I 

114TH CONGRESS 

1ST SESSION H. R. 2192 

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

IN THE HOUSE OF REPRESENTATIVES 

APRIL 30, 2015 

Mr. TAKANO (for himself, Mrs. DAVIS of California, Mr. COHEN, Ms. SPEIER, 

and Mr. BLUMENAUER) introduced the following bill; which was referred 

to the Committee on Education and the Workforce 

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. 


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

higher education. 

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. Elimination of origination fees and other amendments to terms and conditions of loans. 

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, counseling, and financial assistance information 

for students. 

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 

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1 viding job training to low-income individ2 uals who are in need of such training;’’; 

3 (3) in subparagraph (C)— 

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

5 inserting the following new clause: 

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

7 that has no affiliation with the institution 

8 and shares no employees with the institu9 tion;’’; and 

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

11 (ii); and 

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

13 inserting the following new subparagraphs: 

14 ‘‘(D) include no loans made by an institu15 tion of higher education as revenue to the 

16 school, except for payments made by students 

17 on such loans; 

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

19 institution— 

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

21 form of monetary aid based upon the aca22 demic achievements or financial need of 

23 students, disbursed to qualified student re24 cipients during each fiscal year from an es25 tablished restricted account; and 


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

2 that account represent designated funds, 

3 or income earned on such funds, from a 

4 source that has no affiliation with the in5 stitution and shares no employees with the 

6 institution; and’’. 

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 funds provided directly to an institu10 tion or to a student attending such institution under 

11 any of the following provisions of law: 

12 ‘‘(A) Title IV. 

13 ‘‘(B) Chapter 30, 31, 32, 33, 34, or 35 of 

14 title 38, United States Code. 

15 ‘‘(C) Chapter 101, 105, 106A, 1606, 1607, 

16 or 1608 of title 10, United States Code. 

17 ‘‘(D) Section 1784a, 2005, or 2007 of title 

18 10, United States Code. 

19 ‘‘(E) Title I of the Workforce Investment 

20 Act of 1998 (29 U.S.C. 2801 et seq.). 

21 ‘‘(F) The Adult Education and Family Lit22 eracy Act (20 U.S.C. 9201 et seq.).’’; and 

23 (4) by inserting after paragraph (16), as redes24 ignated by paragraph (1) of this section, the fol25 lowing new paragraph: 


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1 ‘‘(17) RECRUITING AND MARKETING ACTIV2 ITY.— 

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

4 subparagraph (B), the term ‘recruiting and 

5 marketing activity’ means an activity that con6 sists of any of the following: 

7 ‘‘(i) Any advertising or promotion ac8 tivity, including a paid announcement in 

9 newspapers, magazines, radio, television, 

10 billboards, electronic media, naming rights, 

11 or any other public medium of communica12 tion, including paying for a display or pro13 motion at a job fair, military installation, 

14 or postsecondary education recruiting 

15 event. 

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

17 prospective students, directly or through a 

18 contractor or other third party, including 

19 any contact concerning a prospective stu20 dent’s potential enrollment or application 

21 for grant, loan, or work assistance under 

22 title IV or participation in preadmission or 

23 advising activities, including— 

24 ‘‘(I) paying employees responsible 

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1 tacting potential students in person, 

2 by phone, by email, by internet com3 munications, or by other means, re4 garding enrollment; 

5 ‘‘(II) compensating a person to 

6 provide to an institution of higher 

7 education contact information regard8 ing prospective students, including in9 formation obtained through websites 

10 established for such purpose; and 

11 ‘‘(III) providing funds to a third 

12 party to create or maintain a website 

13 for the purpose of obtaining contact 

14 information regarding prospective stu15 dents. 

16 ‘‘(iii) Any other activity as the Sec17 retary may determine. 

18 ‘‘(B) EXCEPTION.—An activity that is re19 quired as a condition of receipt of funds by an 

20 institution under title IV, or under another ap21 plicable Federal law, shall not be considered to 

22 be a recruiting and marketing activity under 

23 subparagraph (A).’’. 


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

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

3 adding at the end the following new subsection: 

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

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

6 calculated by taking an institution’s cohort default rate 

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

8 year available, and multiplying it by the percentage of stu9 dents enrolled at such institution receiving a loan made, 

10 insured, or guaranteed under this title during the previous 

11 academic year.’’. 

12 SEC. 4. RESTRICTION ON MARKETING WITH FEDERAL EDU13 CATIONAL ASSISTANCE FUNDS. 

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

15 Education Opportunity Act is amended by striking section 

16 119 (20 U.S.C. 1011m). 

17 (b) INSERTION IN HIGHER EDUCATION ACT OF 1965 

18 AND AMENDMENTS.—Part B of title I of the Higher Edu19 cation Act of 1965 (20 U.S.C. 1011 et seq.) is amended 

20 by adding at the end the following new section: 


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1 ‘‘SEC. 124. CERTIFICATION REGARDING THE USE OF CER2 TAIN FEDERAL FUNDS AND RESTRICTIONS 

3 ON SOURCES OF FUNDS FOR RECRUITING 

4 AND MARKETING ACTIVITIES. 

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

6 under this Act by an institution of higher education or 

7 other postsecondary educational institution may be used 

8 to pay any person for influencing or attempting to influ9 ence an officer or employee of any agency, a Member of 

10 Congress, an officer or employee of Congress, or an em11 ployee of a Member of Congress in connection with any 

12 Federal action described in subsection (b). 

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

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

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

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

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

18 ‘‘(4) The entering into of any Federal coopera19 tive agreement. 

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

21 amendment, or modification of any Federal contract, 

22 grant, loan, or cooperative agreement. 

23 ‘‘(c) LOBBYING AND EARMARKS.—No Federal stu24 dent aid funding under this Act may be used to hire a 

25 registered lobbyist or pay any person or entity for securing 

26 an earmark. 


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1 ‘‘(d) RESTRICTIONS ON SOURCES OF FUNDS FOR RE2 CRUITING AND MARKETING ACTIVITIES.— 

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

4 education, or other postsecondary educational insti5 tution, may not use revenues derived from Federal 

6 educational assistance funds for recruiting or mar7 keting activities. 

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

9 this section shall be construed as a limitation on the 

10 use by an institution of revenues derived from 

11 sources other than Federal educational assistance 

12 funds. 

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

14 education, or other postsecondary educational insti15 tution, that derives 65 percent or more of revenues 

16 from Federal educational assistance funds shall re17 port annually to the Secretary and to Congress and 

18 shall include in such report— 

19 ‘‘(A) a statement of the institution’s ex20 penditures on advertising, marketing, and re21 cruiting; and 

22 ‘‘(B) a verification from an independent 

23 auditor that the institution is in compliance 

24 with the requirements of this subsection. 


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

2 education or other postsecondary educational institution 

3 receiving Federal funding under this Act, as a condition 

4 for receiving such funding, shall annually certify to the 

5 Secretary of Education that the requirements of sub6 sections (a) through (d) have been met. 

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

8 Secretary shall take such actions as are necessary to en9 sure that the provisions of this section are implemented 

10 and enforced.’’. 

11 SEC. 5. WHISTLEBLOWER PROTECTIONS FOR PERSONS AS12 SOCIATED WITH INSTITUTIONS OF HIGHER 

13 EDUCATION. 

14 (a) WHISTLEBLOWER PROTECTION PROGRAM.—Title 

15 I of the Higher Education Act of 1965 is amended by in16 serting after section 123 (20 U.S.C. 1011l) the following 

17 new section: 

18 ‘‘SEC. 124. PROTECTION FROM RETALIATION FOR DISCLO19 SURE OF CERTAIN INFORMATION BY PER20 SONS ASSOCIATED WITH INSTITUTIONS OF 

21 HIGHER EDUCATION. 

22 ‘‘(a) PROHIBITION OF RETALIATION.— 

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

24 education participating in programs under title IV 

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


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1 not discharge, demote, or otherwise discriminate 

2 against any person as retaliation for— 

3 ‘‘(A) such person disclosing to an indi4 vidual or entity described in paragraph (2) in5 formation such person reasonably believes evi6 dences a violation of any law, rule, or regulation 

7 by the institution; or 

8 ‘‘(B) assisting a person disclosing such in9 formation or providing information or docu10 ments for use in disclosing such information. 

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

12 The individuals and entities described in this para13 graph are: 

14 ‘‘(A) A Member of Congress or a rep15 resentative of a committee of Congress. 

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

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

18 ‘‘(C) The Government Accountability Of19 fice. 

20 ‘‘(D) A law enforcement agency. 

21 ‘‘(E) A court or grand jury. 

22 ‘‘(F) A management official or other em23 ployee of an institution who has the responsi24 bility to investigate, discover, or address mis25 conduct. 


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1 ‘‘(b) INVESTIGATION OF COMPLAINTS.— 

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

3 who believes that they have been subjected to a re4 taliation prohibited by subsection (a) may submit a 

5 complaint to the Inspector General of the Depart6 ment of Education (in this section referred to as the 

7 ‘Inspector General’). Unless the Inspector General 

8 determines that the complaint is frivolous, fails to 

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

10 been addressed in another Federal or State judicial 

11 or administrative proceeding initiated by the com12 plainant, the Inspector General shall investigate the 

13 complaint and, upon completion of such investiga14 tion, submit a report of the findings of the investiga15 tion to the complainant, the institution concerned, 

16 and the Secretary. 

17 ‘‘(2) INSPECTOR GENERAL ACTION.— 

18 ‘‘(A) DETERMINATION OR SUBMISSION OF

19 REPORT ON FINDINGS.—Except as provided 

20 under subparagraph (B), the Inspector General 

21 shall make a determination that a complaint is 

22 frivolous, fails to allege a violation of subsection 

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

24 Federal or State judicial or administrative pro25 ceeding initiated by the complainant or submit 


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1 a report under paragraph (1) not later than 

2 180 days after receiving the complaint. 

3 ‘‘(B) EXTENSION OF TIME.—If the Inspec4 tor General is unable to complete an investiga5 tion in time to submit a report within the 180- 

6 day period specified in subparagraph (A) and 

7 the complainant agrees to an extension of time, 

8 the Inspector General shall submit a report 

9 under paragraph (1) within such additional pe10 riod of time, up to 180 days, as shall be agreed 

11 upon between the Inspector General and the 

12 complainant. 

13 ‘‘(3) PROHIBITION ON DISCLOSURE.—The In14 spector General may not respond to any inquiry or 

15 disclose any information from or about any person 

16 alleging retaliation, except to the extent that such 

17 response or disclosure is— 

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

19 alleging the retaliation; 

20 ‘‘(B) made in accordance with the provi21 sions of section 552a of title 5, United States 

22 Code, or as required by any other applicable 

23 Federal law; or 

24 ‘‘(C) necessary to conduct an investigation 

25 of the alleged retaliation. 


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

2 be brought under this subsection more than three 

3 years after the date on which the alleged retaliation 

4 took place. 

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

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

7 after receiving an Inspector General report pursuant 

8 to subsection (b), the Secretary shall determine 

9 whether there is sufficient basis to conclude that the 

10 institution has violated subsection (a) and shall ei11 ther issue an order denying relief or shall take one 

12 or more of the following actions: 

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

14 abate the retaliation. 

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

16 complainant to the position that the complain17 ant held before the retaliation, together with 

18 compensatory damages (including back pay) 

19 and any other benefits, terms, or conditions 

20 that would apply to the complainant in that po21 sition if the retaliation had not occurred. 

22 ‘‘(C) Order the institution to pay the com23 plainant an amount equal to the aggregate 

24 amount of all costs and expenses (including at25 torneys’ fees and expert witness fees) that were 


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1 reasonably incurred by the complainant for, or 

2 in connection with, bringing the complaint re3 garding the retaliation, as determined by the 

4 Secretary. 

5 ‘‘(2) EXHAUSTION OF REMEDIES.—If the Sec6 retary issues an order denying relief under para7 graph (1) or has not issued an order within 210 

8 days after the submission of a complaint under sub9 section (b), or in the case of an extension of time 

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

11 after the expiration of the extension of time, and 

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

13 faith of the complainant, the complainant shall be 

14 deemed to have exhausted all administrative rem15 edies with respect to the complaint, and the com16 plainant may bring a de novo action at law or equity 

17 against the institution to seek compensatory dam18 ages and other relief available under this section in 

19 the appropriate district court of the United States, 

20 which shall have jurisdiction over such an action 

21 without regard to the amount in controversy. Such 

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

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

24 under this paragraph may not be brought more than 


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1 two years after the date on which remedies are 

2 deemed to have been exhausted. 

3 ‘‘(3) ADMISSIBILITY OF EVIDENCE.—The In4 spector General determination and order of the Sec5 retary denying relief under paragraph (2) shall be 

6 admissible in evidence in any de novo action at law 

7 or equity brought pursuant to this subsection. 

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

9 person fails to comply with an order issued under 

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

11 enforcement of such order in the United States dis12 trict court for a district in which the retaliation was 

13 found to have occurred. In any action brought under 

14 this paragraph, the court may grant appropriate re15 lief, including injunctive relief, compensatory and ex16 emplary damages, and attorneys’ fees and costs. The 

17 person upon whose behalf an order was issued may 

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

19 the Secretary. 

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

21 affected or aggrieved by an order issued under para22 graph (1) may obtain review of the order’s conform23 ance with this subsection, and any regulations issued 

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

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1 leged in the order to have occurred. No petition 

2 seeking such review may be filed more than 60 days 

3 after issuance of the order by the head of the execu4 tive agency. Such review shall conform to chapter 7 

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

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

7 the Secretary, unless a stay is specifically entered by 

8 the court. 

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

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

11 United States Code, shall be controlling for the pur12 poses of any investigation conducted by the Inspec13 tor General, decision by the Secretary, or judicial or 

14 administrative proceeding to determine whether dis15 crimination prohibited under this section has oc16 curred. 

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

18 The rights and remedies provided for in this section 

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

20 or condition of employment. 

21 ‘‘(d) NOTIFICATION OF PERSONS ASSOCIATED WITH

22 INSTITUTION.—The Secretary shall ensure that each insti23 tution informs the employees, students, and contractors 

24 of the institution in writing of the rights and remedies 

25 provided under this section. 


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

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

3 or discrimination against a person for a disclosure other 

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

5 or derogate from a right or remedy otherwise available 

6 such person.’’. 

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

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

9 is amended by adding at the end the following new para10 graph: 

11 ‘‘(30) The institution will comply with the re12 quirements of section 124.’’. 

13 SEC. 6. ESTABLISHMENT OF COMPLAINT RESOLUTION AND 

14 TRACKING SYSTEM. 

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

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

17 the following new part: 

18 ‘‘PART F—COMPLAINT TRACKING SYSTEM 

19 ‘‘SEC. 161. COMPLAINT TRACKING SYSTEM. 

20 ‘‘(a) ESTABLISHMENT OF COMPLAINT TRACKING

21 SYSTEM.— 

22 ‘‘(1) ESTABLISHMENT OF COMPLAINT TRACK23 ING SYSTEM.—Not later than 1 year after the enact24 ment of the PRO Students Act, the Secretary shall 

25 complete the establishment of a complaint tracking 


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1 system that includes a single, toll-free telephone 

2 number and a website to facilitate the centralized 

3 collection of, monitoring of, and response to com4 plaints or inquiries regarding the educational prac5 tices and services, and recruiting and marketing 

6 practices, of all postsecondary educational institu7 tions. 

8 ‘‘(2) ESTABLISHMENT OF COMPLAINT TRACK9 ING OFFICE.—The Secretary shall establish within 

10 the Department an office whose functions shall in11 clude establishing, administering, and disseminating 

12 widely information about the complaint tracking sys13 tem established under paragraph (1). The Secretary 

14 shall— 

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

16 consolidate the other offices and functions of 

17 the Department to ensure that the office estab18 lished under this paragraph is the single point 

19 of contact for students and borrowers with com20 plaints; and 

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

22 the office established in this paragraph will 

23 work with the Student Loan Ombudsman ap24 pointed in accordance with section 141(f) to as25 sist borrowers that have complaints regarding 


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1 the educational practices and services, and re2 cruiting and marketing practices, of postsec3 ondary educational institutions. 

4 ‘‘(b) HANDLING OF COMPLAINTS.— 

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

6 Secretary shall establish, in consultation with the 

7 heads of appropriate agencies, reasonable procedures 

8 to provide a timely response to complainants, in 

9 writing where appropriate, to complaints against, or 

10 inquiries concerning, an institution of higher edu11 cation that receives funds under this Act. Each re12 sponse shall include a description of— 

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

14 Secretary in response to the complaint or in15 quiry; 

16 ‘‘(B) any responses received by the Sec17 retary from the institution of higher education; 

18 and 

19 ‘‘(C) any additional actions that the Sec20 retary has taken, or plans to take, in response 

21 to the complaint or inquiry. 

22 ‘‘(2) TIMELY RESPONSE TO SECRETARY BY IN23 STITUTION OF HIGHER EDUCATION.—The Secretary 

24 shall notify each institution of higher education that 

25 receives funds under this Act and that is the subject 


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1 of a complaint or inquiry under this section regard2 ing the complaint or inquiry. Not later than 60 days 

3 after receiving such notice, such institution shall 

4 provide a response to the Secretary concerning the 

5 complaint or inquiry, including— 

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

7 institution to respond to the complaint or in8 quiry; 

9 ‘‘(B) all responses received by the institu10 tion from the complainant; and 

11 ‘‘(C) any additional actions that the insti12 tution has taken, or plans to take, in response 

13 to the complaint or inquiry. 

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

15 may, in the event that the complaint is not ade16 quately resolved or addressed by the responses of the 

17 institution of higher education receiving funds under 

18 this Act under paragraph (2), ask additional ques19 tions of such institution or seek additional informa20 tion from or action by the institution. 

21 ‘‘(4) PROVISION OF INFORMATION.— 

22 ‘‘(A) IN GENERAL.—An institution of high23 er education that receives funds under this Act 

24 shall, in a timely manner, comply with a re25 quest by the Secretary for information in the 


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1 control or possession of such institution con2 cerning a complaint or inquiry received by the 

3 Secretary under subsection (a), including sup4 porting written documentation, subject to sub5 paragraph (B). 

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

7 higher education that receives funds under this 

8 Act shall not be required to make available 

9 under this subsection— 

10 ‘‘(i) any nonpublic or confidential in11 formation, including any confidential com12 mercial information; 

13 ‘‘(ii) any information collected by the 

14 institution for the purpose of preventing 

15 fraud or detecting or making any report 

16 regarding other unlawful or potentially un17 lawful conduct; or 

18 ‘‘(iii) any information required to be 

19 kept confidential by any other provision of 

20 law. 

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

22 education that receives funds under this Act shall 

23 comply with the requirements to provide responses 

24 and information, in accordance with this subsection, 

25 as a condition of receiving such funds. 


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1 ‘‘(c) TRANSPARENCY.— 

2 ‘‘(1) SHARING INFORMATION WITH FEDERAL

3 AND STATE AGENCIES.—As appropriate and in ac4 cordance with section 444 of the General Education 

5 Provisions Act (20 U.S.C. 1232g) (commonly re6 ferred to as the ‘‘Family Educational Rights and 

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

8 shall coordinate with the heads of relevant Federal 

9 and State agencies to— 

10 ‘‘(A) collect complaints related to the com11 plaint tracking system described in subsection 

12 (b) from such agencies; and 

13 ‘‘(B) when appropriate, route such com14 plaints to the Department of Education, the 

15 Department of Justice, the Department of De16 fense, the Department of Veterans Affairs, the 

17 Federal Trade Commission, the Consumer Fi18 nancial Protection Bureau, or any equivalent 

19 State agency. 

20 ‘‘(2) INTERACTION WITH EXISTING COMPLAINT

21 SYSTEMS.—To the extent practicable, all procedures 

22 established under this section, and all coordination 

23 carried out under paragraph (1), shall be done in ac24 cordance with the complaint tracking systems estab25 lished under Executive Order 13607 (77 Fed. Reg. 


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1 25861; relating to establishing principles of excel2 lence for educational institutions serving 

3 servicemembers, veterans, spouses, and other family 

4 members). 

5 ‘‘(3) PUBLIC INFORMATION.— 

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

7 regularly publish on the website of the Depart8 ment information on the complaints and inquir9 ies received for each postsecondary educational 

10 institution under this section, including— 

11 ‘‘(i) the number of complaints and in12 quiries received; 

13 ‘‘(ii) the types of complaints and in14 quiries received; and 

15 ‘‘(iii) where applicable, information 

16 about the resolution of the complaints and 

17 inquiries. 

18 ‘‘(B) DATA PRIVACY.—In carrying out sub19 paragraph (A), the Secretary shall— 

20 ‘‘(i) comply with applicable data pri21 vacy laws and regulations; and 

22 ‘‘(ii) ensure that personally identifi23 able information is not shared. 


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

2 prepare and submit to the authorizing committees a 

3 report describing— 

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

5 the Secretary has received under this section; 

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

7 receiving relief pursuant to this section; 

8 ‘‘(C) whether particular types of com9 plaints are more common in a given sector of 

10 postsecondary educational institutions; 

11 ‘‘(D) any legislative recommendations that 

12 the Secretary determines are necessary to bet13 ter assist students and families; and 

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

15 of complaints, as determined by the Secretary. 

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

17 term ‘complainant’ means a person with a complaint 

18 against, or inquiry concerning, an institution of higher 

19 education that receives funds under this Act who is— 

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

21 institution; 

22 ‘‘(2) a family member of a student of a postsec23 ondary educational institution; 

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

25 of a postsecondary educational institution; or 


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1 ‘‘(4) a staff member or employee of a postsec2 ondary educational institution.’’. 

3 SEC. 7. PROPRIETARY EDUCATION OVERSIGHT COORDINA4 TION COMMITTEE. 

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

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

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

8 part: 

9 ‘‘PART G—PROPRIETARY EDUCATION 

10 OVERSIGHT COORDINATION IMPROVEMENT 

11 ‘‘SEC. 166. DEFINITIONS. 

12 ‘‘In this part: 

13 ‘‘(1) EXECUTIVE OFFICER.—The term ‘execu14 tive officer’, with respect to a proprietary institution 

15 of higher education that is a publicly traded corpora16 tion, means— 

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

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

19 who is in charge of a principal business unit, di20 vision, or function of such corporation (includ21 ing sales, administration, or finance); or 

22 ‘‘(C) any other officer or person who per23 forms a policy making function for such cor24 poration. 


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1 ‘‘(2) PROPRIETARY INSTITUTION OF HIGHER

2 EDUCATION.—The term ‘proprietary institution of 

3 higher education’ has the meaning given the term in 

4 section 102(b). 

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

6 ‘State approval agency’ means any State agency that 

7 determines whether an institution of higher edu8 cation is legally authorized within such State to pro9 vide a program of education beyond secondary edu10 cation. 

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

12 term ‘veterans service organization’ means an orga13 nization recognized by the Secretary of Veterans Af14 fairs for the representation of veterans under section 

15 5902 of title 38, United States Code. 

16 ‘‘SEC. 167. ESTABLISHMENT OF COMMITTEE. 

17 ‘‘(a) ESTABLISHMENT.—There is established a com18 mittee to be known as the ‘Proprietary Education Over19 sight Coordination Committee’ (referred to in this part as 

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

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

22 ‘‘(1) The Department of Education. 

23 ‘‘(2) The Bureau of Consumer Financial Pro24 tection. 

25 ‘‘(3) The Department of Justice. 


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

2 ‘‘(5) The Department of Defense. 

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

4 ‘‘(7) The Federal Trade Commission. 

5 ‘‘(8) The Department of Labor. 

6 ‘‘(9) The Internal Revenue Service. 

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

8 other relevant Federal agency or department. 

9 ‘‘(b) DUTIES.—The Committee shall have the fol10 lowing duties: 

11 ‘‘(1) Coordinate Federal oversight of propri12 etary institutions of higher education to— 

13 ‘‘(A) improve enforcement of applicable 

14 Federal laws and regulations; 

15 ‘‘(B) increase accountability of proprietary 

16 institutions of higher education to students and 

17 taxpayers; and 

18 ‘‘(C) ensure the promotion of quality edu19 cation programs. 

20 ‘‘(2) Coordinate Federal activities to protect 

21 students from unfair, deceptive, abusive, unethical, 

22 fraudulent, or predatory practices, policies, or proce23 dures of proprietary institutions of higher education. 

24 ‘‘(3) Encourage information sharing among 

25 agencies related to Federal investigations, audits, or 


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1 inquiries of proprietary institutions of higher edu2 cation. 

3 ‘‘(4) Increase coordination and cooperation be4 tween Federal and State agencies, including State 

5 Attorneys General and State approval agencies, with 

6 respect to improving oversight and accountability of 

7 proprietary institutions of higher education. 

8 ‘‘(5) Develop best practices and consistency 

9 among Federal and State agencies in the dissemina10 tion of consumer information regarding proprietary 

11 institutions of higher education to ensure that stu12 dents, parents, and other stakeholders have easy ac13 cess to such information. 

14 ‘‘(c) MEMBERSHIP.— 

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

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

17 shall appoint a high-level official who exercises sig18 nificant decisionmaking authority for the oversight 

19 or investigatory activities and responsibilities related 

20 to proprietary institutions of higher education of the 

21 respective Federal entity of such head. 

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

23 the designee of the Secretary shall serve as the 

24 Chair of the Committee. 


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

2 entity described in subsection (a) shall ensure appro3 priate staff and officials of such entity are available 

4 to support the Committee-related work of such enti5 ty. 

6 ‘‘SEC. 168. MEETINGS. 

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

8 Committee shall meet regularly, but not less than once 

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

10 duties described in section 167(b). 

11 ‘‘(b) MEETINGS WITH STATE AGENCIES AND STAKE12 HOLDERS.—The Committee shall meet not less than once 

13 each fiscal year, and shall otherwise interact regularly, 

14 with State Attorneys General, State approval agencies, 

15 veterans service organizations, and consumer advocates to 

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

17 ‘‘SEC. 169. REPORT. 

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

19 submit to the authorizing committees, and any other com20 mittee of Congress that the Committee determines appro21 priate, a report on the activities of the Committee. 

22 ‘‘(b) PUBLIC ACCESS.—Each report described in sub23 section (a) shall be made available to the public in a man24 ner that is easily accessible to parents, students, and other 


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1 stakeholders in accordance with the best practices devel2 oped under section 167(b)(5). 

3 ‘‘(c) CONTENTS.— 

4 ‘‘(1) IN GENERAL.—Each report under sub5 section (a) shall include— 

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

7 the Federal Government, any member entity of 

8 the Committee, or a State— 

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

10 and regulations applicable to proprietary 

11 institutions of higher education; 

12 ‘‘(ii) to hold proprietary institutions of 

13 higher education accountable to students 

14 and taxpayers; and 

15 ‘‘(iii) to promote quality education 

16 programs; 

17 ‘‘(B) a summary of complaints against 

18 each proprietary institution of higher education 

19 received by any member entity of the Com20 mittee; 

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

22 and any other data relevant to proprietary insti23 tutions of higher education that the Committee 

24 determines appropriate; and 


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1 ‘‘(D) recommendations of the Committee 

2 for such legislative and administrative actions 

3 as the Committee determines are necessary 

4 to— 

5 ‘‘(i) improve enforcement of applicable 

6 Federal laws; 

7 ‘‘(ii) increase accountability of propri8 etary institutions of higher education to 

9 students and taxpayers; and 

10 ‘‘(iii) ensure the promotion of quality 

11 education programs. 

12 ‘‘(2) DATA.— 

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

14 under subsection (a) shall include data on all 

15 proprietary institutions of higher education that 

16 consists of information regarding— 

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

18 provided to proprietary institutions of 

19 higher education during the previous aca20 demic year; 

21 ‘‘(ii) the percentage of the total 

22 amount of Federal funds provided to insti23 tutions of higher education (as defined in 

24 section 102) for such previous academic 

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1 stitutions of higher education for such pre2 vious academic year; 

3 ‘‘(iii) the total amount of Federal 

4 funds that proprietary institutions of high5 er education disbursed or delivered, on be6 half of a student, or to a student to be 

7 used to attend an institution of higher edu8 cation, for the previous academic year, 

9 disaggregated by— 

10 ‘‘(I) educational assistance in the 

11 form of a loan provided under title IV; 

12 ‘‘(II) educational assistance in 

13 the form of a grant provided under 

14 title IV; 

15 ‘‘(III) educational assistance pro16 vided under chapter 33 of title 38, 

17 United States Code; 

18 ‘‘(IV) tuition assistance provided 

19 under section 2007 of title 10, United 

20 States Code; 

21 ‘‘(V) assistance provided under 

22 section 1784a of title 10, United 

23 States Code; and 

24 ‘‘(VI) Federal funds not de25 scribed in subclauses (I) through (V); 


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1 ‘‘(iv) the percentage of the total 

2 amount of Federal funds provided to insti3 tutions of higher education (as defined in 

4 section 102) for such previous academic 

5 year for each of the programs described in 

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

7 that were provided to proprietary institu8 tions of higher education for such previous 

9 academic year for each of such programs; 

10 ‘‘(v) the average retention and grad11 uation rates for students pursuing a degree 

12 at proprietary institutions of higher edu13 cation; 

14 ‘‘(vi) the average cohort default rate 

15 (as defined in section 435(m)) for propri16 etary institutions of higher education, and 

17 an annual list of cohort default rates (as 

18 defined in such section) for all proprietary 

19 institutions of higher education; 

20 ‘‘(vii) for careers requiring the pas21 sage of a licensing examination— 

22 ‘‘(I) the passage rate of individ23 uals who attended a proprietary insti24 tution of higher education taking such 


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1 examination to pursue such a career; 

2 and 

3 ‘‘(II) the passage rate of all indi4 viduals taking such exam to pursue 

5 such a career; and 

6 ‘‘(viii) the use of private education 

7 loans at proprietary institutions of higher 

8 education that includes— 

9 ‘‘(I) an estimate of the total 

10 number of such loans; and 

11 ‘‘(II) information on the average 

12 debt, default rate, and interest rate of 

13 such loans. 

14 ‘‘(B) DATA ON PUBLICLY TRADED COR15 PORATIONS.— 

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

17 subsection 9(a) shall include data on pro18 prietary institutions of higher education 

19 that are publicly traded corporations, con20 sisting of information on— 

21 ‘‘(I) any pre-tax profit of such 

22 proprietary institutions of higher edu23 cation— 

24 ‘‘(aa) reported as a total 

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1 age of revenue for all such pro2 prietary institutions of higher 

3 education; and 

4 ‘‘(bb) reported for each such 

5 proprietary institution of higher 

6 education; 

7 ‘‘(II) revenue for such propri8 etary institutions of higher education 

9 spent on recruiting and marketing ac10 tivities, student instruction, and stu11 dent support services, reported— 

12 ‘‘(aa) as a total amount and 

13 an average percentage of revenue 

14 for all such proprietary institu15 tions of higher education; and 

16 ‘‘(bb) for each such propri17 etary institution of higher edu18 cation; 

19 ‘‘(III) total compensation pack20 ages of the executive officers of each 

21 such proprietary institution of higher 

22 education; and 

23 ‘‘(IV) a list of institutional loan 

24 programs offered by each such propri25 etary institution of higher education 


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1 that includes information on the de2 fault and interest rates of such pro3 grams. 

4 ‘‘(ii) DISAGGREGATED BY OWNER5 SHIP.—Each report under subsection (a) 

6 shall include data on proprietary institu7 tions of higher education that are publicly 

8 traded corporations, disaggregated by cor9 porate or parent entity, brand name, and 

10 campus, consisting of— 

11 ‘‘(I) the total cost of attendance 

12 for each program at each such propri13 etary institution of higher education, 

14 and information comparing such total 

15 cost for each such program to— 

16 ‘‘(aa) the average cost of at17 tendance for each program at 

18 public institutions of higher edu19 cation; and 

20 ‘‘(bb) the average total cost 

21 of attendance for each program 

22 at all non-profit institutions of 

23 higher education; 

24 ‘‘(II) total enrollment, disaggre25 gated by— 


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1 ‘‘(aa) individuals enrolled in 

2 programs taken online; and 

3 ‘‘(bb) individuals enrolled in 

4 programs that are not taken on5 line; 

6 ‘‘(III) the average retention and 

7 graduation rates for students pur8 suing a degree at such proprietary in9 stitutions of higher education; 

10 ‘‘(IV) the percentage of students 

11 enrolled in such proprietary institu12 tions of higher education who com13 plete a program of such an institution 

14 within— 

15 ‘‘(aa) the standard period of 

16 completion for such program; and 

17 ‘‘(bb) a period that is 150 

18 percent of such standard period 

19 of completion; 

20 ‘‘(V) the total cost of attendance 

21 for each program at such proprietary 

22 institutions of higher education; 

23 ‘‘(VI) the average cohort default 

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

25 such proprietary institutions of higher 


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1 education, and an annual list of co2 hort default rates (as defined in such 

3 section) for all proprietary institutions 

4 of higher education; 

5 ‘‘(VII) the median educational 

6 debt incurred by students who com7 plete a program at such a proprietary 

8 institution of higher education; 

9 ‘‘(VIII) the median educational 

10 debt incurred by students who start 

11 but do not complete a program at 

12 such a proprietary institution of high13 er education; 

14 ‘‘(IX) the job placement rate for 

15 students who complete a program at 

16 such a proprietary institution of high17 er education and the type of employ18 ment obtained by such students; 

19 ‘‘(X) for careers requiring the 

20 passage of a licensing examination, 

21 the rate of individuals who attended 

22 such a proprietary institution of high23 er education and passed such an ex24 amination; and 


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1 ‘‘(XI) the number of complaints 

2 from students enrolled in such propri3 etary institutions of higher education 

4 who have submitted a complaint to 

5 any member entity of the Committee. 

6 ‘‘(iii) DEPARTMENT OF DEFENSE AND

7 VETERANS AFFAIRS ASSISTANCE.— 

8 ‘‘(I) IN GENERAL.—To the extent 

9 practicable, each report under sub10 section (a) shall provide information 

11 on the data described in clause (ii) for 

12 individuals using, to pay for the costs 

13 of attending such a proprietary insti14 tution of higher education, Federal 

15 funds provided under title 10, United 

16 States Code, or title 38, United States 

17 Code. 

18 ‘‘(II) REVENUE.—Each report 

19 under subsection (a) shall provide in20 formation on the revenue of propri21 etary institutions of higher education 

22 that are publicly traded corporations 

23 that is derived from the Federal funds 

24 described in subclause (I). 


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

2 practicable, each report under subsection (a) 

3 shall provide information comparing the data 

4 described in subparagraph (B) for proprietary 

5 institutions of higher education that are pub6 licly traded corporations with such data for 

7 public institutions of higher education disaggre8 gated by State. 

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

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

11 shall include— 

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

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

14 court; 

15 ‘‘(B) an administrative proceeding by a 

16 Federal or State agency involving noncompli17 ance of any applicable law or regulation; or 

18 ‘‘(C) any other review, audit, or adminis19 trative process by any Federal or State agency 

20 that results in a penalty, suspension, or termi21 nation from any Federal or State program. 

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

23 ‘‘(a) IN GENERAL.—Each academic year, the Com24 mittee shall publish a list to be known as the ‘Warning 


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1 List for Parents and Students’ to be comprised of propri2 etary institutions of higher education— 

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

4 the previous academic year as determined by a Fed5 eral or State court; 

6 ‘‘(2) that have entered into a settlement result7 ing in a monetary payment for an unfair, deceptive, 

8 abusive, unethical, fraudulent, or predatory practice, 

9 policy, or procedure; 

10 ‘‘(3) that have had any higher education pro11 gram withdrawn or suspended; or 

12 ‘‘(4) for which the Committee has sufficient evi13 dence of widespread or systemic unfair, deceptive, 

14 abusive, unethical, fraudulent, or predatory prac15 tices, policies, or procedures that pose a threat to 

16 the academic success, financial security, or general 

17 best interest of students. 

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

19 pursuant to subsection (a)(4), the Committee may con20 sider evidence that includes the following: 

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

22 member entity of the Committee. 

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

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


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1 ‘‘(3) Any administrative proceeding by a Fed2 eral or State agency involving noncompliance of any 

3 applicable law or regulation. 

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

5 process by any Federal or State agency that results 

6 in a penalty, suspension, or termination from any 

7 Federal or State program. 

8 ‘‘(5) Data or information submitted by a pro9 prietary institution of higher education to any ac10 crediting agency or association recognized by the 

11 Secretary of Education pursuant to section 496 or 

12 the findings or adverse actions of any such accred13 iting agency or association. 

14 ‘‘(6) Information submitted by a proprietary in15 stitution of higher education to any member entity 

16 of the Committee. 

17 ‘‘(7) Any other evidence that the Committee de18 termines relevant in making a determination pursu19 ant to subsection (a)(4). 

20 ‘‘(c) PUBLICATION.— 

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

22 each fiscal year, the Committee shall publish the list 

23 described in subsection (a) prominently and in a 

24 manner that is easily accessible to parents, students, 


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1 and other stakeholders in accordance with any best 

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

3 ‘‘(2) NOTICE OF SELF REPORTING.—In pub4 lishing the list in accordance with paragraph (1), the 

5 Committee shall note each institution that is in6 cluded on the list due to an act described in sub7 section (a) that was reported by such institution.’’. 

8 SEC. 8. IMPROVED DETERMINATION OF COHORT DEFAULT 

9 RATES; PUBLICATION OF DEFAULT PREVEN10 TION PLAN. 

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

12 U.S.C. 1085) is amended— 

13 (1) in subsection (a)— 

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

15 the following new subparagraph: 

16 ‘‘(D) In any case where the Secretary has de17 termined that the institution has engaged in default 

18 manipulation, the Secretary— 

19 ‘‘(i) shall recalculate the cohort default 

20 rate for the institution under this section using 

21 corrected data and information, for all fiscal 

22 years for which the default manipulation has 

23 occurred; and 

24 ‘‘(ii) using the recalculated cohort default 

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


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1 whether the institution is ineligible to partici2 pate in a program under this title.’’; and 

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

4 end the following new clause: 

5 ‘‘(iii) SUMMARY OF DEFAULT PRE6 VENTION PLAN.—Upon receiving technical 

7 assistance from the Secretary under clause 

8 (ii), each institution subject to this sub9 paragraph shall— 

10 ‘‘(I) prepare a summary of the 

11 plan described under clause (i) that is 

12 directed to a student audience; 

13 ‘‘(II) make the summary publicly 

14 available; and 

15 ‘‘(III) provide the summary to 

16 students at the institution.’’; and 

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

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

19 at the end and inserting ‘‘through default manipula20 tion’’. 


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1 SEC. 9. ELIMINATION OF ORIGINATION FEES AND OTHER 

2 AMENDMENTS TO TERMS AND CONDITIONS 

3 OF LOANS. 

4 (a) AMENDMENTS.—Section 455(h) of the Higher 

5 Education Act of 1965 (20 U.S.C. 1087e(h)) is amended 

6 to read as follows: 

7 ‘‘(h) BORROWER CLAIMS AND DEFENSES.— 

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

9 provision of State or Federal law, a borrower, re10 gardless of the account status of the borrower’s loan, 

11 may assert as an affirmative claim or defense 

12 against repayment, any act or omission of an insti13 tution of higher education attended by the borrower 

14 that would give rise to a cause of action against the 

15 institution under this Act, other Federal law, or ap16 plicable State law, except that in no event may a 

17 borrower recover from the Secretary, in any action 

18 arising from or relating to a loan made under this 

19 part, an amount in excess of the amount such bor20 rower has repaid on such loan. 

21 ‘‘(2) EXERCISE BY SECRETARY.—The Secretary 

22 may elect to carry out the authority under this sub23 section on behalf of a group of multiple borrowers 

24 if the Secretary determines that the group has been 

25 harmed by the same act, omission, or practice.’’. 


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1 SEC. 10. IMPROVED STUDENT LOAN SERVICING AND DEBT 

2 COLLECTION PRACTICES. 

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

4 U.S.C. 1087f) is amended by adding at the end the fol5 lowing new subsection: 

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

7 contract entered into under this section for the servicing 

8 of loans made or purchased under this part shall include 

9 a provision that any rights and remedies available to bor10 rowers against the servicer may not be waived by any 

11 agreement, policy, or form, including by a predispute arbi12 tration agreement.’’. 

13 SEC. 11. IMPROVED DISCLOSURES, COUNSELING, AND FI14 NANCIAL ASSISTANCE INFORMATION FOR 

15 STUDENTS. 

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

17 (20 U.S.C. 1092(l)) is amended— 

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

19 following new paragraph: 

20 ‘‘(1) DISCLOSURE REQUIRED PRIOR TO SIGNING

21 MASTER PROMISSORY NOTE.—Each eligible institu22 tion shall, prior to obtaining or arranging execution 

23 of a master promissory note for a loan under part 

24 D (other than a Federal Direct Consolidation Loan) 

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

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1 tion on the terms and conditions of the loan and of 

2 the responsibilities the borrower has with respect to 

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

4 information— 

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

6 interactive programs that include mechanisms 

7 to check the borrower’s comprehension of the 

8 terms and conditions of the borrower’s loans 

9 under part D, using simple and understandable 

10 language and clear formatting; and 

11 ‘‘(B) shall be provided— 

12 ‘‘(i) during an entrance counseling 

13 session conducted in person; or 

14 ‘‘(ii) online.’’; and 

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

16 following new subparagraph: 

17 ‘‘(L) Information relating to the institu18 tion’s cohort default rate, including— 

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

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

21 ‘‘(ii) an easy to understand expla22 nation of the cohort default rate; 

23 ‘‘(iii) the percentage of students at 

24 the institution of higher education who 


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1 borrow Federal student loans under this 

2 title; 

3 ‘‘(iv) the national average cohort de4 fault rate (as determined by the Secretary 

5 in accordance with section 435(m)); 

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

7 a cohort default rate that is greater than 

8 the national average cohort default rate (as 

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

10 student that the institution’s cohort de11 fault rate is above the national average; 

12 and 

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

14 a cohort default rate that is greater than 

15 30 percent, a disclosure to the students 

16 that if the cohort default rate remains 

17 greater than 30 percent for the 3 consecu18 tive years— 

19 ‘‘(I) the institution will lose insti20 tutional eligibility for the purposes of 

21 programs authorized under this title; 

22 and 

23 ‘‘(II) the student will no longer 

24 be able to receive Federal financial aid 

25 at that institution.’’. 


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1 SEC. 12. PROGRAM PARTICIPATION AGREEMENTS. 

2 (a) SENSE OF CONGRESS REGARDING INCENTIVE

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

4 (1) incentive compensation is an inappropriate 

5 mechanism in the delivery of higher education for in6 stitutions of higher education wishing to participate 

7 in programs under title IV of the Higher Education 

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

9 (2) the ban on incentive compensation under 

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

11 1965 (20 U.S.C. 1094(a)(20)), as amended by sub12 section (b), is intended to preclude its use by institu13 tions wishing to participate in such programs, at any 

14 point in the recruitment, enrollment, education, or 

15 employment placement of students. 

16 (b) AMENDMENTS.—Section 487 of the Higher Edu17 cation Act of 1965 (20 U.S.C. 1094) is amended— 

18 (1) in subsection (a)— 

19 (A) in paragraph (19), by inserting ‘‘hous20 ing facilities,’’ after ‘‘libraries,’’; 

21 (B) by striking paragraph (20) and insert22 ing the following: 

23 ‘‘(20)(A) The institution or any third party act24 ing on the institution’s behalf, including an institu25 tion affiliate or service provider to the institution, 

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1 centive payment to any person or entity at any 

2 phase of the academic process based directly or indi3 rectly on success in— 

4 ‘‘(i) securing enrollments or securing or award5 ing financial aid; 

6 ‘‘(ii) performance in educational coursework; 

7 ‘‘(iii) graduation; 

8 ‘‘(iv) job placement; or 

9 ‘‘(v) any other academic facet of a student’s en10 rollment in an institution of higher education. 

11 ‘‘(B) The requirements of subparagraph (A) shall not 

12 apply to the recruitment of foreign students residing in 

13 foreign countries who are not eligible to receive Federal 

14 student assistance.’’; and 

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

16 paragraphs: 

17 ‘‘(30)(A) The institution— 

18 ‘‘(i) shall not include a predispute arbitra19 tion agreement in any contract with a student 

20 or prospective student for enrollment at the in21 stitution; and 

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

23 contract for enrollment at the institution en24 tered into by a student before the date of enact25 ment of the Protections and Regulation for Our 


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1 Students Act included a predispute arbitration 

2 agreement, such agreement shall be invalid and 

3 unenforceable by the institution. 

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

5 arbitration agreement’ means any agreement to arbi6 trate a dispute that had not yet arisen at the time 

7 of the making of the agreement. 

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

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

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

11 year— 

12 ‘‘(i) provide an individual accepted for en13 rollment at the institution with a waiting pe14 riod, beginning on the date that the individual 

15 receives notification of the acceptance and last16 ing for not less than 2 weeks, before the indi17 vidual is required to enroll in the institution, 

18 pay tuition charges, or sign a master promis19 sory note for a loan under this title, in order to 

20 give the individual time to consider, and com21 pare among postsecondary options, program 

22 costs at the institution and employment pros23 pects upon completion of a program of study; 

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

25 aid, incentives, or other benefits is not made 


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1 contingent on an individual confirming enroll2 ment before the end of the individual’s waiting 

3 period; 

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

5 in a manner determined by the Secretary at the 

6 time of the acceptance notification, of— 

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

8 week waiting period under clause (i) begin9 ning on the date that the individual re10 ceives notification of the acceptance; and 

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

12 required to provide such waiting period; 

13 ‘‘(iv) notify an individual accepted for en14 rollment at the institution of all financial aid 

15 determinations by not less than 1 week before 

16 the enrollment confirmation deadline, if all re17 quested application forms are received from the 

18 individual on time; and 

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

20 enrollment, in a manner determined by the Sec21 retary, that the individual may file a complaint 

22 through the complaint tracking system estab23 lished under section 161 if the individual be24 lieves that the institution has violated any pro25 vision of this paragraph. 


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1 ‘‘(B) If an institution described in subpara2 graph (A) fails to meet the requirements of this 

3 paragraph, the institution shall be subject to a civil 

4 penalty in accordance with section 489A. 

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

6 Secretary may, after providing notice and an oppor7 tunity to comment, elect to replace the use of the 

8 student default risk percentage threshold established 

9 under subparagraph (A) with a loan repayment rate 

10 threshold calculated in accordance with section 

11 483D(b).’’; and 

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

13 ‘‘available’’ and inserting ‘‘made publicly available 

14 and provided’’. 

15 SEC. 13. IMPROVED DISCLOSURES, COUNSELING, AND FI16 NANCIAL ASSISTANCE INFORMATION FOR 

17 STUDENTS. 

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

19 U.S.C. 1092) is amended by adding at the end the fol20 lowing new subsection: 

21 ‘‘(n) REPORTS RELATING TO CLINICAL TRAINING

22 PROGRAMS.— 

23 ‘‘(1) REPORT ON CLINICAL TRAINING PROGRAM

24 AGREEMENTS.— 


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

2 in which the Protections and Regulation for 

3 Our Students Act is enacted, an eligible institu4 tion that participates in any program under this 

5 title shall prepare and submit a report to the 

6 Secretary containing the information described 

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

8 the eligible institution has an agreement with a 

9 hospital or health facility, through which— 

10 ‘‘(i) the eligible institution agrees to 

11 provide funding or other benefits to the 

12 hospital or health facility; and 

13 ‘‘(ii) that hospital or health facility 

14 provides opportunities for students at the 

15 institution to participate in a clinical train16 ing program. 

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

18 which the Protections and Regulation for Our 

19 Students Act is enacted, the report described in 

20 this paragraph shall be submitted not more 

21 than 30 days after the end of any year for 

22 which a report is required to comply with sub23 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 any payments 

5 from the institution of higher education to 

6 a hospital or health facility during the pe7 riod covered by the report, and the precise 

8 terms of any agreement under which such 

9 amounts are determined. 

10 ‘‘(ii) Any conditions associated with 

11 the transfer of money or the provision of 

12 clinical training program opportunities 

13 that are part of the agreement described in 

14 subparagraph (A). 

15 ‘‘(iii) Any memorandum of under16 standing between the institution of higher 

17 education, or an alumni association or 

18 foundation affiliated with or related to 

19 such institution, and a hospital or health 

20 facility, that directly or indirectly relates to 

21 any aspect of any agreement referred to in 

22 subparagraph (A) or controls or directs 

23 any obligations or distribution of benefits 

24 between or among any such entities. 


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1 ‘‘(iv) For each hospital or health facil2 ity that has an agreement described in 

3 subparagraph (A) with the institution, the 

4 number of clinical training positions at the 

5 hospital or health facility that are reserved 

6 for students at that institution. 

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

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

9 in which the Protections and Regulation for 

10 Our Students Act is enacted, and annually 

11 thereafter, an eligible institution shall prepare 

12 and submit to the Secretary a report containing 

13 the information described in subparagraph (C) 

14 if— 

15 ‘‘(i) the eligible institution made a 

16 charitable donation to a hospital or health 

17 facility in any of the previous 3 years; and 

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

19 eligible institution who participate in any 

20 clinical training program at the hospital or 

21 health facility where such a donation was 

22 made increases by more than 5 students or 

23 10 percent, whichever is less, as compared 

24 to the number of such students who par25 ticipated in a clinical training program at 


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1 that hospital or health facility during the 

2 first year in the previous 3-year period. 

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

4 which the Protections and Regulation for Our 

5 Students Act is enacted, the report described in 

6 subparagraph (A) shall be submitted not more 

7 than 30 days after the end of any year for 

8 which a report is required to comply with sub9 paragraph (A). 

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

11 described in this paragraph shall include the 

12 following: 

13 ‘‘(i) The amount of each charitable 

14 donation that was made in the previous 3- 

15 year period by the eligible institution to a 

16 hospital or health facility. 

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

18 eligible institution who participate in any 

19 clinical training program at the hospital or 

20 health facility where each such donation 

21 was made— 

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

23 report is submitted; and 


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

2 previous 3-year period covered by the 

3 report. 

4 ‘‘(3) AGGREGATION BY INSTITUTION.—The in5 formation required to be reported in this subsection 

6 shall include, and shall be aggregated with respect 

7 to, each institution of higher education and each 

8 alumni association or foundation affiliated with or 

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

10 institution is required to submit a report described 

11 under paragraph (1) and a report described under 

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

13 report for that year containing all of the information 

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

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

16 conjunction with the Secretary of Health and 

17 Human Services, shall submit to Congress, and 

18 make available to the public, an annual report that 

19 lists the reports submitted to the Secretary by each 

20 institution of higher education in accordance with 

21 this subsection. 

22 ‘‘(5) PUBLIC DISCLOSURE.—Each eligible insti23 tution described in paragraph (1) or (2) of this sub24 section shall make readily available the reports de25 scribed in such paragraph (as applicable), through 


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1 appropriate publications, mailings, and electronic 

2 media to the general public. 

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

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

5 term ‘clinical training program’ means any pro6 gram at, or associated or affiliated with, a hos7 pital or health facility (or any of a hospital’s af8 filiates or health facility’s affiliates), the com9 pletion of which fulfills a requirement that is 

10 necessary to receive a license, certificate, spe11 cialized accreditation, or other academically re12 lated pre-condition necessary under Federal or 

13 State law for a health profession. 

14 ‘‘(B) HEALTH FACILITY.—The term 

15 ‘health facility’ has the meaning given that 

16 term in section 804(d). 

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

18 the meaning given that term in section 1861 of 

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

20 SEC. 14. CIVIL PENALTIES. 

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

22 1965 (20 U.S.C. 1088 et seq.) is amended by inserting 

23 after section 489 the following new section: 


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

2 ‘‘(a) SANCTIONS FOR SUBSTANTIAL MISREPRESEN3 TATIONS OR SERIOUS VIOLATIONS.— 

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

5 impose a civil penalty upon an eligible institution 

6 upon making a determination, after reasonable no7 tice and opportunity for a hearing, that an eligible 

8 institution has engaged in a substantial misrepresen9 tation or other serious violation. 

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

11 penalty imposed for a violation under subparagraph 

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

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

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

15 multiplied by the institution’s student default 

16 risk, whichever is larger; 

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

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

19 multiplied by the institution’s student default 

20 risk, whichever is larger; and 

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

22 violation, an amount equal to the product of 

23 $3,000,000 multiplied by the institution’s stu24 dent default risk, whichever is larger. 

25 ‘‘(3) TREATMENT OF MULTIPLE INSTITU26 TIONS.—For the purpose of determining the number 


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

2 a particular institution will accrue against all identi3 fication codes used by the Office of Postsecondary 

4 Education to designate campuses and institutions 

5 affiliated with the institution, and within the period 

6 of participation for the institution, as defined in sec7 tion 668.13(b) of title 34, Code of Federal Regula8 tions, or any successor regulation. 

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

10 TITLE.—Upon determination, after reasonable notice and 

11 opportunity for a hearing, that an eligible institution has 

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

13 including the failure to carry out any provision of this 

14 title, that is not a significant misrepresentation or other 

15 serious violation, the Secretary may impose a civil penalty 

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

17 to such adjustments for inflation as the Secretary may 

18 prescribe by regulation) for each such violation. 

19 ‘‘(c) CIVIL PENALTIES AND SANCTIONS FOR OFFI20 CERS OF INSTITUTIONS.—Upon determination, after rea21 sonable notice and an opportunity for a hearing on the 

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

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1 vision of this title, the Secretary may sanction the officer. 

2 Such sanctions may include the following: 

3 ‘‘(1) Prohibiting the institution of higher edu4 cation that has employed the officer of an institution 

5 of higher education and that participates in a pro6 gram under this title, or any other institution of 

7 higher education that participates in a program 

8 under this title, from employing the officer, except 

9 that any such prohibition under this subsection shall 

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

11 date of the determination of the violation. 

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

13 of an institution of higher education who has know14 ingly and willfully, or with gross negligence, violated 

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

16 penalty under this subsection shall not be greater 

17 than the amount of the officer’s compensation for 

18 each year for which the violations are determined to 

19 have occurred. For purposes of this subparagraph, 

20 an officer’s compensation shall include proceeds of 

21 any sales of stock and any incentive-based com22 pensation (including stock options awarded as com23 pensation) based on information required to be re24 ported to the Secretary or any other Federal agency 


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1 during the period in which the violations are deter2 mined to have occurred. 

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

4 ELIGIBILITY STATUS.— 

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

6 reasonable notice and opportunity for a hearing, that 

7 an eligible institution has engaged in a violation of 

8 any provision of this title (including the failure to 

9 carry out any provision of this title or any regulation 

10 prescribed under such provision) or a violation of 

11 any applicable special arrangement, agreement, or 

12 limitation, the Secretary may limit, suspend, or ter13 minate the participation in any program under this 

14 title of an eligible institution, subject to the require15 ments of paragraph (2). 

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

17 suspension under this section shall exceed 60 days 

18 unless the institution and the Secretary agree to an 

19 extension or unless limitation or termination pro20 ceedings are initiated by the Secretary within that 

21 period of time. 

22 ‘‘(e) EMERGENCY ACTION.— 

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

24 emergency action against an institution, under which 

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


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1 notice and statement of the basis of the action is 

2 mailed to the institution (by registered mail, return 

3 receipt requested), withhold funds from the institu4 tion or its students and withdraw the institution’s 

5 authority to obligate funds under any program 

6 under this title, if the Secretary— 

7 ‘‘(A) receives information, determined by 

8 the Secretary to be reliable, that the institution 

9 is violating any provision of this title, any regu10 lation prescribed under this title, or any appli11 cable special arrangement, agreement, or limita12 tion; 

13 ‘‘(B) determines that immediate action is 

14 necessary to prevent misuse of Federal funds; 

15 and 

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

17 outweighs the importance of the procedures pre18 scribed in subsection (e) for limitation, suspen19 sion, or termination. 

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

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

22 unless limitation, suspension, or termination pro23 ceedings are initiated by the Secretary against the 

24 institution within that period of time. 


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1 ‘‘(3) OPPORTUNITY TO SHOW CAUSE.—The Sec2 retary shall provide an institution that is the subject 

3 of an emergency action under this subsection an op4 portunity to show cause, if the institution so re5 quests, that the emergency action is unwarranted 

6 and should be lifted. 

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

8 other provision of this title, an institution of higher edu9 cation that has been sanctioned by the Secretary under 

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

11 have such sanctions lifted until the Secretary has con12 ducted a subsequent program review under section 498A 

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

14 title. 

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

16 AUTHORITY AND COLLECTION OF PENALTY.— 

17 ‘‘(1) SAME COURSE OF CONDUCT.—For pur18 poses of this section, acts and omissions relating to 

19 a single course of conduct shall be treated as a sin20 gle violation. 

21 ‘‘(2) COMPROMISE AUTHORITY.—Any civil pen22 alty under this section may be compromised (but not 

23 eliminated) by the Secretary. In determining the 

24 amount of such penalty, or the amount agreed upon 

25 in compromise, the Secretary shall consider— 


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

2 the size of the institution of higher education 

3 subject to the determination; and 

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

5 misrepresentation. 

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

7 penalty under this section may be deducted from any sums 

8 owing by the United States to the institution charged. 

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

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

11 this section shall be transferred to the Secretary, 

12 who shall determine the distribution of collected 

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

14 ‘‘(2) USE FOR PROGRAM INTEGRITY EFFORTS

15 AND PROGRAM REVIEWS.— 

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

17 an amount equal to not more than 50 percent 

18 of the amounts recovered or collected under this 

19 section— 

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

21 to carry out program reviews under section 

22 498A and other efforts by the Secretary 

23 related to program integrity under part H; 

24 and 


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

2 that purpose by the Secretary to any ap3 propriations and funds that are available 

4 to the Secretary for obligation at the time 

5 of collection. 

6 ‘‘(B) SUPPLEMENT NOT SUPPLANT.— 

7 Amounts made available under subparagraph 

8 (A) shall be used to supplement and not sup9 plant any other amounts available to the Sec10 retary for the purpose described in such sub11 paragraph. 

12 ‘‘(C) AVAILABILITY FOR FUNDS.—Any 

13 amounts collected under this section that are 

14 made available under paragraph (2) shall re15 main available until expended. 

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

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

18 50 percent of the amounts recovered or collected 

19 under this section shall be deposited into the Stu20 dent Relief Fund established under subsection (k). 

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

22 publish, on the website of the Department, a de23 tailed description that includes— 

24 ‘‘(A) the amount of funds that were dis25 tributed for the purposes described in paraVerDate Sep 11 2014 23:50 May 12, 2015 Jkt 049200 PO 00000 Frm 00069 Fmt 6652 Sfmt 6201 E:\BILLS\H2192.IH H2192

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1 graph (2) and the amount used for the Student 

2 Relief Fund under paragraph (3); and 

3 ‘‘(B) how funds were distributed among 

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

5 ‘‘(j) STUDENT RELIEF FUND.— 

6 ‘‘(1) ESTABLISHMENT.—The Secretary shall es7 tablish a Student Relief Fund (referred to in this 

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

9 to the availability of funds, to provide financial relief 

10 to any student enrolled in an institution of higher 

11 education that— 

12 ‘‘(A) has failed to comply with an eligi13 bility requirement under section 101 or 102 or 

14 an obligation incurred under the terms of the 

15 program participation agreement under section 

16 487; or 

17 ‘‘(B) has been sanctioned under subsection 

18 (b) or (c). 

19 ‘‘(2) DETERMINATION OF RELIEF.—The Sec20 retary, in consultation with Director of the Bureau 

21 of Consumer Financial Protection— 

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

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

24 include tuition reimbursement, full or partial 

25 loan forgiveness, or loan reinstatement; and 


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1 ‘‘(B) may issue regulations regarding how 

2 the amounts in the Fund will be distributed 

3 among students eligible for the funds. 

4 ‘‘(3) TREATMENT AND AVAILABILITY OF

5 FUNDS.— 

6 ‘‘(A) FUNDS THAT ARE NOT GOVERNMENT

7 FUNDS.—Funds obtained by or transferred to 

8 the Fund shall not be construed to be Govern9 ment funds or appropriated monies. 

10 ‘‘(B) AMOUNTS NOT SUBJECT TO APPOR11 TIONMENT.—Notwithstanding any other provi12 sion of law, amounts in the Fund shall not be 

13 subject to apportionment for purposes of chap14 ter 15 of title 31, United States Code, or under 

15 any other authority. 

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

17 deposited in the Fund shall remain in the Fund 

18 and be available for expenditure under this 

19 chapter without fiscal year limitation. 

20 ‘‘(4) INVESTMENTS.— 

21 ‘‘(A) AMOUNTS IN FUND MAY BE IN22 VESTED.—The Secretary of Education may re23 quest the Secretary of the Treasury to invest 

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1 cretion of the Secretary of Education, required 

2 to meet the current needs of the Fund. 

3 ‘‘(B) ELIGIBLE INVESTMENTS.—Invest4 ments shall be made by the Secretary of the 

5 Treasury in obligations of the United States or 

6 obligations that are guaranteed as to principal 

7 and interest by the United States, with matu8 rities suitable to the needs of the Fund as de9 termined by the Secretary on the record. 

10 ‘‘(C) INTEREST AND PROCEEDS CRED11 ITED.—The interest on, and the proceeds from 

12 the sale or redemption of, any obligations held 

13 in the Fund shall be credited to the Fund. 

14 ‘‘(5) REGULATIONS.—The Secretary shall pre15 scribe regulations to implement the requirements of 

16 this section within 1 year after the date of enact17 ment of the PRO Students Act. 

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

19 addition to funds derived from financial penalties as20 sessed pursuant to subsection (j), there are author21 ized to be appropriated such sums as may be nec22 essary to carry out this subsection. 

23 ‘‘(k) STATE ENFORCEMENT.— 

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

25 (b), including the regulations promulgated under 


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1 such subsection, shall be a cause of action enforce2 able by the State, through the attorney general (or 

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

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

5 State court that is located in that State and that 

6 has jurisdiction over the defendant. The State may 

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

8 such violation, or any remedies otherwise provided 

9 under law. 

10 ‘‘(2) NOTICE REQUIRED.— 

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

12 action in a court or other administrative or reg13 ulatory proceeding against any institution of 

14 higher education as authorized by paragraph 

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

16 including any regulation promulgated by the 

17 Secretary under this subsection, a State attor18 ney general shall timely provide a copy of the 

19 complete complaint to be filed and written no20 tice describing such action or proceeding to the 

21 Secretary, except as provided in subparagraph 

22 (B). 

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

24 of the initiation of an action or administrative 

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1 paragraph (A) is not practicable, the State at2 torney general shall provide a copy of the com3 plete complaint and the notice to the Secretary 

4 immediately upon instituting the action or pro5 ceeding. 

6 ‘‘(C) CONTENTS OF NOTICE.—The notifi7 cation required under this subparagraph shall 

8 include— 

9 ‘‘(i) the identity of the parties; 

10 ‘‘(ii) the alleged facts underlying the 

11 proceeding; and 

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

13 coordinate the prosecution of the pro14 ceeding so as not to interfere with any ac15 tion, including any rulemaking, undertaken 

16 by the Secretary or another Federal agen17 cy. 

18 ‘‘(3) REGULATIONS.—The Secretary shall pre19 scribe regulations to implement the requirements of 

20 this subsection and periodically provide guidance to 

21 further coordinate actions with the State attorneys 

22 general. 

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

24 ‘‘(A) STATE CLAIMS.—Nothing in this sub25 section shall be construed as altering, limiting, 


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1 or affecting the authority of a State attorney 

2 general or any other regulatory or enforcement 

3 agency or authority to bring an action or other 

4 regulatory proceeding arising solely under the 

5 law in effect in that State. 

6 ‘‘(B) RELIEF.— 

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

8 subsection may include, without limita9 tion— 

10 ‘‘(I) rescission or reformation of 

11 contracts; 

12 ‘‘(II) refund of moneys or return 

13 of real property; 

14 ‘‘(III) restitution; 

15 ‘‘(IV) disgorgement or compensa16 tion for unjust enrichment; 

17 ‘‘(V) payment of damages or 

18 other monetary relief pursuant to the 

19 requirements of paragraph (2); 

20 ‘‘(VI) public notification regard21 ing the violation, including the costs 

22 of notification; and 

23 ‘‘(VII) limits on the activities or 

24 functions of the person. 


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

2 subsection shall not include the ability to 

3 suspend or terminate the eligibility status 

4 of an institution of higher education for 

5 programs under this title. 

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

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

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

9 higher education’ includes the president, chief execu10 tive officer, and chief financial officer of an institu11 tion of higher education or their equivalents. 

12 ‘‘(2) SUBSTANTIAL MISREPRESENTATION OR

13 OTHER SERIOUS VIOLATION.—The term ‘substantial 

14 misrepresentation or other serious violation’ means 

15 any of the following: 

16 ‘‘(A) A substantial misrepresentation re17 garding— 

18 ‘‘(i) the nature of the educational pro19 gram of an institution of higher education; 

20 ‘‘(ii) the financial charges of the insti21 tution; 

22 ‘‘(iii) the space availability in a pro23 gram of the institution for which a student 

24 is considering enrollment; 


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1 ‘‘(iv) the admission requirements of 

2 the institution; 

3 ‘‘(v) the transferability of credits from 

4 the institution; 

5 ‘‘(vi) whether a program of the insti6 tution meets the necessary standards to 

7 qualify students to sit for licensing exami8 nations, or obtain certification required as 

9 a precondition for employment, in the 

10 State in which the students reside; 

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

12 the institution in obtaining certification re13 quirements; 

14 ‘‘(viii) the passage rates of students 

15 who sit for licensing examinations; or 

16 ‘‘(ix) the employability of the grad17 uates of the institution. 

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

19 the requirements of section 487(a)(32) to com20 ply with such section. 

21 ‘‘(C) A knowing and willful misuse of Fed22 eral student aid from any source. 

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


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1 ‘‘(E) A violation of the default manipula2 tion regulations promulgated by the Secretary 

3 under section 435(m)(3). 

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

5 review process described in section 498A, in6 cluding any disclosure requirement described in 

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

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

9 regulations promulgated by the Secretary under 

10 this Act. 

11 ‘‘(H) A violation of this Act that the Sec12 retary has determined, by regulation, to be a 

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

14 SEC. 15. REQUIREMENTS FOR ACCREDITING AGENCIES OR 

15 ASSOCIATIONS. 

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

17 (20 U.S.C. 1099b(a)) is amended— 

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

19 the semicolon; 

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

21 inserting ‘‘; and’’ ; and 

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

23 paragraph: 

24 ‘‘(9) such agency or association does not re25 quire any institution to enter into predispute arbiVerDate Sep 11 2014 23:50 May 12, 2015 Jkt 049200 PO 00000 Frm 00078 Fmt 6652 Sfmt 6201 E:\BILLS\H2192.IH H2192

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1 tration agreements with the students of the institu2 tion.’’. 

3 SEC. 16. PROGRAM REVIEW AND DATA. 

4 Section 498A of the Higher Education Act of 1965 

5 (20 U.S.C. 1099c–1) is amended to read as follows: 

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

7 ‘‘(a) PROGRAM REVIEWS FOR INSTITUTIONS PAR8 TICIPATING UNDER TITLE IV.— 

9 ‘‘(1) IN GENERAL.—The Secretary— 

10 ‘‘(A) may conduct program reviews, includ11 ing on-site visits, of each institution of higher 

12 education participating in a program authorized 

13 under this title; and 

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

15 this subsection of each institution of higher 

16 education that poses a significant risk of failure 

17 to comply with this title, as described in para18 graphs (2) and (3). 

19 ‘‘(2) MANDATORY REVIEWS.— 

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

21 on an annual basis, conduct program reviews of 

22 each institution of higher education partici23 pating in a program authorized under this title 

24 that meets one or more of the following criteria: 

25 ‘‘(i) The Secretary determines that— 


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1 ‘‘(I) more than 15 percent of the 

2 students enrolled at the institution 

3 have received a Federal Direct Unsub4 sidized Stafford Loan during the pre5 vious year; and 

6 ‘‘(II) the institution has a cohort 

7 default rate, as defined in section 

8 435(m), that is more than 20 percent. 

9 ‘‘(ii) The Secretary determines that— 

10 ‘‘(I) the institution has a cohort 

11 default rate, as defined in section 

12 435(m), that exceeds the national av13 erage, as determined by the Secretary 

14 in accordance with such section; and 

15 ‘‘(II) the institution has an ag16 gregate amount of defaulted loans, as 

17 determined by the Secretary, that 

18 places the institution in the highest 1 

19 percent of institutions participating in 

20 programs authorized under this title 

21 in terms of the aggregate amount of 

22 defaulted loans. 

23 ‘‘(iii) In the case of proprietary insti24 tutions of higher education, the institution 

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1 tution’s revenues from Federal funds as 

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

3 most recent years for which data is avail4 able. 

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

6 1 percent of institutions participating in 

7 programs authorized under this title in 

8 terms of numbers or rates of complaints 

9 related to Federal student financial aid, 

10 educational practices and services, or re11 cruiting and marketing practices, as re12 ported in the complaint tracking system 

13 established under section 161. 

14 ‘‘(v) As of the date of the determina15 tion, the institution is among the top 1 

16 percent of institutions in terms of low 

17 graduation rates, as determined by the 

18 Secretary, of all institutions participating 

19 in programs authorized under this title. 

20 ‘‘(vi) The institution spends more 

21 than 20 percent of the institution’s reve22 nues on recruiting and marketing activities 

23 and executive compensation. 


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1 ‘‘(vii) In the fiscal year immediately 

2 following the most recent cohort default 

3 rate period— 

4 ‘‘(I) the institution’s loan de5 faults increased by 50 percent or 

6 more as compared to the preceding 

7 period; and 

8 ‘‘(II) more than 50 percent of 

9 the students attending the institution 

10 received loans under this title. 

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

12 of the institution, has publicly acknowl13 edged or disclosed that the institution— 

14 ‘‘(I) is in violation or noncompli15 ance with any provision of law admin16 istered by a relevant Federal agency 

17 or relevant State entity or agency; or 

18 ‘‘(II) is being investigated re19 garding a potential violation of such 

20 provision of law. 

21 ‘‘(ix) The institution— 

22 ‘‘(I) is a proprietary institution 

23 of higher education that has acquired 

24 a nonprofit institution of higher edu25 cation at any point during the 1-year 


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1 period preceding the date of the deter2 mination; or 

3 ‘‘(II) was a proprietary institu4 tion of higher education and has be5 come a nonprofit institution of higher 

6 education at any time during the 1- 

7 year period preceding the date of the 

8 determination. 

9 ‘‘(B) PUBLICATION OF INSTITUTIONS RE10 VIEWED.—The Secretary shall— 

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

12 website, the name of each institution of 

13 higher education that is reviewed under 

14 subparagraph (A); 

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

16 respect to each such institution, which of 

17 the mandatory review criteria, as described 

18 in subparagraph (A), such institution met; 

19 and 

20 ‘‘(iii) indicate on the College Navi21 gator website of the Department, or any 

22 successor website, the name of each insti23 tution of higher education that is reviewed 

24 under subparagraph (A). 


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1 ‘‘(C) INSTITUTIONAL DISCLOSURE OF RE2 VIEW.—Each institution of higher education 

3 that is reviewed under subparagraph (A) 

4 shall— 

5 ‘‘(i) post on the home page of the in6 stitution’s website that the institution will 

7 be subject to a mandatory program review 

8 and why the institution is being reviewed 

9 and shall maintain such posting and expla10 nation for 1 year or until the Secretary has 

11 issued its final program review report 

12 under subsection (c)(5)(C), whichever oc13 curs sooner; 

14 ‘‘(ii) provide a clear, conspicuous dis15 closure of the information described in 

16 clause (i) to students who inquire about 

17 admission to the institution or submit an 

18 application for admission to the institution 

19 prior to the student signing an enrollment 

20 agreement with the institution, for 1 year 

21 or until the Secretary has issued the final 

22 program review report under subsection 

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

24 ‘‘(iii) include the information de25 scribed in clause (i) on materials of acceptVerDate Sep 11 2014 23:50 May 12, 2015 Jkt 049200 PO 00000 Frm 00084 Fmt 6652 Sfmt 6201 E:\BILLS\H2192.IH H2192

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1 ance or admission submitted to each stu2 dent before the student enrolls in the insti3 tution, for 1 year or until the Secretary 

4 has issued the final program review report 

5 under subsection (c)(6)(C), whichever oc6 curs sooner. 

7 ‘‘(3) RISK-BASED REVIEWS.— 

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

9 use a risk-based approach to select, on an an10 nual basis not less than 2 percent of institu11 tions of higher education participating in a pro12 gram authorized under this title that are not 

13 reviewed under paragraph (2), for a program 

14 review. Such approach shall prioritize program 

15 reviews of institutions that— 

16 ‘‘(i) have received large increases in 

17 funding under this title during the 5-year 

18 period preceding the date of the determina19 tion; 

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

21 revenue from Federal funds, as defined in 

22 section 166(2); 

23 ‘‘(iii) have a significant fluctuation in 

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1 bination thereof, in the year for which the 

2 selection is made, compared to the year 

3 prior to such year, that is not accounted 

4 for by changes in the Federal Direct Staf5 ford Loan program, the Federal Pell Grant 

6 program, or any combination thereof; 

7 ‘‘(iv) have experienced sharp increases 

8 in enrollment in absolute numbers or rate 

9 of growth; 

10 ‘‘(v) have high rates of defaults, rel11 ative to all other institutions of higher edu12 cation participating in a program author13 ized under this title, for loans issued under 

14 this title over the lifetime of the loans; 

15 ‘‘(vi) have a large aggregate dollar 

16 amount of loans under this title in default, 

17 or a high cohort default rate as described 

18 in section 435(m); 

19 ‘‘(vii) have a high student default 

20 risk, as compared to the student default 

21 risk for all institutions participating in a 

22 program under this title; 

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

24 rate of complaints related to Federal stu25 dent financial aid, educational practices 


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1 and services, or recruiting and marketing 

2 practices, as reported in the complaint 

3 tracking system established under section 

4 161; 

5 ‘‘(ix) have extremely low graduation 

6 rates, as determined by the Secretary; 

7 ‘‘(x) are in poor financial health ac8 cording to financial responsibility stand9 ards described in section 498(c); 

10 ‘‘(xi) are spending a large percentage 

11 of the institution’s revenues on recruiting 

12 and marketing activities and executive 

13 compensation; 

14 ‘‘(xii) in the case of proprietary insti15 tutions of higher education, have large 

16 profit margins and profit growth; 

17 ‘‘(xiii) have been put on notice, warn18 ing, or probation by, or is subject to a 

19 show cause order from, a nationally recog20 nized accrediting agency or association 

21 that is recognized by the Secretary pursu22 ant to part H of title IV; 

23 ‘‘(xiv) has been found to have compli24 ance problems under this title, or is at sig25 nificant risk of failing to comply with apVerDate Sep 11 2014 23:50 May 12, 2015 Jkt 049200 PO 00000 Frm 00087 Fmt 6652 Sfmt 6201 E:\BILLS\H2192.IH H2192

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1 plicable Federal or State laws, by a rel2 evant Federal agency or a relevant State 

3 entity or agency, including the Comptroller 

4 General of the United States; 

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

6 returned under section 484B; or 

7 ‘‘(xvi) in the case of proprietary insti8 tutions of higher education, have experi9 enced a change in ownership or control of 

10 the institution, including a buyout. 

11 ‘‘(B) CRITERIA FOR RISK-BASED RE12 VIEWS.—The Secretary shall publish, and up13 date as necessary, the specific criteria that the 

14 Secretary will use to determine which institu15 tions of higher education are selected for risk16 based reviews under subparagraph (A). 

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

18 The Secretary shall— 

19 ‘‘(A) post on the College Navigator 

20 website, or any successor website, of the De21 partment, the name of each institution of high22 er education that is found to have violated a 

23 provision of this title knowingly and willfully or 

24 with gross negligence; 


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

2 to each such institution, which of the provisions 

3 of this title the institution violated; and 

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

5 the institution of higher education rectifies the 

6 violation or the date that is 1 year after the 

7 date the Secretary issues the final program re8 view report under subsection (c)(6)(C) with re9 spect to such institution, whichever date is 

10 later. 

11 ‘‘(5) INSTITUTIONAL DISCLOSURE OF VIOLA12 TIONS.—Each institution of higher education that is 

13 found to have violated a provision of this title know14 ingly and willfully or with gross negligence shall— 

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

16 of issuance of the final program review report 

17 containing the finding, post on the home page 

18 of the institution’s website that the institution 

19 has been found to have violated a provision of 

20 this title knowingly and willfully or with gross 

21 negligence, including the provision the institu22 tion was found to have violated; 

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

24 the institution rectifies the violation or the date 

25 that is 1 year after the date the Secretary 


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1 issues the final program review report under 

2 subsection (c)(6)(C) with respect to such insti3 tution, whichever date is later; and 

4 ‘‘(C) include the information described in 

5 subparagraph (A) on materials of acceptance or 

6 admission submitted to each student before the 

7 student enrolls in the institution until the date 

8 the institution rectifies the violation or the date 

9 that is 1 year after the date the Secretary 

10 issues the final program review report under 

11 subsection (c)(6)(C) with respect to such insti12 tution, whichever date is later. 

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

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

15 more than 72 hours notice to an institution of high16 er education that will undergo a program review 

17 pursuant to subsection (b) of such review. 

18 ‘‘(2) SHARING OF INFORMATION.—The Sec19 retary shall share all final program review deter20 minations conducted under this section with relevant 

21 Federal agencies and relevant State entities or agen22 cies, and appropriate accrediting agencies and asso23 ciations, to enable such agencies, entities, and asso24 ciations to determine the eligibility of institutions for 

25 funds or accreditation. 


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1 ‘‘(3) INTERACTION WITH OTHER FEDERAL

2 AGENCIES AND LAWS.—To the extent practicable, 

3 the Secretary shall coordinate program reviews con4 ducted under this section with other reviews and au5 dits conducted by the Department, and with relevant 

6 Federal agencies and relevant State entities or agen7 cies. 

8 ‘‘(4) VIOLATIONS DISCOVERED THROUGH PRO9 GRAM REVIEW.— 

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

11 the course of conducting a program review, the 

12 Secretary obtains evidence that any institution 

13 of higher education or person has engaged in 

14 conduct that may constitute a violation of this 

15 title, including a failure to fully comply with the 

16 program review process and reporting require17 ments under this section, the Secretary may 

18 sanction such institution or person, pursuant to 

19 section 489A. 

20 ‘‘(B) VIOLATIONS OF OTHER FEDERAL

21 LAWS.—If, in the course of conducting a pro22 gram review, the Secretary obtains evidence 

23 that any institution of higher education or per24 son has engaged in conduct that may constitute 

25 a violation of Federal law, the Secretary shall 


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1 transmit such evidence to the Attorney General 

2 of the United States, the Director of the Bu3 reau of Consumer Financial Protection, the 

4 Commissioner of the Federal Trade Commis5 sion, or the head of any other appropriate Fed6 eral agency who may institute proceedings 

7 under appropriate law. 

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

9 in this paragraph shall be constructed to affect 

10 any other authority of the Secretary to disclose 

11 information. 

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

13 program reviews under this section, the Secretary 

14 shall assess the institution of higher education’s 

15 compliance with the provisions of this title. Each 

16 program review shall include, at a minimum, the fol17 lowing: 

18 ‘‘(A) With regard to the institutional infor19 mation, the Secretary shall assess financial ca20 pability, administrative capability, and program 

21 integrity, including whether the institution— 

22 ‘‘(i) knowingly and willfully misused 

23 Federal student aid from any source; 

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


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1 ‘‘(iii) engaged in any substantial mis2 representation or other serious violation, as 

3 defined in section 489A; or 

4 ‘‘(iv) violated the program integrity 

5 regulations promulgated by the Secretary 

6 under this Act. 

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

8 the Secretary shall examine— 

9 ‘‘(i) graduation rates compared with 

10 all other institutions participating in a pro11 gram authorized under this title; 

12 ‘‘(ii) student complaints, including 

13 interviews with current and former stu14 dents, faculty and staff, and accrediting 

15 agencies; and 

16 ‘‘(iii) information from the complaint 

17 data system established under section 161. 

18 ‘‘(6) ADMINISTRATIVE PROCESS.— 

19 ‘‘(A) TRAINING.—The Secretary shall pro20 vide training, including investigative training, to 

21 personnel of the Department designed to im22 prove the quality of financial and compliance 

23 audits and program reviews conducted under 

24 this section, including instruction about appro25 priately and effectively conducting such audits 


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1 and reviews for institutions of higher education 

2 from different sectors of higher education. 

3 ‘‘(B) CARRYING OUT PROGRAM RE4 VIEWS.—In carrying out program reviews under 

5 this section, the Secretary shall— 

6 ‘‘(i) establish guidelines designed to 

7 ensure uniformity of practice in the con8 duct of such reviews; 

9 ‘‘(ii) make available to each institu10 tion of higher education participating in a 

11 program authorized under this title com12 plete copies of all review guidelines and 

13 procedures used in program reviews, except 

14 that internal training materials for Depart15 ment staff related to identifying instances 

16 of fraud, misrepresentation, or intentional 

17 noncompliance shall not be disclosed; 

18 ‘‘(iii) permit an institution of higher 

19 education to correct or cure an administra20 tive, accounting, or recordkeeping error 

21 within 90 days of the issuance of the final 

22 program review report, if the error is not 

23 part of a pattern of error and there is no 

24 evidence of fraud or misconduct related to 

25 the error; 


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1 ‘‘(iv) without sharing personally iden2 tifiable information and in accordance with 

3 section 444 of the General Education Pro4 visions Act (20 U.S.C. 1232g, commonly 

5 known as the ‘Family Educational Rights 

6 and Privacy Act of 1974’), inform the rel7 evant Federal agencies and relevant State 

8 entities or agencies, and accrediting agency 

9 or association, whenever the Secretary 

10 finds a violation of this title or sanctions 

11 an institution of higher education under 

12 section 432, 489A, or 498; and 

13 ‘‘(v) provide to an institution of high14 er education 90 calendar days to review 

15 and respond to any program review report 

16 and relevant materials related to the report 

17 before any final program review report is 

18 issued. 

19 ‘‘(C) FINAL PROGRAM REVIEW DETER20 MINATION.— 

21 ‘‘(i) IN GENERAL.—Not later than 

22 180 calendar days after issuing a program 

23 review report under this section, the Sec24 retary shall review and consider an institu25 tion of higher education’s response, and 


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1 issue a final program review determination 

2 or audit determination. The final deter3 mination shall include— 

4 ‘‘(I) a written statement address5 ing the institution of higher edu6 cation’s response; 

7 ‘‘(II) a written statement of the 

8 basis for such determination; and 

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

10 response. 

11 ‘‘(ii) CONFIDENTIALITY.—The Sec12 retary shall maintain and preserve at all 

13 times the confidentiality of any program 

14 review report until a final program review 

15 determination is issued, other than to in16 form the relevant Federal agencies and rel17 evant State entities or agencies, and ac18 crediting agency or association, as required 

19 under this section. 

20 ‘‘(D) REPORTS DISCLOSED TO THE INSTI21 TUTION.—The Secretary shall promptly disclose 

22 each program review report and each final pro23 gram review determination to the institution of 

24 higher education under review. 


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1 ‘‘(E) REMOVAL OF PERSONALLY IDENTIFI2 ABLE INFORMATION.—Any personally identifi3 able information from the education records of 

4 students shall be removed from any program re5 view report or final program review determina6 tion before the report is shared with any rel7 evant Federal agency, State entity or agency, or 

8 accrediting agency or association. 

9 ‘‘(7) FOLLOW-UP REVIEWS AFTER VIOLA10 TIONS.—The Secretary shall conduct follow-up re11 views of each institution of higher education that 

12 has been found in violation of a provision of this 

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

14 finding. Such follow-up reviews may only assess 

15 whether the institution of higher education has cor16 rected violations found in a previous program review 

17 or final program review determination. 

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

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

20 ‘executive compensation’, when used with respect to 

21 an institution of higher education, means the wages, 

22 salary, fees, commissions, fringe benefits, deferred 

23 compensation, retirement contributions, options, bo24 nuses, property, and any other form of remuneration 

25 that the Secretary determines is appropriate, given 


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1 to the 5 percent of employees at the institution who 

2 are the highest compensated. 

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

4 ‘relevant Federal agency’ means— 

5 ‘‘(A) the Department of Education; 

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

7 ‘‘(C) the Department of Defense; 

8 ‘‘(D) the Bureau of Consumer Financial 

9 Protection; 

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

11 ‘‘(F) any other Federal agency that pro12 vides Federal student assistance or that the 

13 Secretary determines appropriate. 

14 ‘‘(3) RELEVANT STATE ENTITY OR AGENCY.— 

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

16 ‘‘(A) an appropriate State licensing or au17 thorizing agency; 

18 ‘‘(B) the attorney general (or the equiva19 lent thereof) of the State; or 

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

21 the Secretary determines appropriate.’’. 

22 SEC. 17. CONSUMER PROTECTIONS FOR STUDENTS. 

23 (a) DEFINITIONS.—In this section: 

24 (1) FEDERAL FINANCIAL ASSISTANCE PRO25 GRAM.—The term ‘‘Federal financial assistance proVerDate Sep 11 2014 23:50 May 12, 2015 Jkt 049200 PO 00000 Frm 00098 Fmt 6652 Sfmt 6201 E:\BILLS\H2192.IH H2192

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1 gram’’ means a program that provides Federal edu2 cation assistance funds, as described in section 103 

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

4 1003), to any postsecondary educational institution. 

5 (2) POSTSECONDARY EDUCATIONAL INSTITU6 TION.—The term ‘‘postsecondary educational institu7 tion’’ means an educational institution that awards 

8 a degree or certificate and is located in any State 

9 and includes— 

10 (A) an institution of higher education, as 

11 defined in section 102 of the Higher Education 

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

13 (B) a postsecondary educational institu14 tion, as defined in section 203 of the Adult 

15 Education and Family Literacy Act (20 U.S.C. 

16 9202); and 

17 (C) an educational institution, as defined 

18 under section 3452 of title 38, United States 

19 Code. 

20 (3) STATE.— 

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

22 in addition to the several States of the United 

23 States, the Commonwealth of Puerto Rico, the 

24 District of Columbia, Guam, American Samoa, 

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1 wealth of the Northern Mariana Islands, and 

2 the freely associated States. 

3 (B) FREELY ASSOCIATED STATES.—The 

4 term ‘‘freely associated States’’ means the Re5 public of the Marshall Islands, the Federated 

6 States of Micronesia, and the Republic of 

7 Palau. 

8 (b) CONSUMER PROTECTIONS.—Notwithstanding 

9 any other provision of law, a postsecondary educational 

10 institution is not eligible to participate in a Federal finan11 cial assistance program with respect to any program of 

12 postsecondary education or training, including a degree or 

13 certificate program, that is designed to prepare students 

14 for entry into a recognized occupation or profession that 

15 requires licensing or other established requirements as a 

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

17 unless— 

18 (1) the successful completion of the program 

19 fully qualifies a student, in the Metropolitan Statis20 tical Area in which the student resides, to— 

21 (A) take any examination required for 

22 entry into the recognized occupation or profes23 sion in the Metropolitan Statistical Area in 

24 which the student resides, including satisfying 

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•HR 2192 IH

1 grammatic and specialized accreditation re2 quirements, if any; and 

3 (B) be certified or licensed or meet any 

4 other academically related pre-conditions that 

5 are required for entry into the recognized occu6 pation or profession in the Metropolitan Statis7 tical Area in which the student resides; and 

8 (2) the institution offering the program pro9 vides timely placement for all of the academically re10 lated pre-licensure requirements for entry into the 

11 recognized occupation or profession in the Metropoli12 tan Statistical Area in which the student resides, 

13 such as clinical placements, internships, or appren14 ticeships. 

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

16 on the date that is 180 days after the date of the enact17 ment of this Act. 

Æ 


smartinez on DSK4TPTVN1PROD with BILLS