7 SEC. 6. ESTABLISHMENT OF COMPLAINT RESOLUTION AND 

8 TRACKING SYSTEM. 

9 Title I of the Higher Education Act of 1965 (20 

10 U.S.C. 1001 et seq.) is amended by adding at the end 

11 the following new part: 

12 ‘‘PART F—COMPLAINT TRACKING SYSTEM 

13 ‘‘SEC. 161. COMPLAINT TRACKING SYSTEM. 

14 ‘‘(a) ESTABLISHMENT OF COMPLAINT TRACKING

15 SYSTEM.— 

16 ‘‘(1) ESTABLISHMENT OF COMPLAINT TRACK17 ING SYSTEM.—Not later than 1 year after the enact18 ment of the PRO Students Act, the Secretary shall 

19 complete the establishment of a complaint tracking 

20 system that includes a single, toll-free telephone 

21 number and a website to facilitate the centralized 

22 collection of, monitoring of, and response to com23 plaints or inquiries regarding the educational prac24 tices and services, and recruiting and marketing 


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1 practices, of all postsecondary educational institu2 tions. 

3 ‘‘(2) ESTABLISHMENT OF COMPLAINT TRACK4 ING OFFICE.—The Secretary shall establish within 

5 the Department an office whose functions shall in6 clude establishing, administering, and disseminating 

7 widely information about the complaint tracking sys8 tem established under paragraph (1). The Secretary 

9 shall— 

10 ‘‘(A) to the extent necessary, combine and 

11 consolidate the other offices and functions of 

12 the Department to ensure that the office estab13 lished under this paragraph is the single point 

14 of contact for students and borrowers with com15 plaints; and 

16 ‘‘(B) to the extent practicable, ensure that 

17 the office established in this paragraph will 

18 work with the Student Loan Ombudsman ap19 pointed in accordance with section 141(f) to as20 sist borrowers that have complaints regarding 

21 the educational practices and services, and re22 cruiting and marketing practices, of postsec23 ondary educational institutions. 

24 ‘‘(b) HANDLING OF COMPLAINTS.— 


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1 ‘‘(1) TIMELY RESPONSE TO COMPLAINTS.—The 

2 Secretary shall establish, in consultation with the 

3 heads of appropriate agencies, reasonable procedures 

4 to provide a timely response to complainants, in 

5 writing where appropriate, to complaints against, or 

6 inquiries concerning, an institution of higher edu7 cation that receives funds under this Act. Each re8 sponse shall include a description of— 

9 ‘‘(A) the steps that have been taken by the 

10 Secretary in response to the complaint or in11 quiry; 

12 ‘‘(B) any responses received by the Sec13 retary from the institution of higher education; 

14 and 

15 ‘‘(C) any additional actions that the Sec16 retary has taken, or plans to take, in response 

17 to the complaint or inquiry. 

18 ‘‘(2) TIMELY RESPONSE TO SECRETARY BY IN19 STITUTION OF HIGHER EDUCATION.—The Secretary 

20 shall notify each institution of higher education that 

21 receives funds under this Act and that is the subject 

22 of a complaint or inquiry under this section regard23 ing the complaint or inquiry. Not later than 60 days 

24 after receiving such notice, such institution shall 


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1 provide a response to the Secretary concerning the 

2 complaint or inquiry, including— 

3 ‘‘(A) the steps that have been taken by the 

4 institution to respond to the complaint or in5 quiry; 

6 ‘‘(B) all responses received by the institu7 tion from the complainant; and 

8 ‘‘(C) any additional actions that the insti9 tution has taken, or plans to take, in response 

10 to the complaint or inquiry. 

11 ‘‘(3) FURTHER INVESTIGATION.—The Secretary 

12 may, in the event that the complaint is not ade13 quately resolved or addressed by the responses of the 

14 institution of higher education receiving funds under 

15 this Act under paragraph (2), ask additional ques16 tions of such institution or seek additional informa17 tion from or action by the institution. 

18 ‘‘(4) PROVISION OF INFORMATION.— 

19 ‘‘(A) IN GENERAL.—An institution of high20 er education that receives funds under this Act 

21 shall, in a timely manner, comply with a re22 quest by the Secretary for information in the 

23 control or possession of such institution con24 cerning a complaint or inquiry received by the 

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1 porting written documentation, subject to sub2 paragraph (B). 

3 ‘‘(B) EXCEPTIONS.—An institution of 

4 higher education that receives funds under this 

5 Act shall not be required to make available 

6 under this subsection— 

7 ‘‘(i) any nonpublic or confidential in8 formation, including any confidential com9 mercial information; 

10 ‘‘(ii) any information collected by the 

11 institution for the purpose of preventing 

12 fraud or detecting or making any report 

13 regarding other unlawful or potentially un14 lawful conduct; or 

15 ‘‘(iii) any information required to be 

16 kept confidential by any other provision of 

17 law. 

18 ‘‘(5) COMPLIANCE.—An institution of higher 

19 education that receives funds under this Act shall 

20 comply with the requirements to provide responses 

21 and information, in accordance with this subsection, 

22 as a condition of receiving such funds. 

23 ‘‘(c) TRANSPARENCY.— 

24 ‘‘(1) SHARING INFORMATION WITH FEDERAL

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1 cordance with section 444 of the General Education 

2 Provisions Act (20 U.S.C. 1232g) (commonly re3 ferred to as the ‘‘Family Educational Rights and 

4 Privacy Act of 1974’’) and other laws, the Secretary 

5 shall coordinate with the heads of relevant Federal 

6 and State agencies to— 

7 ‘‘(A) collect complaints related to the com8 plaint tracking system described in subsection 

9 (b) from such agencies; and 

10 ‘‘(B) when appropriate, route such com11 plaints to the Department of Education, the 

12 Department of Justice, the Department of De13 fense, the Department of Veterans Affairs, the 

14 Federal Trade Commission, the Consumer Fi15 nancial Protection Bureau, or any equivalent 

16 State agency. 

17 ‘‘(2) INTERACTION WITH EXISTING COMPLAINT

18 SYSTEMS.—To the extent practicable, all procedures 

19 established under this section, and all coordination 

20 carried out under paragraph (1), shall be done in ac21 cordance with the complaint tracking systems estab22 lished under Executive Order 13607 (77 Fed. Reg. 

23 25861; relating to establishing principles of excel24 lence for educational institutions serving 


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1 servicemembers, veterans, spouses, and other family 

2 members). 

3 ‘‘(3) PUBLIC INFORMATION.— 

4 ‘‘(A) IN GENERAL.—The Secretary shall 

5 regularly publish on the website of the Depart6 ment information on the complaints and inquir7 ies received for each postsecondary educational 

8 institution under this section, including— 

9 ‘‘(i) the number of complaints and in10 quiries received; 

11 ‘‘(ii) the types of complaints and in12 quiries received; and 

13 ‘‘(iii) where applicable, information 

14 about the resolution of the complaints and 

15 inquiries. 

16 ‘‘(B) DATA PRIVACY.—In carrying out sub17 paragraph (A), the Secretary shall— 

18 ‘‘(i) comply with applicable data pri19 vacy laws and regulations; and 

20 ‘‘(ii) ensure that personally identifi21 able information is not shared. 

22 ‘‘(4) REPORTS.—Each year, the Secretary shall 

23 prepare and submit to the authorizing committees a 

24 report describing— 


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1 ‘‘(A) the types and nature of complaints 

2 the Secretary has received under this section; 

3 ‘‘(B) the extent to which complainants are 

4 receiving relief pursuant to this section; 

5 ‘‘(C) whether particular types of com6 plaints are more common in a given sector of 

7 postsecondary educational institutions; 

8 ‘‘(D) any legislative recommendations that 

9 the Secretary determines are necessary to bet10 ter assist students and families; and 

11 ‘‘(E) the schools with the highest volume 

12 of complaints, as determined by the Secretary. 

13 ‘‘(d) COMPLAINANT DEFINED.—In this section, the 

14 term ‘complainant’ means a person with a complaint 

15 against, or inquiry concerning, an institution of higher 

16 education that receives funds under this Act who is— 

17 ‘‘(1) a student of a postsecondary educational 

18 institution; 

19 ‘‘(2) a family member of a student of a postsec20 ondary educational institution; 

21 ‘‘(3) a third party acting on behalf of a student 

22 of a postsecondary educational institution; or 

23 ‘‘(4) a staff member or employee of a postsec24 ondary educational institution.’’. 


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1 SEC. 7. PROPRIETARY EDUCATION OVERSIGHT COORDINA2 TION COMMITTEE. 

3 Title I of the Higher Education Act of 1965 (20 

4 U.S.C. 1001 et seq.), as amended by section 6 of this Act, 

5 is further amended by adding at the end the following new 

6 part: 

7 ‘‘PART G—PROPRIETARY EDUCATION 

8 OVERSIGHT COORDINATION IMPROVEMENT 

9 ‘‘SEC. 166. DEFINITIONS. 

10 ‘‘In this part: 

11 ‘‘(1) EXECUTIVE OFFICER.—The term ‘execu12 tive officer’, with respect to a proprietary institution 

13 of higher education that is a publicly traded corpora14 tion, means— 

15 ‘‘(A) the president of such corporation; 

16 ‘‘(B) a vice president of such corporation 

17 who is in charge of a principal business unit, di18 vision, or function of such corporation (includ19 ing sales, administration, or finance); or 

20 ‘‘(C) any other officer or person who per21 forms a policy making function for such cor22 poration. 

23 ‘‘(2) PROPRIETARY INSTITUTION OF HIGHER

24 EDUCATION.—The term ‘proprietary institution of 

25 higher education’ has the meaning given the term in 

26 section 102(b). 


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1 ‘‘(3) STATE APPROVAL AGENCY.—The term 

2 ‘State approval agency’ means any State agency that 

3 determines whether an institution of higher edu4 cation is legally authorized within such State to pro5 vide a program of education beyond secondary edu6 cation. 

7 ‘‘(4) VETERANS SERVICE ORGANIZATION.—The 

8 term ‘veterans service organization’ means an orga9 nization recognized by the Secretary of Veterans Af10 fairs for the representation of veterans under section 

11 5902 of title 38, United States Code. 

12 ‘‘SEC. 167. ESTABLISHMENT OF COMMITTEE. 

13 ‘‘(a) ESTABLISHMENT.—There is established a com14 mittee to be known as the ‘Proprietary Education Over15 sight Coordination Committee’ (referred to in this part as 

16 the ‘Committee’) and to be composed of the head (or the 

17 designee of such head) of each of the following: 

18 ‘‘(1) The Department of Education. 

19 ‘‘(2) The Bureau of Consumer Financial Pro20 tection. 

21 ‘‘(3) The Department of Justice. 

22 ‘‘(4) The Securities and Exchange Commission. 

23 ‘‘(5) The Department of Defense. 

24 ‘‘(6) The Department of Veterans Affairs. 

25 ‘‘(7) The Federal Trade Commission. 


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1 ‘‘(8) The Department of Labor. 

2 ‘‘(9) The Internal Revenue Service. 

3 ‘‘(10) At the discretion of the President, any 

4 other relevant Federal agency or department. 

5 ‘‘(b) DUTIES.—The Committee shall have the fol6 lowing duties: 

7 ‘‘(1) Coordinate Federal oversight of propri8 etary institutions of higher education to— 

9 ‘‘(A) improve enforcement of applicable 

10 Federal laws and regulations; 

11 ‘‘(B) increase accountability of proprietary 

12 institutions of higher education to students and 

13 taxpayers; and 

14 ‘‘(C) ensure the promotion of quality edu15 cation programs. 

16 ‘‘(2) Coordinate Federal activities to protect 

17 students from unfair, deceptive, abusive, unethical, 

18 fraudulent, or predatory practices, policies, or proce19 dures of proprietary institutions of higher education. 

20 ‘‘(3) Encourage information sharing among 

21 agencies related to Federal investigations, audits, or 

22 inquiries of proprietary institutions of higher edu23 cation. 

24 ‘‘(4) Increase coordination and cooperation be25 tween Federal and State agencies, including State 


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1 Attorneys General and State approval agencies, with 

2 respect to improving oversight and accountability of 

3 proprietary institutions of higher education. 

4 ‘‘(5) Develop best practices and consistency 

5 among Federal and State agencies in the dissemina6 tion of consumer information regarding proprietary 

7 institutions of higher education to ensure that stu8 dents, parents, and other stakeholders have easy ac9 cess to such information. 

10 ‘‘(c) MEMBERSHIP.— 

11 ‘‘(1) DESIGNEES.—For any designee described 

12 in subsection (a), the head of the member entity 

13 shall appoint a high-level official who exercises sig14 nificant decisionmaking authority for the oversight 

15 or investigatory activities and responsibilities related 

16 to proprietary institutions of higher education of the 

17 respective Federal entity of such head. 

18 ‘‘(2) CHAIR.—The Secretary of Education or 

19 the designee of the Secretary shall serve as the 

20 Chair of the Committee. 

21 ‘‘(3) COMMITTEE SUPPORT.—The head of each 

22 entity described in subsection (a) shall ensure appro23 priate staff and officials of such entity are available 

24 to support the Committee-related work of such enti25 ty. 


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1 ‘‘SEC. 168. MEETINGS. 

2 ‘‘(a) COMMITTEE MEETINGS.—The members of the 

3 Committee shall meet regularly, but not less than once 

4 during each quarter of each fiscal year, to carry out the 

5 duties described in section 167(b). 

6 ‘‘(b) MEETINGS WITH STATE AGENCIES AND STAKE7 HOLDERS.—The Committee shall meet not less than once 

8 each fiscal year, and shall otherwise interact regularly, 

9 with State Attorneys General, State approval agencies, 

10 veterans service organizations, and consumer advocates to 

11 carry out the duties described in section 167(b). 

12 ‘‘SEC. 169. REPORT. 

13 ‘‘(a) IN GENERAL.—The Committee shall annually 

14 submit to the authorizing committees, and any other com15 mittee of Congress that the Committee determines appro16 priate, a report on the activities of the Committee. 

17 ‘‘(b) PUBLIC ACCESS.—Each report described in sub18 section (a) shall be made available to the public in a man19 ner that is easily accessible to parents, students, and other 

20 stakeholders in accordance with the best practices devel21 oped under section 167(b)(5). 

22 ‘‘(c) CONTENTS.— 

23 ‘‘(1) IN GENERAL.—Each report under sub24 section (a) shall include— 


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1 ‘‘(A) an accounting of any action taken by 

2 the Federal Government, any member entity of 

3 the Committee, or a State— 

4 ‘‘(i) to enforce Federal or State laws 

5 and regulations applicable to proprietary 

6 institutions of higher education; 

7 ‘‘(ii) to hold proprietary institutions of 

8 higher education accountable to students 

9 and taxpayers; and 

10 ‘‘(iii) to promote quality education 

11 programs; 

12 ‘‘(B) a summary of complaints against 

13 each proprietary institution of higher education 

14 received by any member entity of the Com15 mittee; 

16 ‘‘(C) the data described in paragraph (2) 

17 and any other data relevant to proprietary insti18 tutions of higher education that the Committee 

19 determines appropriate; and 

20 ‘‘(D) recommendations of the Committee 

21 for such legislative and administrative actions 

22 as the Committee determines are necessary 

23 to— 

24 ‘‘(i) improve enforcement of applicable 

25 Federal laws; 


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1 ‘‘(ii) increase accountability of propri2 etary institutions of higher education to 

3 students and taxpayers; and 

4 ‘‘(iii) ensure the promotion of quality 

5 education programs. 

6 ‘‘(2) DATA.— 

7 ‘‘(A) INDUSTRY-WIDE DATA.—Each report 

8 under subsection (a) shall include data on all 

9 proprietary institutions of higher education that 

10 consists of information regarding— 

11 ‘‘(i) the total amount of Federal funds 

12 provided to proprietary institutions of 

13 higher education during the previous aca14 demic year; 

15 ‘‘(ii) the percentage of the total 

16 amount of Federal funds provided to insti17 tutions of higher education (as defined in 

18 section 102) for such previous academic 

19 year that were provided to proprietary in20 stitutions of higher education for such pre21 vious academic year; 

22 ‘‘(iii) the total amount of Federal 

23 funds that proprietary institutions of high24 er education disbursed or delivered, on be25 half of a student, or to a student to be 


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1 used to attend an institution of higher edu2 cation, for the previous academic year, 

3 disaggregated by— 

4 ‘‘(I) educational assistance in the 

5 form of a loan provided under title IV; 

6 ‘‘(II) educational assistance in 

7 the form of a grant provided under 

8 title IV; 

9 ‘‘(III) educational assistance pro10 vided under chapter 33 of title 38, 

11 United States Code; 

12 ‘‘(IV) tuition assistance provided 

13 under section 2007 of title 10, United 

14 States Code; 

15 ‘‘(V) assistance provided under 

16 section 1784a of title 10, United 

17 States Code; and 

18 ‘‘(VI) Federal funds not de19 scribed in subclauses (I) through (V); 

20 ‘‘(iv) the percentage of the total 

21 amount of Federal funds provided to insti22 tutions of higher education (as defined in 

23 section 102) for such previous academic 

24 year for each of the programs described in 

25 subclauses (I) through (V) of clause (iii) 


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1 that were provided to proprietary institu2 tions of higher education for such previous 

3 academic year for each of such programs; 

4 ‘‘(v) the average retention and grad5 uation rates for students pursuing a degree 

6 at proprietary institutions of higher edu7 cation; 

8 ‘‘(vi) the average cohort default rate 

9 (as defined in section 435(m)) for propri10 etary institutions of higher education, and 

11 an annual list of cohort default rates (as 

12 defined in such section) for all proprietary 

13 institutions of higher education; 

14 ‘‘(vii) for careers requiring the pas15 sage of a licensing examination— 

16 ‘‘(I) the passage rate of individ17 uals who attended a proprietary insti18 tution of higher education taking such 

19 examination to pursue such a career; 

20 and 

21 ‘‘(II) the passage rate of all indi22 viduals taking such exam to pursue 

23 such a career; and 


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1 ‘‘(viii) the use of private education 

2 loans at proprietary institutions of higher 

3 education that includes— 

4 ‘‘(I) an estimate of the total 

5 number of such loans; and 

6 ‘‘(II) information on the average 

7 debt, default rate, and interest rate of 

8 such loans. 

9 ‘‘(B) DATA ON PUBLICLY TRADED COR10 PORATIONS.— 

11 ‘‘(i) IN GENERAL.—Each report under 

12 subsection 9(a) shall include data on pro13 prietary institutions of higher education 

14 that are publicly traded corporations, con15 sisting of information on— 

16 ‘‘(I) any pre-tax profit of such 

17 proprietary institutions of higher edu18 cation— 

19 ‘‘(aa) reported as a total 

20 amount and an average percent21 age of revenue for all such pro22 prietary institutions of higher 

23 education; and 


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1 ‘‘(bb) reported for each such 

2 proprietary institution of higher 

3 education; 

4 ‘‘(II) revenue for such propri5 etary institutions of higher education 

6 spent on recruiting and marketing ac7 tivities, student instruction, and stu8 dent support services, reported— 

9 ‘‘(aa) as a total amount and 

10 an average percentage of revenue 

11 for all such proprietary institu12 tions of higher education; and 

13 ‘‘(bb) for each such propri14 etary institution of higher edu15 cation; 

16 ‘‘(III) total compensation pack17 ages of the executive officers of each 

18 such proprietary institution of higher 

19 education; and 

20 ‘‘(IV) a list of institutional loan 

21 programs offered by each such propri22 etary institution of higher education 

23 that includes information on the de24 fault and interest rates of such pro25 grams. 


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1 ‘‘(ii) DISAGGREGATED BY OWNER2 SHIP.—Each report under subsection (a) 

3 shall include data on proprietary institu4 tions of higher education that are publicly 

5 traded corporations, disaggregated by cor6 porate or parent entity, brand name, and 

7 campus, consisting of— 

8 ‘‘(I) the total cost of attendance 

9 for each program at each such propri10 etary institution of higher education, 

11 and information comparing such total 

12 cost for each such program to— 

13 ‘‘(aa) the average cost of at14 tendance for each program at 

15 public institutions of higher edu16 cation; and 

17 ‘‘(bb) the average total cost 

18 of attendance for each program 

19 at all nonprofit institutions of 

20 higher education; 

21 ‘‘(II) total enrollment, disaggre22 gated by— 

23 ‘‘(aa) individuals enrolled in 

24 programs taken online; and 


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1 ‘‘(bb) individuals enrolled in 

2 programs that are not taken on3 line; 

4 ‘‘(III) the average retention and 

5 graduation rates for students pur6 suing a degree at such proprietary in7 stitutions of higher education; 

8 ‘‘(IV) the percentage of students 

9 enrolled in such proprietary institu10 tions of higher education who com11 plete a program of such an institution 

12 within— 

13 ‘‘(aa) the standard period of 

14 completion for such program; and 

15 ‘‘(bb) a period that is 150 

16 percent of such standard period 

17 of completion; 

18 ‘‘(V) the total cost of attendance 

19 for each program at such proprietary 

20 institutions of higher education; 

21 ‘‘(VI) the average cohort default 

22 rate, as defined in section 435(m), for 

23 such proprietary institutions of higher 

24 education, and an annual list of co25 hort default rates (as defined in such 


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1 section) for all proprietary institutions 

2 of higher education; 

3 ‘‘(VII) the median educational 

4 debt incurred by students who com5 plete a program at such a proprietary 

6 institution of higher education; 

7 ‘‘(VIII) the median educational 

8 debt incurred by students who start 

9 but do not complete a program at 

10 such a proprietary institution of high11 er education; 

12 ‘‘(IX) the job placement rate for 

13 students who complete a program at 

14 such a proprietary institution of high15 er education and the type of employ16 ment obtained by such students; 

17 ‘‘(X) for careers requiring the 

18 passage of a licensing examination, 

19 the rate of individuals who attended 

20 such a proprietary institution of high21 er education and passed such an ex22 amination; and 

23 ‘‘(XI) the number of complaints 

24 from students enrolled in such propri25 etary institutions of higher education 


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1 who have submitted a complaint to 

2 any member entity of the Committee. 

3 ‘‘(iii) DEPARTMENT OF DEFENSE AND

4 VETERANS AFFAIRS ASSISTANCE.— 

5 ‘‘(I) IN GENERAL.—To the extent 

6 practicable, each report under sub7 section (a) shall provide information 

8 on the data described in clause (ii) for 

9 individuals using, to pay for the costs 

10 of attending such a proprietary insti11 tution of higher education, Federal 

12 funds provided under title 10, United 

13 States Code, or title 38, United States 

14 Code. 

15 ‘‘(II) REVENUE.—Each report 

16 under subsection (a) shall provide in17 formation on the revenue of propri18 etary institutions of higher education 

19 that are publicly traded corporations 

20 that is derived from the Federal funds 

21 described in subclause (I). 

22 ‘‘(C) COMPARISON DATA.—To the extent 

23 practicable, each report under subsection (a) 

24 shall provide information comparing the data 

25 described in subparagraph (B) for proprietary 


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1 institutions of higher education that are pub2 licly traded corporations with such data for 

3 public institutions of higher education disaggre4 gated by State. 

5 ‘‘(3) ACCOUNTING OF ANY ACTION.—For the 

6 purposes of paragraph (1)(A), the term ‘any action’ 

7 shall include— 

8 ‘‘(A) a complaint filed by a Federal or 

9 State agency in a Federal, State, local, or tribal 

10 court; 

11 ‘‘(B) an administrative proceeding by a 

12 Federal or State agency involving noncompli13 ance of any applicable law or regulation; or 

14 ‘‘(C) any other review, audit, or adminis15 trative process by any Federal or State agency 

16 that results in a penalty, suspension, or termi17 nation from any Federal or State program. 

18 ‘‘SEC. 170. WARNING LIST FOR PARENTS AND STUDENTS. 

19 ‘‘(a) IN GENERAL.—Each academic year, the Com20 mittee shall publish a list to be known as the ‘Warning 

21 List for Parents and Students’ to be comprised of propri22 etary institutions of higher education— 

23 ‘‘(1) that have engaged in illegal activity during 

24 the previous academic year as determined by a Fed25 eral or State court; 


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1 ‘‘(2) that have entered into a settlement result2 ing in a monetary payment for an unfair, deceptive, 

3 abusive, unethical, fraudulent, or predatory practice, 

4 policy, or procedure; 

5 ‘‘(3) that have had any higher education pro6 gram withdrawn or suspended; or 

7 ‘‘(4) for which the Committee has sufficient evi8 dence of widespread or systemic unfair, deceptive, 

9 abusive, unethical, fraudulent, or predatory prac10 tices, policies, or procedures that pose a threat to 

11 the academic success, financial security, or general 

12 best interest of students. 

13 ‘‘(b) DETERMINATIONS.—In making a determination 

14 pursuant to subsection (a)(4), the Committee may con15 sider evidence that includes the following: 

16 ‘‘(1) Any consumer complaint collected by any 

17 member entity of the Committee. 

18 ‘‘(2) Any complaint filed by a Federal or State 

19 agency in a Federal, State, local, or tribal court. 

20 ‘‘(3) Any administrative proceeding by a Fed21 eral or State agency involving noncompliance of any 

22 applicable law or regulation. 

23 ‘‘(4) Any other review, audit, or administrative 

24 process by any Federal or State agency that results 


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1 in a penalty, suspension, or termination from any 

2 Federal or State program. 

3 ‘‘(5) Data or information submitted by a pro4 prietary institution of higher education to any ac5 crediting agency or association recognized by the 

6 Secretary of Education pursuant to section 496 or 

7 the findings or adverse actions of any such accred8 iting agency or association. 

9 ‘‘(6) Information submitted by a proprietary in10 stitution of higher education to any member entity 

11 of the Committee. 

12 ‘‘(7) Any other evidence that the Committee de13 termines relevant in making a determination pursu14 ant to subsection (a)(4). 

15 ‘‘(c) PUBLICATION.— 

16 ‘‘(1) IN GENERAL.—Not later than July 1 of 

17 each fiscal year, the Committee shall publish the list 

18 described in subsection (a) prominently and in a 

19 manner that is easily accessible to parents, students, 

20 and other stakeholders in accordance with any best 

21 practices developed under section 167(b)(5). 

22 ‘‘(2) NOTICE OF SELF REPORTING.—In pub23 lishing the list in accordance with paragraph (1), the 

24 Committee shall note each institution that is inVerDate Sep 11 2014 04:14 Jul 03, 2019 Jkt 089200 PO 00000 Frm 00044 Fmt 6652 Sfmt 6201 E:\BILLS\H3487.IH H3487

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1 cluded on the list due to an act described in sub2 section (a) that was reported by such institution.’’. 

3 SEC. 8. IMPROVED DETERMINATION OF COHORT DEFAULT 

4 RATES; PUBLICATION OF DEFAULT PREVEN5 TION PLAN. 

6 Section 435 of the Higher Education Act of 1965 (20 

7 U.S.C. 1085) is amended— 

8 (1) in subsection (a)— 

9 (A) in paragraph (2), by adding at the end 

10 the following new subparagraph: 

11 ‘‘(D) In any case where the Secretary has de12 termined that the institution has engaged in default 

13 manipulation, the Secretary— 

14 ‘‘(i) shall recalculate the cohort default 

15 rate for the institution under this section using 

16 corrected data and information, for all fiscal 

17 years for which the default manipulation has 

18 occurred; and 

19 ‘‘(ii) using the recalculated cohort default 

20 rate, shall redetermine under subsection (a)(2) 

21 whether the institution is ineligible to partici22 pate in a program under this title.’’; and 

23 (B) in paragraph (7)(A), by adding at the 

24 end the following new clause: 


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1 ‘‘(iii) SUMMARY OF DEFAULT PRE2 VENTION PLAN.—Upon receiving technical 

3 assistance from the Secretary under clause 

4 (ii), each institution subject to this sub5 paragraph shall— 

6 ‘‘(I) prepare a summary of the 

7 plan described under clause (i) that is 

8 directed to a student audience; 

9 ‘‘(II) make the summary publicly 

10 available; and 

11 ‘‘(III) provide the summary to 

12 students at the institution.’’; and 

13 (2) in subsection (m)(3), by striking ‘‘through 

14 the use of’’ and all that follows through the period 

15 at the end and inserting ‘‘through default manipula16 tion’’. 

17 SEC. 9. AMENDMENTS TO TERMS AND CONDITIONS OF BOR18 ROWER DEFENSES. 

19 Section 455(h) of the Higher Education Act of 1965 

20 (20 U.S.C. 1087e(h)) is amended to read as follows: 

21 ‘‘(h) BORROWER DEFENSES.— 

22 ‘‘(1) IN GENERAL.—Notwithstanding any other 

23 provision of State or Federal law, a defense to re24 payment of a loan under this title includes— 


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1 ‘‘(A) a substantial misrepresentation under 

2 section 487(c)(3); 

3 ‘‘(B) an act or omission that would give 

4 rise to a cause of action against the school 

5 under applicable State law; or 

6 ‘‘(C) such further acts or omissions that 

7 the Secretary determines appropriate. 

8 ‘‘(2) PROCEDURES.— 

9 ‘‘(A) IN GENERAL.—The Secretary shall, 

10 with respect to a borrower defense under this 

11 subsection— 

12 ‘‘(i) determine the entitlement of a 

13 borrower to relief based on all evidence 

14 available to the Department; and 

15 ‘‘(ii) provide an expeditious and fair 

16 process to consider applications provided 

17 by individuals, groups, and representatives 

18 on behalf of groups. 

19 ‘‘(B) INDEPENDENT DETERMINATION.—A 

20 determination under subparagraph (A)(i) shall 

21 be independent of any action that the Depart22 ment may take to recoup from the school re23 lated to the borrower defense. 

24 ‘‘(C) CANCELLATION OF DEBT.—If the 

25 Secretary determines under subparagraph 


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1 (A)(i) that a borrower is entitled to relief, the 

2 Secretary shall cancel all outstanding debt, and 

3 return any payments made on the loans of such 

4 borrower. 

5 ‘‘(3) REGULATIONS.—The Secretary shall speci6 fy in regulations which acts or omissions of an insti7 tution of higher education a borrower may assert as 

8 a defense to repayment of a loan made under this 

9 part, except that in no event may a borrower recover 

10 from the Secretary, in any action arising from or re11 lating to a loan made under this part, an amount in 

12 excess of the amount such borrower has repaid on 

13 such loan.’’. 

14 SEC. 10. IMPROVED STUDENT LOAN SERVICING AND DEBT 

15 COLLECTION PRACTICES. 

16 Section 456 of the Higher Education Act of 1965 (20 

17 U.S.C. 1087f) is amended by adding at the end the fol18 lowing new subsection: 

19 ‘‘(c) NO PREDISPUTE ARBITRATION CLAUSES.—A 

20 contract entered into under this section for the servicing 

21 of loans made or purchased under this part shall include 

22 a provision that any rights and remedies available to bor23 rowers against the servicer may not be waived by any 

24 agreement, policy, or form, including by a predispute arbi25 tration agreement.’’. 


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1 SEC. 11. IMPROVED DISCLOSURES, COUNSELING, AND FI2 NANCIAL ASSISTANCE INFORMATION FOR 

3 STUDENTS. 

4 Section 485(l) of the Higher Education Act of 1965 

5 (20 U.S.C. 1092(l)) is amended— 

6 (1) by striking paragraph (1) and inserting the 

7 following new paragraph: 

8 ‘‘(1) DISCLOSURE REQUIRED PRIOR TO SIGNING

9 MASTER PROMISSORY NOTE.—Each eligible institu10 tion shall, prior to obtaining or arranging execution 

11 of a master promissory note for a loan under part 

12 D (other than a Federal Direct Consolidation Loan) 

13 by a first-time borrower at such institution, ensure 

14 that the borrower receives comprehensive informa15 tion on the terms and conditions of the loan and of 

16 the responsibilities the borrower has with respect to 

17 such loan in accordance with paragraph (2). Such 

18 information— 

19 ‘‘(A) shall be provided through the use of 

20 interactive programs that include mechanisms 

21 to check the borrower’s comprehension of the 

22 terms and conditions of the borrower’s loans 

23 under part D, using simple and understandable 

24 language and clear formatting; and 

25 ‘‘(B) shall be provided— 


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1 ‘‘(i) during an entrance counseling 

2 session conducted in person; or 

3 ‘‘(ii) online.’’; and 

4 (2) in paragraph (2), by adding at the end the 

5 following new subparagraph: 

6 ‘‘(L) Information relating to the institu7 tion’s cohort default rate, including— 

8 ‘‘(i) the cohort default rate, as defined 

9 in section 435(m), of the institution; 

10 ‘‘(ii) an easy to understand expla11 nation of the cohort default rate; 

12 ‘‘(iii) the percentage of students at 

13 the institution of higher education who 

14 borrow Federal student loans under this 

15 title; 

16 ‘‘(iv) the national average cohort de17 fault rate (as determined by the Secretary 

18 in accordance with section 435(m)); 

19 ‘‘(v) in the case of an institution with 

20 a cohort default rate that is greater than 

21 the national average cohort default rate (as 

22 described in clause (iv)), a disclosure to the 

23 student that the institution’s cohort de24 fault rate is above the national average; 

25 and 


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1 ‘‘(vi) in the case of an institution with 

2 a cohort default rate that is greater than 

3 30 percent, a disclosure to the students 

4 that if the cohort default rate remains 

5 greater than 30 percent for the 3 consecu6 tive years— 

7 ‘‘(I) the institution will lose insti8 tutional eligibility for the purposes of 

9 programs authorized under this title; 

10 and 

11 ‘‘(II) the student will no longer 

12 be able to receive Federal financial aid 

13 at that institution.’’. 

14 SEC. 12. PROGRAM PARTICIPATION AGREEMENTS. 

15 (a) SENSE OF CONGRESS REGARDING INCENTIVE

16 COMPENSATION.—It is the sense of Congress that— 

17 (1) incentive compensation is an inappropriate 

18 mechanism in the delivery of higher education for in19 stitutions of higher education wishing to participate 

20 in programs under title IV of the Higher Education 

21 Act of 1965 (20 U.S.C. 1001 et seq.); and 

22 (2) the ban on incentive compensation under 

23 section 487(a)(20) of the Higher Education Act of 

24 1965 (20 U.S.C. 1094(a)(20)), as amended by sub25 section (b), is intended to preclude its use by instituVerDate Sep 11 2014 04:14 Jul 03, 2019 Jkt 089200 PO 00000 Frm 00051 Fmt 6652 Sfmt 6201 E:\BILLS\H3487.IH H3487

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1 tions wishing to participate in such programs, at any 

2 point in the recruitment, enrollment, education, or 

3 employment placement of students. 

4 (b) AMENDMENTS.—Section 487 of the Higher Edu5 cation Act of 1965 (20 U.S.C. 1094) is amended— 

6 (1) in subsection (a)— 

7 (A) in paragraph (19), by inserting ‘‘hous8 ing facilities,’’ after ‘‘libraries,’’; 

9 (B) by striking paragraph (20) and insert10 ing the following: 

11 ‘‘(20)(A) The institution or any third party act12 ing on the institution’s behalf, including an institu13 tion affiliate or service provider to the institution, 

14 will not provide any commission, bonus, or other in15 centive payment to any person or entity at any 

16 phase of the academic process based directly or indi17 rectly on success in— 

18 ‘‘(i) securing enrollments or securing or 

19 awarding financial aid; 

20 ‘‘(ii) performance in educational 

21 coursework; 

22 ‘‘(iii) graduation; 

23 ‘‘(iv) job placement; or 


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1 ‘‘(v) any other academic facet of a stu2 dent’s enrollment in an institution of higher 

3 education. 

4 ‘‘(B) The requirements of subparagraph (A) 

5 shall not apply to the recruitment of foreign stu6 dents residing in foreign countries who are not eligi7 ble to receive Federal student assistance.’’; and 

8 (C) by adding at the end the following new 

9 paragraphs: 

10 ‘‘(30)(A) The institution— 

11 ‘‘(i) shall not include a predispute arbitra12 tion agreement in any contract with a student 

13 or prospective student for enrollment at the in14 stitution; and 

15 ‘‘(ii) shall agree that, in any case where a 

16 contract for enrollment at the institution en17 tered into by a student before the date of enact18 ment of the Protections and Regulation for Our 

19 Students Act included a predispute arbitration 

20 agreement, such agreement shall be invalid and 

21 unenforceable by the institution. 

22 ‘‘(B) In this paragraph, the term ‘predispute 

23 arbitration agreement’ means any agreement to arbi24 trate a dispute that had not yet arisen at the time 

25 of the making of the agreement. 


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1 ‘‘(31)(A) If the institution has a student default 

2 risk for a fiscal year, as calculated by the Secretary, 

3 of 0.1 or greater, the institution will, for such 

4 year— 

5 ‘‘(i) provide an individual accepted for en6 rollment at the institution with a waiting pe7 riod, beginning on the date that the individual 

8 receives notification of the acceptance and last9 ing for not less than 2 weeks, before the indi10 vidual is required to enroll in the institution, 

11 pay tuition charges, or sign a master promis12 sory note for a loan under this title, in order to 

13 give the individual time to consider, and com14 pare among postsecondary options, program 

15 costs at the institution and employment pros16 pects upon completion of a program of study; 

17 ‘‘(ii) ensure that the receipt of financial 

18 aid, incentives, or other benefits is not made 

19 contingent on an individual confirming enroll20 ment before the end of the individual’s waiting 

21 period; 

22 ‘‘(iii) inform the individual, in writing and 

23 in a manner determined by the Secretary at the 

24 time of the acceptance notification, of— 


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1 ‘‘(I) the individual’s right to the 2- 

2 week waiting period under clause (i) begin3 ning on the date that the individual re4 ceives notification of the acceptance; and 

5 ‘‘(II) the reason why the institution is 

6 required to provide such waiting period; 

7 ‘‘(iv) notify an individual accepted for en8 rollment at the institution of all financial aid 

9 determinations by not less than 1 week before 

10 the enrollment confirmation deadline, if all re11 quested application forms are received from the 

12 individual on time; and 

13 ‘‘(v) disclose to an individual accepted for 

14 enrollment, in a manner determined by the Sec15 retary, that the individual may file a complaint 

16 through the complaint tracking system estab17 lished under section 161 if the individual be18 lieves that the institution has violated any pro19 vision of this paragraph. 

20 ‘‘(B) If an institution described in subpara21 graph (A) fails to meet the requirements of this 

22 paragraph, the institution shall be subject to a civil 

23 penalty in accordance with section 489A. 

24 ‘‘(C) Notwithstanding subparagraph (A), the 

25 Secretary may, after providing notice and an opporVerDate Sep 11 2014 04:14 Jul 03, 2019 Jkt 089200 PO 00000 Frm 00055 Fmt 6652 Sfmt 6201 E:\BILLS\H3487.IH H3487

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1 tunity to comment, elect to replace the use of the 

2 student default risk percentage threshold established 

3 under subparagraph (A) with a loan repayment rate 

4 threshold calculated in accordance with section 

5 483D(b).’’; and 

6 (2) in subsection (c)(1)(A)(i), by striking 

7 ‘‘available’’ and inserting ‘‘made publicly available 

8 and provided’’. 

9 SEC. 13. IMPROVED DISCLOSURES FOR CLINICAL TRAIN10 ING PROGRAMS. 

11 Section 485 of the Higher Education Act of 1965 (20 

12 U.S.C. 1092) is amended by adding at the end the fol13 lowing new subsection: 

14 ‘‘(n) REPORTS RELATING TO CLINICAL TRAINING

15 PROGRAMS.— 

16 ‘‘(1) REPORT ON CLINICAL TRAINING PROGRAM

17 AGREEMENTS.— 

18 ‘‘(A) IN GENERAL.—Beginning in the year 

19 in which the Protections and Regulation for 

20 Our Students Act is enacted, an eligible institu21 tion that participates in any program under this 

22 title shall prepare and submit a report to the 

23 Secretary containing the information described 

24 in subparagraph (C), for every year in which 


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1 the eligible institution has an agreement with a 

2 hospital or health facility, through which— 

3 ‘‘(i) the eligible institution agrees to 

4 provide funding or other benefits to the 

5 hospital or health facility; and 

6 ‘‘(ii) that hospital or health facility 

7 provides opportunities for students at the 

8 institution to participate in a clinical train9 ing program. 

10 ‘‘(B) TIMING.—Following the year in 

11 which the Protections and Regulation for Our 

12 Students Act is enacted, the report described in 

13 this paragraph shall be submitted not more 

14 than 30 days after the end of any year for 

15 which a report is required to comply with sub16 paragraph (A). 

17 ‘‘(C) CONTENTS OF REPORT.—The report 

18 described in this paragraph shall include the 

19 following: 

20 ‘‘(i) The amount of any payments 

21 from the institution of higher education to 

22 a hospital or health facility during the pe23 riod covered by the report, and the precise 

24 terms of any agreement under which such 

25 amounts are determined. 


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1 ‘‘(ii) Any conditions associated with 

2 the transfer of money or the provision of 

3 clinical training program opportunities 

4 that are part of the agreement described in 

5 subparagraph (A). 

6 ‘‘(iii) Any memorandum of under7 standing between the institution of higher 

8 education, or an alumni association or 

9 foundation affiliated with or related to 

10 such institution, and a hospital or health 

11 facility, that directly or indirectly relates to 

12 any aspect of any agreement referred to in 

13 subparagraph (A) or controls or directs 

14 any obligations or distribution of benefits 

15 between or among any such entities. 

16 ‘‘(iv) For each hospital or health facil17 ity that has an agreement described in 

18 subparagraph (A) with the institution, the 

19 number of clinical training positions at the 

20 hospital or health facility that are reserved 

21 for students at that institution. 

22 ‘‘(2) REPORT ON CHARITABLE DONATIONS.— 

23 ‘‘(A) IN GENERAL.—Beginning in the year 

24 in which the Protections and Regulation for 

25 Our Students Act is enacted, and annually 


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1 thereafter, an eligible institution shall prepare 

2 and submit to the Secretary a report containing 

3 the information described in subparagraph (C) 

4 if— 

5 ‘‘(i) the eligible institution made a 

6 charitable donation to a hospital or health 

7 facility in any of the previous 3 years; and 

8 ‘‘(ii) the number of students from the 

9 eligible institution who participate in any 

10 clinical training program at the hospital or 

11 health facility where such a donation was 

12 made increases by more than 5 students or 

13 10 percent, whichever is less, as compared 

14 to the number of such students who par15 ticipated in a clinical training program at 

16 that hospital or health facility during the 

17 first year in the previous 3-year period. 

18 ‘‘(B) TIMING.—Following the year in 

19 which the Protections and Regulation for Our 

20 Students Act is enacted, the report described in 

21 subparagraph (A) shall be submitted not more 

22 than 30 days after the end of any year for 

23 which a report is required to comply with sub24 paragraph (A). 


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1 ‘‘(C) CONTENTS OF REPORT.—The report 

2 described in this paragraph shall include the 

3 following: 

4 ‘‘(i) The amount of each charitable 

5 donation that was made in the previous 3- 

6 year period by the eligible institution to a 

7 hospital or health facility. 

8 ‘‘(ii) The number of students from the 

9 eligible institution who participate in any 

10 clinical training program at the hospital or 

11 health facility where each such donation 

12 was made— 

13 ‘‘(I) during the year in which the 

14 report is submitted; and 

15 ‘‘(II) during the first year in the 

16 previous 3-year period covered by the 

17 report. 

18 ‘‘(3) AGGREGATION BY INSTITUTION.—The in19 formation required to be reported in this subsection 

20 shall include, and shall be aggregated with respect 

21 to, each institution of higher education and each 

22 alumni association or foundation affiliated with or 

23 related to such institution. For any year in which an 

24 institution is required to submit a report described 

25 under paragraph (1) and a report described under 


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1 paragraph (2), the institution may submit a single 

2 report for that year containing all of the information 

3 required under paragraphs (1) and (2). 

4 ‘‘(4) REPORT TO CONGRESS.—The Secretary, in 

5 conjunction with the Secretary of Health and 

6 Human Services, shall submit to Congress, and 

7 make available to the public, an annual report that 

8 lists the reports submitted to the Secretary by each 

9 institution of higher education in accordance with 

10 this subsection. 

11 ‘‘(5) PUBLIC DISCLOSURE.—Each eligible insti12 tution described in paragraph (1) or (2) of this sub13 section shall make readily available the reports de14 scribed in such paragraph (as applicable), through 

15 appropriate publications, mailings, and electronic 

16 media to the general public. 

17 ‘‘(6) DEFINITIONS.—In this subsection: 

18 ‘‘(A) CLINICAL TRAINING PROGRAM.—The 

19 term ‘clinical training program’ means any pro20 gram at, or associated or affiliated with, a hos21 pital or health facility (or any of a hospital’s af22 filiates or health facility’s affiliates), the com23 pletion of which fulfills a requirement that is 

24 necessary to receive a license, certificate, spe25 cialized accreditation, or other academically reVerDate Sep 11 2014 04:14 Jul 03, 2019 Jkt 089200 PO 00000 Frm 00061 Fmt 6652 Sfmt 6201 E:\BILLS\H3487.IH H3487

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1 lated pre-condition necessary under Federal or 

2 State law for a health profession. 

3 ‘‘(B) HEALTH FACILITY.—The term 

4 ‘health facility’ has the meaning given that 

5 term in section 804(d). 

6 ‘‘(C) HOSPITAL.—The term ‘hospital’ has 

7 the meaning given that term in section 1861 of 

8 the Social Security Act (42 U.S.C. 1395x).’’. 

9 SEC. 14. CIVIL PENALTIES. 

10 Part G of title IV of the Higher Education Act of 

11 1965 (20 U.S.C. 1088 et seq.) is amended by inserting 

12 after section 489 the following new section: 

13 ‘‘SEC. 489A. CIVIL PENALTIES AND OTHER REMEDIES. 

14 ‘‘(a) SANCTIONS FOR SUBSTANTIAL MISREPRESEN15 TATIONS OR SERIOUS VIOLATIONS.— 

16 ‘‘(1) CIVIL PENALTIES.—The Secretary may 

17 impose a civil penalty upon an eligible institution 

18 upon making a determination, after reasonable no19 tice and opportunity for a hearing, that an eligible 

20 institution has engaged in a substantial misrepresen21 tation or other serious violation. 

22 ‘‘(2) AMOUNT OF CIVIL PENALTIES.—A civil 

23 penalty imposed for a violation under subparagraph 

24 (A) shall be not less than $100,000 or— 


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1 ‘‘(A) in the case of a first violation, an 

2 amount equal to the product of $1,000,000 

3 multiplied by the institution’s student default 

4 risk, whichever is larger; 

5 ‘‘(B) in the case of a second violation, an 

6 amount equal to the product of $2,000,000 

7 multiplied by the institution’s student default 

8 risk, whichever is larger; and 

9 ‘‘(C) in the case of a third or subsequent 

10 violation, an amount equal to the product of 

11 $3,000,000 multiplied by the institution’s stu12 dent default risk, whichever is larger. 

13 ‘‘(3) TREATMENT OF MULTIPLE INSTITU14 TIONS.—For the purpose of determining the number 

15 of violations for subparagraph (B), any violation by 

16 a particular institution will accrue against all identi17 fication codes used by the Office of Postsecondary 

18 Education to designate campuses and institutions 

19 affiliated with the institution, and within the period 

20 of participation for the institution, as defined in sec21 tion 668.13(b) of title 34, Code of Federal Regula22 tions, or any successor regulation. 

23 ‘‘(b) SANCTIONS FOR OTHER VIOLATIONS OF THIS

24 TITLE.—Upon determination, after reasonable notice and 

25 opportunity for a hearing, that an eligible institution has 


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1 engaged in a violation of any other provision of this title, 

2 including the failure to carry out any provision of this 

3 title, that is not a significant misrepresentation or other 

4 serious violation, the Secretary may impose a civil penalty 

5 upon such institution of not more than $100,000 (subject 

6 to such adjustments for inflation as the Secretary may 

7 prescribe by regulation) for each such violation. 

8 ‘‘(c) CIVIL PENALTIES AND SANCTIONS FOR OFFI9 CERS OF INSTITUTIONS.—Upon determination, after rea10 sonable notice and an opportunity for a hearing on the 

11 record, that an officer of an institution of higher education 

12 that participates in a program under this title has know13 ingly and willfully, or with gross negligence, violated a pro14 vision of this title, the Secretary may sanction the officer. 

15 Such sanctions may include the following: 

16 ‘‘(1) Prohibiting the institution of higher edu17 cation that has employed the officer of an institution 

18 of higher education and that participates in a pro19 gram under this title, or any other institution of 

20 higher education that participates in a program 

21 under this title, from employing the officer, except 

22 that any such prohibition under this subsection shall 

23 not be for a period of more than 5 years from the 

24 date of the determination of the violation. 


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1 ‘‘(2) Assessing a civil penalty against an officer 

2 of an institution of higher education who has know3 ingly and willfully, or with gross negligence, violated 

4 a provision of this title, except that any such civil 

5 penalty under this subsection shall not be greater 

6 than the amount of the officer’s compensation for 

7 each year for which the violations are determined to 

8 have occurred. For purposes of this subparagraph, 

9 an officer’s compensation shall include proceeds of 

10 any sales of stock and any incentive-based com11 pensation (including stock options awarded as com12 pensation) based on information required to be re13 ported to the Secretary or any other Federal agency 

14 during the period in which the violations are deter15 mined to have occurred. 

16 ‘‘(d) LIMITATION, SUSPENSION, OR TERMINATION OF

17 ELIGIBILITY STATUS.— 

18 ‘‘(1) IN GENERAL.—Upon determination, after 

19 reasonable notice and opportunity for a hearing, that 

20 an eligible institution has engaged in a violation of 

21 any provision of this title (including the failure to 

22 carry out any provision of this title or any regulation 

23 prescribed under such provision) or a violation of 

24 any applicable special arrangement, agreement, or 

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1 minate the participation in any program under this 

2 title of an eligible institution, subject to the require3 ments of paragraph (2). 

4 ‘‘(2) SUSPENSION PROCEDURES.—No period of 

5 suspension under this section shall exceed 60 days 

6 unless the institution and the Secretary agree to an 

7 extension or unless limitation or termination pro8 ceedings are initiated by the Secretary within that 

9 period of time. 

10 ‘‘(e) EMERGENCY ACTION.— 

11 ‘‘(1) IN GENERAL.—The Secretary may take an 

12 emergency action against an institution, under which 

13 the Secretary shall, effective on the date on which a 

14 notice and statement of the basis of the action is 

15 mailed to the institution (by registered mail, return 

16 receipt requested), withhold funds from the institu17 tion or its students and withdraw the institution’s 

18 authority to obligate funds under any program 

19 under this title, if the Secretary— 

20 ‘‘(A) receives information, determined by 

21 the Secretary to be reliable, that the institution 

22 is violating any provision of this title, any regu23 lation prescribed under this title, or any appli24 cable special arrangement, agreement, or limita25 tion; 


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1 ‘‘(B) determines that immediate action is 

2 necessary to prevent misuse of Federal funds; 

3 and 

4 ‘‘(C) determines that the likelihood of loss 

5 outweighs the importance of the procedures pre6 scribed in subsection (e) for limitation, suspen7 sion, or termination. 

8 ‘‘(2) TIME LIMITATION.—An emergency action 

9 described in paragraph (1) shall not exceed 30 days 

10 unless limitation, suspension, or termination pro11 ceedings are initiated by the Secretary against the 

12 institution within that period of time. 

13 ‘‘(3) OPPORTUNITY TO SHOW CAUSE.—The Sec14 retary shall provide an institution that is the subject 

15 of an emergency action under this subsection an op16 portunity to show cause, if the institution so re17 quests, that the emergency action is unwarranted 

18 and should be lifted. 

19 ‘‘(f) LIFTING OF SANCTIONS.—Notwithstanding any 

20 other provision of this title, an institution of higher edu21 cation that has been sanctioned by the Secretary under 

22 this section or any other provision of this title may not 

23 have such sanctions lifted until the Secretary has con24 ducted a subsequent program review under section 498A 


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1 and has found the institution to be in compliance with this 

2 title. 

3 ‘‘(g) SINGLE COURSE OF CONDUCT; COMPROMISE

4 AUTHORITY AND COLLECTION OF PENALTY.— 

5 ‘‘(1) SAME COURSE OF CONDUCT.—For pur6 poses of this section, acts and omissions relating to 

7 a single course of conduct shall be treated as a sin8 gle violation. 

9 ‘‘(2) COMPROMISE AUTHORITY.—Any civil pen10 alty under this section may be compromised (but not 

11 eliminated) by the Secretary. In determining the 

12 amount of such penalty, or the amount agreed upon 

13 in compromise, the Secretary shall consider— 

14 ‘‘(A) the appropriateness of the penalty to 

15 the size of the institution of higher education 

16 subject to the determination; and 

17 ‘‘(B) the gravity of the violation, failure, or 

18 misrepresentation. 

19 ‘‘(h) COLLECTION OF PENALTY.—The amount of any 

20 penalty under this section may be deducted from any sums 

21 owing by the United States to the institution charged. 

22 ‘‘(i) DISPOSITION OF AMOUNTS RECOVERED.— 

23 ‘‘(1) IN GENERAL.—Amounts collected under 

24 this section shall be transferred to the Secretary, 


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1 who shall determine the distribution of collected 

2 amounts, in accordance with paragraphs (2) and (3). 

3 ‘‘(2) USE FOR PROGRAM INTEGRITY EFFORTS

4 AND PROGRAM REVIEWS.— 

5 ‘‘(A) IN GENERAL.—For each fiscal year, 

6 an amount equal to not more than 50 percent 

7 of the amounts recovered or collected under this 

8 section— 

9 ‘‘(i) shall be available to the Secretary 

10 to carry out program reviews under section 

11 498A and other efforts by the Secretary 

12 related to program integrity under part H; 

13 and 

14 ‘‘(ii) may be credited, if applicable, for 

15 that purpose by the Secretary to any ap16 propriations and funds that are available 

17 to the Secretary for obligation at the time 

18 of collection. 

19 ‘‘(B) SUPPLEMENT NOT SUPPLANT.— 

20 Amounts made available under subparagraph 

21 (A) shall be used to supplement and not sup22 plant any other amounts available to the Sec23 retary for the purpose described in such sub24 paragraph. 


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1 ‘‘(C) AVAILABILITY FOR FUNDS.—Any 

2 amounts collected under this section that are 

3 made available under paragraph (2) shall re4 main available until expended. 

5 ‘‘(3) USE FOR STUDENT RELIEF FUND.—For 

6 each fiscal year, an amount equal to not less than 

7 50 percent of the amounts recovered or collected 

8 under this section shall be deposited into the Stu9 dent Relief Fund established under subsection (k). 

10 ‘‘(4) REPORT.—The Secretary shall regularly 

11 publish, on the website of the Department, a de12 tailed description that includes— 

13 ‘‘(A) the amount of funds that were dis14 tributed for the purposes described in para15 graph (2) and the amount used for the Student 

16 Relief Fund under paragraph (3); and 

17 ‘‘(B) how funds were distributed among 

18 the purposes described in paragraph (2)(A)(i). 

19 ‘‘(j) STUDENT RELIEF FUND.— 

20 ‘‘(1) ESTABLISHMENT.—The Secretary shall es21 tablish a Student Relief Fund (referred to in this 

22 subsection as the ‘Fund’) that shall be used, subject 

23 to the availability of funds, to provide financial relief 

24 to any student enrolled in an institution of higher 

25 education that— 


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1 ‘‘(A) has failed to comply with an eligi2 bility requirement under section 101 or 102 or 

3 an obligation incurred under the terms of the 

4 program participation agreement under section 

5 487; or 

6 ‘‘(B) has been sanctioned under subsection 

7 (b) or (c). 

8 ‘‘(2) DETERMINATION OF RELIEF.—The Sec9 retary, in consultation with Director of the Bureau 

10 of Consumer Financial Protection— 

11 ‘‘(A) shall determine the manner of relief 

12 to be provided under paragraph (1), which may 

13 include tuition reimbursement, full or partial 

14 loan forgiveness, or loan reinstatement; and 

15 ‘‘(B) may issue regulations regarding how 

16 the amounts in the Fund will be distributed 

17 among students eligible for the funds. 

18 ‘‘(3) TREATMENT AND AVAILABILITY OF

19 FUNDS.— 

20 ‘‘(A) FUNDS THAT ARE NOT GOVERNMENT

21 FUNDS.—Funds obtained by or transferred to 

22 the Fund shall not be construed to be Govern23 ment funds or appropriated monies. 

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1 sion of law, amounts in the Fund shall not be 

2 subject to apportionment for purposes of chap3 ter 15 of title 31, United States Code, or under 

4 any other authority. 

5 ‘‘(C) NO FISCAL YEAR LIMITATION.—Sums 

6 deposited in the Fund shall remain in the Fund 

7 and be available for expenditure under this 

8 chapter without fiscal year limitation. 

9 ‘‘(4) INVESTMENTS.— 

10 ‘‘(A) AMOUNTS IN FUND MAY BE IN11 VESTED.—The Secretary of Education may re12 quest the Secretary of the Treasury to invest 

13 the portion of the Fund that is not, in the dis14 cretion of the Secretary of Education, required 

15 to meet the current needs of the Fund. 

16 ‘‘(B) ELIGIBLE INVESTMENTS.—Invest17 ments shall be made by the Secretary of the 

18 Treasury in obligations of the United States or 

19 obligations that are guaranteed as to principal 

20 and interest by the United States, with matu21 rities suitable to the needs of the Fund as de22 termined by the Secretary on the record. 

23 ‘‘(C) INTEREST AND PROCEEDS CRED24 ITED.—The interest on, and the proceeds from 


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1 the sale or redemption of, any obligations held 

2 in the Fund shall be credited to the Fund. 

3 ‘‘(5) REGULATIONS.—The Secretary shall pre4 scribe regulations to implement the requirements of 

5 this section within 1 year after the date of enact6 ment of the PRO Students Act. 

7 ‘‘(6) AUTHORIZATION OF APPROPRIATIONS.—In 

8 addition to funds derived from financial penalties as9 sessed pursuant to subsection (j), there are author10 ized to be appropriated such sums as may be nec11 essary to carry out this subsection. 

12 ‘‘(k) STATE ENFORCEMENT.— 

13 ‘‘(1) IN GENERAL.—Any violation of subsection 

14 (b), including the regulations promulgated under 

15 such subsection, shall be a cause of action enforce16 able by the State, through the attorney general (or 

17 the equivalent thereof) of the State, in any district 

18 court of the United States in that State or in a 

19 State court that is located in that State and that 

20 has jurisdiction over the defendant. The State may 

21 seek any relief provided under paragraph (4)(B) for 

22 such violation, or any remedies otherwise provided 

23 under law. 

24 ‘‘(2) NOTICE REQUIRED.— 


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1 ‘‘(A) IN GENERAL.—Before initiating any 

2 action in a court or other administrative or reg3 ulatory proceeding against any institution of 

4 higher education as authorized by paragraph 

5 (1) to enforce any provision of this subsection, 

6 including any regulation promulgated by the 

7 Secretary under this subsection, a State attor8 ney general shall timely provide a copy of the 

9 complete complaint to be filed and written no10 tice describing such action or proceeding to the 

11 Secretary, except as provided in subparagraph 

12 (B). 

13 ‘‘(B) EMERGENCY ACTION.—If prior notice 

14 of the initiation of an action or administrative 

15 or regulatory proceeding required under sub16 paragraph (A) is not practicable, the State at17 torney general shall provide a copy of the com18 plete complaint and the notice to the Secretary 

19 immediately upon instituting the action or pro20 ceeding. 

21 ‘‘(C) CONTENTS OF NOTICE.—The notifi22 cation required under this subparagraph shall 

23 include— 

24 ‘‘(i) the identity of the parties; 


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1 ‘‘(ii) the alleged facts underlying the 

2 proceeding; and 

3 ‘‘(iii) whether there may be a need to 

4 coordinate the prosecution of the pro5 ceeding so as not to interfere with any ac6 tion, including any rulemaking, undertaken 

7 by the Secretary or another Federal agen8 cy. 

9 ‘‘(3) REGULATIONS.—The Secretary shall pre10 scribe regulations to implement the requirements of 

11 this subsection and periodically provide guidance to 

12 further coordinate actions with the State attorneys 

13 general. 

14 ‘‘(4) PRESERVATION OF STATE AUTHORITY.— 

15 ‘‘(A) STATE CLAIMS.—Nothing in this sub16 section shall be construed as altering, limiting, 

17 or affecting the authority of a State attorney 

18 general or any other regulatory or enforcement 

19 agency or authority to bring an action or other 

20 regulatory proceeding arising solely under the 

21 law in effect in that State. 

22 ‘‘(B) RELIEF.— 

23 ‘‘(i) IN GENERAL.—Relief under this 

24 subsection may include, without limita25 tion— 


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1 ‘‘(I) rescission or reformation of 

2 contracts; 

3 ‘‘(II) refund of moneys or return 

4 of real property; 

5 ‘‘(III) restitution; 

6 ‘‘(IV) disgorgement or compensa7 tion for unjust enrichment; 

8 ‘‘(V) payment of damages or 

9 other monetary relief pursuant to the 

10 requirements of paragraph (2); 

11 ‘‘(VI) public notification regard12 ing the violation, including the costs 

13 of notification; and 

14 ‘‘(VII) limits on the activities or 

15 functions of the person. 

16 ‘‘(ii) EXCLUSION.—Relief under this 

17 subsection shall not include the ability to 

18 suspend or terminate the eligibility status 

19 of an institution of higher education for 

20 programs under this title. 

21 ‘‘(l) DEFINITIONS.—In this section: 

22 ‘‘(1) OFFICER OF AN INSTITUTION OF HIGHER

23 EDUCATION.—The term ‘officer of an institution of 

24 higher education’ includes the president, chief execuVerDate Sep 11 2014 04:14 Jul 03, 2019 Jkt 089200 PO 00000 Frm 00076 Fmt 6652 Sfmt 6201 E:\BILLS\H3487.IH H3487

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1 tive officer, and chief financial officer of an institu2 tion of higher education or their equivalents. 

3 ‘‘(2) SUBSTANTIAL MISREPRESENTATION OR

4 OTHER SERIOUS VIOLATION.—The term ‘substantial 

5 misrepresentation or other serious violation’ means 

6 any of the following: 

7 ‘‘(A) A substantial misrepresentation re8 garding— 

9 ‘‘(i) the nature of the educational pro10 gram of an institution of higher education; 

11 ‘‘(ii) the financial charges of the insti12 tution; 

13 ‘‘(iii) the space availability in a pro14 gram of the institution for which a student 

15 is considering enrollment; 

16 ‘‘(iv) the admission requirements of 

17 the institution; 

18 ‘‘(v) the transferability of credits from 

19 the institution; 

20 ‘‘(vi) whether a program of the insti21 tution meets the necessary standards to 

22 qualify students to sit for licensing exami23 nations, or obtain certification required as 

24 a precondition for employment, in the 

25 State in which the students reside; 


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1 ‘‘(vii) the passage rates of students at 

2 the institution in obtaining certification re3 quirements; 

4 ‘‘(viii) the passage rates of students 

5 who sit for licensing examinations; or 

6 ‘‘(ix) the employability of the grad7 uates of the institution. 

8 ‘‘(B) Failure of an institution subject to 

9 the requirements of section 487(a)(32) to com10 ply with such section. 

11 ‘‘(C) A knowing and willful misuse of Fed12 eral student aid from any source. 

13 ‘‘(D) A violation of section 487(a)(20). 

14 ‘‘(E) A violation of the default manipula15 tion regulations promulgated by the Secretary 

16 under section 435(m)(3). 

17 ‘‘(F) Failure to comply with the program 

18 review process described in section 498A, in19 cluding any disclosure requirement described in 

20 paragraph (2)(C) or (5) of section 498A(b). 

21 ‘‘(G) A violation of the program integrity 

22 regulations promulgated by the Secretary under 

23 this Act. 


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1 ‘‘(H) A violation of this Act that the Sec2 retary has determined, by regulation, to be a 

3 serious violation for purposes of this section.’’. 

4 SEC. 15. REQUIREMENTS FOR ACCREDITING AGENCIES OR 

5 ASSOCIATIONS. 

6 Section 496(a) of the Higher Education Act of 1965 

7 (20 U.S.C. 1099b(a)) is amended— 

8 (1) in paragraph (7), by striking ‘‘and’’ after 

9 the semicolon; 

10 (2) in paragraph (8), by striking the period and 

11 inserting ‘‘; and’’; and 

12 (3) by adding at the end the following new 

13 paragraph: 

14 ‘‘(9) such agency or association does not re15 quire any institution to enter into predispute arbi16 tration agreements with the students of the institu17 tion.’’. 

18 SEC. 16. PROGRAM REVIEW AND DATA. 

19 Section 498A of the Higher Education Act of 1965 

20 (20 U.S.C. 1099c–1) is amended to read as follows: 

21 ‘‘SEC. 498A. PROGRAM REVIEW AND DATA. 

22 ‘‘(a) PROGRAM REVIEWS FOR INSTITUTIONS PAR23 TICIPATING UNDER TITLE IV.— 

24 ‘‘(1) IN GENERAL.—The Secretary— 


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1 ‘‘(A) may conduct program reviews, includ2 ing on-site visits, of each institution of higher 

3 education participating in a program authorized 

4 under this title; and 

5 ‘‘(B) shall conduct a program review under 

6 this subsection of each institution of higher 

7 education that poses a significant risk of failure 

8 to comply with this title, as described in para9 graphs (2) and (3). 

10 ‘‘(2) MANDATORY REVIEWS.— 

11 ‘‘(A) IN GENERAL.—The Secretary shall, 

12 on an annual basis, conduct program reviews of 

13 each institution of higher education partici14 pating in a program authorized under this title 

15 that meets 1 or more of the following criteria: 

16 ‘‘(i) The Secretary determines that— 

17 ‘‘(I) more than 15 percent of the 

18 students enrolled at the institution 

19 have received a Federal Direct Unsub20 sidized Stafford Loan during the pre21 vious year; and 

22 ‘‘(II) the institution has a cohort 

23 default rate, as defined in section 

24 435(m), that is more than 20 percent. 

25 ‘‘(ii) The Secretary determines that— 


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1 ‘‘(I) the institution has a cohort 

2 default rate, as defined in section 

3 435(m), that exceeds the national av4 erage, as determined by the Secretary 

5 in accordance with such section; and 

6 ‘‘(II) the institution has an ag7 gregate amount of defaulted loans, as 

8 determined by the Secretary, that 

9 places the institution in the highest 1 

10 percent of institutions participating in 

11 programs authorized under this title 

12 in terms of the aggregate amount of 

13 defaulted loans. 

14 ‘‘(iii) In the case of proprietary insti15 tutions of higher education, the institution 

16 received more than 80 percent of the insti17 tution’s revenues from Federal funds as 

18 defined in section 166(2), during the 2 

19 most recent years for which data is avail20 able. 

21 ‘‘(iv) The institution is among the top 

22 1 percent of institutions participating in 

23 programs authorized under this title in 

24 terms of numbers or rates of complaints 

25 related to Federal student financial aid, 


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1 educational practices and services, or re2 cruiting and marketing practices, as re3 ported in the complaint tracking system 

4 established under section 161. 

5 ‘‘(v) As of the date of the determina6 tion, the institution is among the top 1 

7 percent of institutions in terms of low 

8 graduation rates, as determined by the 

9 Secretary, of all institutions participating 

10 in programs authorized under this title. 

11 ‘‘(vi) The institution spends more 

12 than 20 percent of the institution’s reve13 nues on recruiting and marketing activities 

14 and executive compensation. 

15 ‘‘(vii) In the fiscal year immediately 

16 following the most recent cohort default 

17 rate period— 

18 ‘‘(I) the institution’s loan de19 faults increased by 50 percent or 

20 more as compared to the preceding 

21 period; and 

22 ‘‘(II) more than 50 percent of 

23 the students attending the institution 

24 received loans under this title. 


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1 ‘‘(viii) The institution, or an executive 

2 of the institution, has publicly acknowl3 edged or disclosed that the institution— 

4 ‘‘(I) is in violation or noncompli5 ance with any provision of law admin6 istered by a relevant Federal agency 

7 or relevant State entity or agency; or 

8 ‘‘(II) is being investigated re9 garding a potential violation of such 

10 provision of law. 

11 ‘‘(ix) The institution— 

12 ‘‘(I) is a proprietary institution 

13 of higher education that has acquired 

14 a nonprofit institution of higher edu15 cation at any point during the 1-year 

16 period preceding the date of the deter17 mination; or 

18 ‘‘(II) was a proprietary institu19 tion of higher education and has be20 come a nonprofit institution of higher 

21 education at any time during the 1- 

22 year period preceding the date of the 

23 determination. 

24 ‘‘(B) PUBLICATION OF INSTITUTIONS RE25 VIEWED.—The Secretary shall— 


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1 ‘‘(i) post, on a publicly available 

2 website, the name of each institution of 

3 higher education that is reviewed under 

4 subparagraph (A); 

5 ‘‘(ii) indicate, on such website, with 

6 respect to each such institution, which of 

7 the mandatory review criteria, as described 

8 in subparagraph (A), such institution met; 

9 and 

10 ‘‘(iii) indicate on the College Navi11 gator website of the Department, or any 

12 successor website, the name of each insti13 tution of higher education that is reviewed 

14 under subparagraph (A). 

15 ‘‘(C) INSTITUTIONAL DISCLOSURE OF RE16 VIEW.—Each institution of higher education 

17 that is reviewed under subparagraph (A) 

18 shall— 

19 ‘‘(i) post on the home page of the in20 stitution’s website that the institution will 

21 be subject to a mandatory program review 

22 and why the institution is being reviewed 

23 and shall maintain such posting and expla24 nation for 1 year or until the Secretary has 

25 issued its final program review report 


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1 under subsection (c)(5)(C), whichever oc2 curs sooner; 

3 ‘‘(ii) provide a clear, conspicuous dis4 closure of the information described in 

5 clause (i) to students who inquire about 

6 admission to the institution or submit an 

7 application for admission to the institution 

8 prior to the student signing an enrollment 

9 agreement with the institution, for 1 year 

10 or until the Secretary has issued the final 

11 program review report under subsection 

12 (c)(6)(C), whichever occurs sooner; and 

13 ‘‘(iii) include the information de14 scribed in clause (i) on materials of accept15 ance or admission submitted to each stu16 dent before the student enrolls in the insti17 tution, for 1 year or until the Secretary 

18 has issued the final program review report 

19 under subsection (c)(6)(C), whichever oc20 curs sooner. 

21 ‘‘(3) RISK-BASED REVIEWS.— 

22 ‘‘(A) IN GENERAL.—The Secretary shall 

23 use a risk-based approach to select, on an an24 nual basis not less than 2 percent of institu25 tions of higher education participating in a proVerDate Sep 11 2014 04:14 Jul 03, 2019 Jkt 089200 PO 00000 Frm 00085 Fmt 6652 Sfmt 6201 E:\BILLS\H3487.IH H3487

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1 gram authorized under this title that are not 

2 reviewed under paragraph (2), for a program 

3 review. Such approach shall prioritize program 

4 reviews of institutions that— 

5 ‘‘(i) have received large increases in 

6 funding under this title during the 5-year 

7 period preceding the date of the determina8 tion; 

9 ‘‘(ii) have a large proportion of overall 

10 revenue from Federal funds, as defined in 

11 section 166(2); 

12 ‘‘(iii) have a significant fluctuation in 

13 Federal Direct Stafford Loan volume, Fed14 eral Pell Grant award volume, or any com15 bination thereof, in the year for which the 

16 selection is made, compared to the year 

17 prior to such year, that is not accounted 

18 for by changes in the Federal Direct Staf19 ford Loan program, the Federal Pell Grant 

20 program, or any combination thereof; 

21 ‘‘(iv) have experienced sharp increases 

22 in enrollment in absolute numbers or rate 

23 of growth; 

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1 cation participating in a program author2 ized under this title, for loans issued under 

3 this title over the lifetime of the loans; 

4 ‘‘(vi) have a large aggregate dollar 

5 amount of loans under this title in default, 

6 or a high cohort default rate as described 

7 in section 435(m); 

8 ‘‘(vii) have a high student default 

9 risk, as compared to the student default 

10 risk for all institutions participating in a 

11 program under this title; 

12 ‘‘(viii) have a high proportion or high 

13 rate of complaints related to Federal stu14 dent financial aid, educational practices 

15 and services, or recruiting and marketing 

16 practices, as reported in the complaint 

17 tracking system established under section 

18 161; 

19 ‘‘(ix) have extremely low graduation 

20 rates, as determined by the Secretary; 

21 ‘‘(x) are in poor financial health ac22 cording to financial responsibility stand23 ards described in section 498(c); 

24 ‘‘(xi) are spending a large percentage 

25 of the institution’s revenues on recruiting 


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1 and marketing activities and executive 

2 compensation; 

3 ‘‘(xii) in the case of proprietary insti4 tutions of higher education, have large 

5 profit margins and profit growth; 

6 ‘‘(xiii) have been put on notice, warn7 ing, or probation by, or is subject to a 

8 show cause order from, a nationally recog9 nized accrediting agency or association 

10 that is recognized by the Secretary pursu11 ant to part H of title IV; 

12 ‘‘(xiv) has been found to have compli13 ance problems under this title, or is at sig14 nificant risk of failing to comply with ap15 plicable Federal or State laws, by a rel16 evant Federal agency or a relevant State 

17 entity or agency, including the Comptroller 

18 General of the United States; 

19 ‘‘(xv) has had a large amount of funds 

20 returned under section 484B; or 

21 ‘‘(xvi) in the case of proprietary insti22 tutions of higher education, have experi23 enced a change in ownership or control of 

24 the institution, including a buyout. 


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1 ‘‘(B) CRITERIA FOR RISK-BASED RE2 VIEWS.—The Secretary shall publish, and up3 date as necessary, the specific criteria that the 

4 Secretary will use to determine which institu5 tions of higher education are selected for risk6 based reviews under subparagraph (A). 

7 ‘‘(4) PUBLIC DISCLOSURE OF VIOLATIONS.— 

8 The Secretary shall— 

9 ‘‘(A) post on the College Navigator 

10 website, or any successor website, of the De11 partment, the name of each institution of high12 er education that is found to have violated a 

13 provision of this title knowingly and willfully or 

14 with gross negligence; 

15 ‘‘(B) indicate on such website, with respect 

16 to each such institution, which of the provisions 

17 of this title the institution violated; and 

18 ‘‘(C) maintain such posting until the date 

19 the institution of higher education rectifies the 

20 violation or the date that is 1 year after the 

21 date the Secretary issues the final program re22 view report under subsection (c)(6)(C) with re23 spect to such institution, whichever date is 

24 later. 


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1 ‘‘(5) INSTITUTIONAL DISCLOSURE OF VIOLA2 TIONS.—Each institution of higher education that is 

3 found to have violated a provision of this title know4 ingly and willfully or with gross negligence shall— 

5 ‘‘(A) not later than 15 days after the date 

6 of issuance of the final program review report 

7 containing the finding, post on the home page 

8 of the institution’s website that the institution 

9 has been found to have violated a provision of 

10 this title knowingly and willfully or with gross 

11 negligence, including the provision the institu12 tion was found to have violated; 

13 ‘‘(B) maintain such posting until the date 

14 the institution rectifies the violation or the date 

15 that is 1 year after the date the Secretary 

16 issues the final program review report under 

17 subsection (c)(6)(C) with respect to such insti18 tution, whichever date is later; and 

19 ‘‘(C) include the information described in 

20 subparagraph (A) on materials of acceptance or 

21 admission submitted to each student before the 

22 student enrolls in the institution until the date 

23 the institution rectifies the violation or the date 

24 that is 1 year after the date the Secretary 

25 issues the final program review report under 


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1 subsection (c)(6)(C) with respect to such insti2 tution, whichever date is later. 

3 ‘‘(b) CHARACTERISTICS OF PROGRAM REVIEWS.— 

4 ‘‘(1) NOTICE.—The Secretary may give not 

5 more than 72 hours notice to an institution of high6 er education that will undergo a program review 

7 pursuant to subsection (b) of such review. 

8 ‘‘(2) SHARING OF INFORMATION.—The Sec9 retary shall share all final program review deter10 minations conducted under this section with relevant 

11 Federal agencies and relevant State entities or agen12 cies, and appropriate accrediting agencies and asso13 ciations, to enable such agencies, entities, and asso14 ciations to determine the eligibility of institutions for 

15 funds or accreditation. 

16 ‘‘(3) INTERACTION WITH OTHER FEDERAL

17 AGENCIES AND LAWS.—To the extent practicable, 

18 the Secretary shall coordinate program reviews con19 ducted under this section with other reviews and au20 dits conducted by the Department, and with relevant 

21 Federal agencies and relevant State entities or agen22 cies. 

23 ‘‘(4) VIOLATIONS DISCOVERED THROUGH PRO24 GRAM REVIEW.— 


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1 ‘‘(A) VIOLATIONS OF THIS TITLE.—If, in 

2 the course of conducting a program review, the 

3 Secretary obtains evidence that any institution 

4 of higher education or person has engaged in 

5 conduct that may constitute a violation of this 

6 title, including a failure to fully comply with the 

7 program review process and reporting require8 ments under this section, the Secretary may 

9 sanction such institution or person, pursuant to 

10 section 489A. 

11 ‘‘(B) VIOLATIONS OF OTHER FEDERAL

12 LAWS.—If, in the course of conducting a pro13 gram review, the Secretary obtains evidence 

14 that any institution of higher education or per15 son has engaged in conduct that may constitute 

16 a violation of Federal law, the Secretary shall 

17 transmit such evidence to the Attorney General 

18 of the United States, the Director of the Bu19 reau of Consumer Financial Protection, the 

20 Commissioner of the Federal Trade Commis21 sion, or the head of any other appropriate Fed22 eral agency who may institute proceedings 

23 under appropriate law. 

24 ‘‘(C) RULE OF CONSTRUCTION.—Nothing 

25 in this paragraph shall be constructed to affect 


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1 any other authority of the Secretary to disclose 

2 information. 

3 ‘‘(5) CONDUCT OF REVIEWS.—When conducting 

4 program reviews under this section, the Secretary 

5 shall assess the institution of higher education’s 

6 compliance with the provisions of this title. Each 

7 program review shall include, at a minimum, the fol8 lowing: 

9 ‘‘(A) With regard to the institutional infor10 mation, the Secretary shall assess financial ca11 pability, administrative capability, and program 

12 integrity, including whether the institution— 

13 ‘‘(i) knowingly and willfully misused 

14 Federal student aid from any source; 

15 ‘‘(ii) violated section 487(a)(20); 

16 ‘‘(iii) engaged in any substantial mis17 representation or other serious violation, as 

18 defined in section 489A; or 

19 ‘‘(iv) violated the program integrity 

20 regulations promulgated by the Secretary 

21 under this Act. 

22 ‘‘(B) With regard to student information, 

23 the Secretary shall examine— 


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1 ‘‘(i) graduation rates compared with 

2 all other institutions participating in a pro3 gram authorized under this title; 

4 ‘‘(ii) student complaints, including 

5 interviews with current and former stu6 dents, faculty and staff, and accrediting 

7 agencies; and 

8 ‘‘(iii) information from the complaint 

9 data system established under section 161. 

10 ‘‘(6) ADMINISTRATIVE PROCESS.— 

11 ‘‘(A) TRAINING.—The Secretary shall pro12 vide training, including investigative training, to 

13 personnel of the Department designed to im14 prove the quality of financial and compliance 

15 audits and program reviews conducted under 

16 this section, including instruction about appro17 priately and effectively conducting such audits 

18 and reviews for institutions of higher education 

19 from different sectors of higher education. 

20 ‘‘(B) CARRYING OUT PROGRAM RE21 VIEWS.—In carrying out program reviews under 

22 this section, the Secretary shall— 

23 ‘‘(i) establish guidelines designed to 

24 ensure uniformity of practice in the con25 duct of such reviews; 


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1 ‘‘(ii) make available to each institu2 tion of higher education participating in a 

3 program authorized under this title com4 plete copies of all review guidelines and 

5 procedures used in program reviews, except 

6 that internal training materials for Depart7 ment staff related to identifying instances 

8 of fraud, misrepresentation, or intentional 

9 noncompliance shall not be disclosed; 

10 ‘‘(iii) permit an institution of higher 

11 education to correct or cure an administra12 tive, accounting, or recordkeeping error 

13 within 90 days of the issuance of the final 

14 program review report, if the error is not 

15 part of a pattern of error and there is no 

16 evidence of fraud or misconduct related to 

17 the error; 

18 ‘‘(iv) without sharing personally iden19 tifiable information and in accordance with 

20 section 444 of the General Education Pro21 visions Act (20 U.S.C. 1232g, commonly 

22 known as the ‘Family Educational Rights 

23 and Privacy Act of 1974’), inform the rel24 evant Federal agencies and relevant State 

25 entities or agencies, and accrediting agency 


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1 or association, whenever the Secretary 

2 finds a violation of this title or sanctions 

3 an institution of higher education under 

4 section 432, 489A, or 498; and 

5 ‘‘(v) provide to an institution of high6 er education 90 calendar days to review 

7 and respond to any program review report 

8 and relevant materials related to the report 

9 before any final program review report is 

10 issued. 

11 ‘‘(C) FINAL PROGRAM REVIEW DETER12 MINATION.— 

13 ‘‘(i) IN GENERAL.—Not later than 

14 180 calendar days after issuing a program 

15 review report under this section, the Sec16 retary shall review and consider an institu17 tion of higher education’s response, and 

18 issue a final program review determination 

19 or audit determination. The final deter20 mination shall include— 

21 ‘‘(I) a written statement address22 ing the institution of higher edu23 cation’s response; 

24 ‘‘(II) a written statement of the 

25 basis for such determination; and 


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1 ‘‘(III) a copy of the institution’s 

2 response. 

3 ‘‘(ii) CONFIDENTIALITY.—The Sec4 retary shall maintain and preserve at all 

5 times the confidentiality of any program 

6 review report until a final program review 

7 determination is issued, other than to in8 form the relevant Federal agencies and rel9 evant State entities or agencies, and ac10 crediting agency or association, as required 

11 under this section. 

12 ‘‘(D) REPORTS DISCLOSED TO THE INSTI13 TUTION.—The Secretary shall promptly disclose 

14 each program review report and each final pro15 gram review determination to the institution of 

16 higher education under review. 

17 ‘‘(E) REMOVAL OF PERSONALLY IDENTIFI18 ABLE INFORMATION.—Any personally identifi19 able information from the education records of 

20 students shall be removed from any program re21 view report or final program review determina22 tion before the report is shared with any rel23 evant Federal agency, State entity or agency, or 

24 accrediting agency or association. 


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1 ‘‘(7) FOLLOW-UP REVIEWS AFTER VIOLA2 TIONS.—The Secretary shall conduct follow-up re3 views of each institution of higher education that 

4 has been found in violation of a provision of this 

5 title not later than 1 year after the date of such 

6 finding. Such follow-up reviews may only assess 

7 whether the institution of higher education has cor8 rected violations found in a previous program review 

9 or final program review determination. 

10 ‘‘(c) DEFINITIONS.—In this section: 

11 ‘‘(1) EXECUTIVE COMPENSATION.—The term 

12 ‘executive compensation’, when used with respect to 

13 an institution of higher education, means the wages, 

14 salary, fees, commissions, fringe benefits, deferred 

15 compensation, retirement contributions, options, bo16 nuses, property, and any other form of remuneration 

17 that the Secretary determines is appropriate, given 

18 to the 5 percent of employees at the institution who 

19 are the highest compensated. 

20 ‘‘(2) FEDERAL FUNDS.—The term ‘Federal 

21 funds’ means any Federal funds provided, under this 

22 Act or any other Federal law, through a grant, con23 tract, subsidy, loan, guarantee, insurance, or other 

24 means to a proprietary institution, including Federal 

25 funds disbursed or delivered to an institution or on 


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1 behalf of a student or to a student to be used to at2 tend the institution, except that such term shall not 

3 include any monthly housing stipend provided under 

4 the Post-9/11 Educational Assistance Program 

5 under chapter 33 of title 38, United States Code. 

6 ‘‘(3) RELEVANT FEDERAL AGENCY.—The term 

7 ‘relevant Federal agency’ means— 

8 ‘‘(A) the Department of Education; 

9 ‘‘(B) the Department of Veterans Affairs; 

10 ‘‘(C) the Department of Defense; 

11 ‘‘(D) the Bureau of Consumer Financial 

12 Protection; 

13 ‘‘(E) the Federal Trade Commission; or 

14 ‘‘(F) any other Federal agency that pro15 vides Federal student assistance or that the 

16 Secretary determines appropriate. 

17 ‘‘(4) RELEVANT STATE ENTITY OR AGENCY.— 

18 The term ‘relevant State entity or agency’ means— 

19 ‘‘(A) an appropriate State licensing or au20 thorizing agency; 

21 ‘‘(B) the attorney general (or the equiva22 lent thereof) of the State; or 

23 ‘‘(C) any other State entity or agency that 

24 the Secretary determines appropriate.’’. 


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1 SEC. 17. CONSUMER PROTECTIONS FOR STUDENTS. 

2 (a) DEFINITIONS.—In this section: 

3 (1) FEDERAL FINANCIAL ASSISTANCE PRO4 GRAM.—The term ‘‘Federal financial assistance pro5 gram’’ means a program that provides Federal edu6 cation assistance funds, as described in section 103 

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

8 1003), to any postsecondary educational institution. 

9 (2) POSTSECONDARY EDUCATIONAL INSTITU10 TION.—The term ‘‘postsecondary educational institu11 tion’’ means an educational institution that awards 

12 a degree or certificate and is located in any State 

13 and includes— 

14 (A) an institution of higher education, as 

15 defined in section 102 of the Higher Education 

16 Act of 1965 (20 U.S.C. 1002); 

17 (B) a postsecondary educational institu18 tion, as defined in section 203 of the Adult 

19 Education and Family Literacy Act (29 U.S.C. 

20 3272); and 

21 (C) an educational institution, as defined 

22 under section 3452 of title 38, United States 

23 Code. 

24 (3) STATE.— 

25 (A) STATE.—The term ‘‘State’’ includes, 

26 in addition to the several States of the United 


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1 States, the Commonwealth of Puerto Rico, the 

2 District of Columbia, Guam, American Samoa, 

3 the United States Virgin Islands, the Common4 wealth of the Northern Mariana Islands, and 

5 the freely associated States. 

6 (B) FREELY ASSOCIATED STATES.—The 

7 term ‘‘freely associated States’’ means the Re8 public of the Marshall Islands, the Federated 

9 States of Micronesia, and the Republic of 

10 Palau. 

11 (b) CONSUMER PROTECTIONS.—Notwithstanding 

12 any other provision of law, a postsecondary educational 

13 institution is not eligible to participate in a Federal finan14 cial assistance program with respect to any program of 

15 postsecondary education or training, including a degree or 

16 certificate program, that is designed to prepare students 

17 for entry into a recognized occupation or profession that 

18 requires licensing or other established requirements as a 

19 pre-condition for entry into such occupation or profession, 

20 unless— 

21 (1) the successful completion of the program 

22 fully qualifies a student, in the Metropolitan Statis23 tical Area in which the student resides, to— 

24 (A) take any examination required for 

25 entry into the recognized occupation or profesVerDate Sep 11 2014 04:14 Jul 03, 2019 Jkt 089200 PO 00000 Frm 00101 Fmt 6652 Sfmt 6201 E:\BILLS\H3487.IH H3487

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1 sion in the Metropolitan Statistical Area in 

2 which the student resides, including satisfying 

3 all State or professionally mandated pro4 grammatic and specialized accreditation re5 quirements, if any; and 

6 (B) be certified or licensed or meet any 

7 other academically related pre-conditions that 

8 are required for entry into the recognized occu9 pation or profession in the Metropolitan Statis10 tical Area in which the student resides; and 

11 (2) the institution offering the program pro12 vides timely placement for all of the academically re13 lated pre-licensure requirements for entry into the 

14 recognized occupation or profession in the Metropoli15 tan Statistical Area in which the student resides, 

16 such as clinical placements, internships, or appren17 ticeships. 

18 (c) EFFECTIVE DATE.—This section shall take effect 

19 on the date that is 180 days after the date of the enact20 ment of this Act. 

Æ 


kjohnson on DSK79L0C42 with BILLS